Expert Advice with Tyron Hyde
Could landlords potentially be at risk if they allow inspections of their property during the current pandemic?
I believe so. Which is why Our Plan to Help Property Investors utilises decades of data Washington Brown has collected from properties around Australia to continue preparing depreciation schedules.
It is aimed to protect our inspectors, your tenants and carries no risk to YOU – the investor.
Guidance from State governments in regards to inspections specifically refers to real estate agents being able to make private appointments.
However, Quantity Surveyors and other inspection industries do not fall under the same umbrella.
Landlords have a duty of care to their tenants and the potential for litigation further down the line is an unknown risk.
Landlords have a duty of care to Tenants
John Denes of & Legal agrees
“Where there is a physical inspection of premises by a quantity surveyor which results in a person (the tenant or the inspector) contracting the COVID-19 virus, there may be a breach of duty of care because of the failure to take reasonable steps to avoid infection.
Due to the global pandemic status of COVID-19, the potential for infection is arguably a foreseeable risk and legal action may be taken against the landlord/owner of the premises and/or the quantity surveyor’s firm as a consequence of the breach.
It is at this stage uncertain how the Courts will deal with the liability issue and it may take years before the extent of the relevant duty of care as a result of COVID-19 can be fully defined.”
At this stage, all states have strict protocols for private viewing so real estate transactions can, hopefully, continue.
Property sales tend to take place over a limited time period and a personalised viewing is necessary in most cases.
As of the 31st of March there has been strong guidance from the Federal Government to stay home, unless you are shopping for essentials, medical reasons, exercise or you can’t work remotely.
Firms like ours and many others, have started working remotely. We have existing data on a huge range of buildings and have access to a variety of means to carry out a report.
Furthermore, the Australian Institute of Quantity Surveyors has stated that reports can be amended post coronavirus.
Inspections could put both the tenant and landlord at risk.
There are two main reasons we have decided NOT to carry out inspections of occupied properties at the moment.
Reason number 1 – after decades of collecting data from properties around the country, Washington Brown has sufficient information to continue to prepare most depreciation schedules.
Reason number 2 – other than the obvious health risks to both the tenant and our inspectors, we don’t want to put landlords at risk.
According to NSW Health some people with Covid 19 have been infectious before any symptoms have developed.
It is also not certain how long the virus survives on surfaces.
So here is the main concern. Let’s say, you as the landlord, organise for a depreciation inspector to enter your investment property for the purpose of carrying out a depreciation report.
Then, heaven forbid, that inspector unwillingly passes the virus onto your tenant and he/she becomes ill – or worse.
The tenant could then sue you the landlord, and include within that claim the property manager and the Quantity Surveying firm.
The landlord has the contractual arrangement with the tenant (Lease agreement) and from my experience that’s where the legal case would start.
We plan to be part of the solution, not the problem.
If you have clients who may benefit from this information, we encourage you to share this article with them.
Tyron Hyde is the CEO of Washington Brown and is considered one of Australia’s leading experts in property tax depreciation. He is also a registered tax agent. Washington Brown manages construction costs worth over $2 billion and completes 10,000 schedules annually. For a depreciation schedule quote CLICK HERE and follow the 3 simple steps or estimate your depreciation cost.
The Washington Brown Free Depreciation Calculator will give you an estimate of the depreciation deductions you could claim on your investment property
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.