Garden Maintenance

Published: 17 January 2008.

By Frank Higginson of Hynes Lawyers

It is common for managers in permanent let management rights complexes to have arrangements in place for the mowing and maintenance of tenants’ lawns and gardens.
The ‘traditional’ arrangement has been for the tenant to pay the manager a weekly fee for the lawn mowing and garden maintenance services. This fee is usually contained in the residential tenancy agreement with the tenant. So when paying rent, the tenant will pay, for example $250.00 for the rent and $10.00 for lawn mowing and garden maintenance.

Under the Residential Tenancies Act 1994 (Qld), it is unlawful to require the tenants as a condition of them being accepted as tenants to agree to buy or use any goods or services. This would include lawn mowing services. These sort of contracts are described as ‘collateral contracts’.

The relevant section is section 142 (1), and that section states:

“The Lessor or Lessor’s agent must not require the tenant to buy goods or services from the Lessor, the Lessor’s agent or a person nominated by the Lessor or agent.”
This means that if the landlord, or the resident manager as the landlord’s agent, would not have rented the unit if the tenants did not agree to the special condition in the tenancy agreement then the manager will not be able to enforce the special condition.

However, if the landlord, or the resident manager as the landlord’s agent, would have rented the unit regardless of whether the special condition was in the tenancy agreement, then the special condition will stand. This of course is difficult to prove and any dispute in relation to the lawn mowing charges would ultimately come down to the resident manager’s word against the tenant’s, in relation to what representations (either express or implied) were made to the tenants before they signed the tenancy agreement.

The penalty for a breach is a fine of up to $1500.00. In addition there is a concern that the manager would also be in breach of the Code of Conduct under both the Property Agents and Motor Dealers Act and the Body Corporate and Community Management Act.

In some cases, resident managers have entered into a separate written agreement with each tenant in relation to the lawn mowing. This does not overcome the problems mentioned above - as it is still requiring the tenant to purchase services from the manager.

A casual agreement may probably not be in breach of the section, however this would raise queries from a purchaser about the reliability of the income. A casual agreement, by its very nature would be able to be terminated at any time.

Whichever way you look at it, it is not a situation you would like to be in if it could be avoided.

There is a simple way to overcome any concerns about the Residential Tenancies Act and to ensure that the income is verifiable when it comes to a sale. That is, to include the cost of the lawn mowing in the rent payable by the tenant. So, using the above example, the rent would simply be $260.00. Then the letting appointment (between the resident manager and each owner) should provide for a lawn mowing charge to be paid to the resident manager. The total amount paid by the tenant and the net result to the owner remains the same, so no one loses out financially.

The tenancy agreement should also contain a condition requiring the landlord to keep the lawns mowed and gardens properly maintained and allowing the manager access to the lawns and gardens for that purpose. It is important that the tenancy agreement make some mention to the resident manager entering the property to maintain the lawns. This is because section 109 of the Residential Tenancies Act severely limits the circumstances which a landlord or the manager can enter the premises.

These arrangements have been an issue for some time now. It is always up to you as to how you want to handle it if you have offending tenancy agreements, and what most of our clients tend to do is deal with the issue when the tenancies are renewed. This would usually means that most of the offending agreements are resolved within six months.

For more information regarding this article, contact Frank Higginson of Hynes Lawyers on 07 55926698.

Reply from: philip

12:42am Thursday, 17 January 2008

I was interested in your article concerning lawn and garden maintenance. I charge the owners for this as it becomes a tax deductible item,,,, are there any loopholes in doing this...that is my first question...

Secondly the subject of exclusive use areas??? who is responsible for the maintenance of this and who pays for lawn moving, garden maint etc.

I am sure other onsite managers would be interested in the answers to the above...

enjoy your info and tips

Kind regards

Philip

Reply from: Frank Higginson

8:55am Thursday, 17 January 2008

Hi Philip.

Dealing with each question in turn:-

1. I am not an accountant but I would have thought that lawn mowing expenses for owners is no different to small repairs and the like, which would be fully tax deductible. It becomes similar to your postage charges - they are certainly deductible. So no real 'loophole' issues to speak of to my mind.

2. The by-laws deal with who must maintain exclusive use areas. If there is no stated obligation it rests with the holder of the exclusive use area (i.e. the owner of the lot). It can get a bit legally messy when the body corporate has to maintain them via you. So the normal course of action is that the owner must maintain and if you are their letting agent you would do for them under your letting appointment. Of course, owner occuipiers then maintain their own space.