FAQs: The Entry Condition Report

The Property Management Support Service (PMSS) team fields up to 100 calls a week from REIQ members seeking clarity on certain topics - with the Entry Condition Report (RTA Form 1a) a regular topic. Have a topic you'd like us to cover in an upcoming edition of the PM Update? Email us at pmsupport@reiq.com.au!

Q: Does the property manager need to sign the Entry Condition Report when they provide it to the tenant?

A: Yes. Section 65 of the Residential Tenancies & Rooming Accommodation Act (RTRA Act) requires the Lessor/agent/property manager to complete and sign the Entry Condition Report and provide a copy to the tenant no later than the date of occupancy. See below:

65 Condition report at start of tenancy

(1) This section applies to a Lessor or Lessor's agent if the terms of the agreement are required to be in writing. (2) The Lessor or agent must on or before the day the tenant occupies the premises under the agreement - 

(a) prepare, in the approved form, a condition report for the premises and any inclusions; (b) sign the report; and, (c) give a copy of the report to the tenant.

Maximum penalty - 20 penalty units.

Q: If we sign the report, doesn't this mean we automatically agree with the report completed and returned by the tenant even if we don't?

A: No. You're signing the report based on how you as the agent/property manager have described the property together with meeting the requirements of Section 65 of the RTRA Act. The tenant then has three days to complete their side of the entry condition report and return it to the Lessor/agent if they're not in agreement.

Best practice is to have a checklist for tenants to sign when they collect the keys for the premises, acknowledging the keys collected together with confirming the receipt of the Form 1A Entry Condition Report and acknowledging any supporting photos taken by the agent to support the condition of the premises and Lessor/agent comments.

Highlight to the tenant that they're required to return the Entry Condition within three days if they're not in agreement with the report. Diarise the expected return date and, if the tenant hasn't returned the report, send an email confirming you're not in receipt of the returned Entry Condition Report.

Accordingly you will therefore be relying on the report provided to the tenant on (insert the date) as to the condition of the premises at the start of the tenancy.

(3) The tenant must, within 3 days after the tenant occupies the premises under the agreement - 

(a) sign the copy; (b) if the tenant does not agree with the report - show the parts of the report the tenant disagrees with by marking the copy in an appropriate way; and, (c) return the copy to the Lessor or agent.

Maximum penalty - 20 penalty units.

Q: What happens if the tenant returns the Condition Report and the Lessor/agent/property manager don't agree with the tenant/s comments?

A: This has to be handled on a case by case basis, although best practice would be to contact the tenant(s) and arrange a mutually convenient time for the property manager to meet with the tenant at the property and go through the report together.

Ideally, the property manager will use their negotiation skills to work through the differences and take the appropriate steps so an agreement can be reached as to the condition of the property at the start of the tenancy. This may mean the Entry Condition Report is again altered and initialled by the property manager/tenant/s together.

Additionally, a follow up email should be sent to the tenant confirming the joint inspection and providing a copy of the amended Entry Condition Report with copies of any evidence to support any remedial action taken by the agent/property manager - for example, a cleaning tax invoice if a cleaning contractor was engaged.

If the tenant isn't willing to be co-operative in helping to resolve the differences between the Lessor/agent and tenant side of the report, keep comprehensive notes on attempts made to resolve the matter and follow this up in an email to the tenant.

The reality is, if an agreement isn't reached at the beginning of the tenancy it means at the end of the tenancy there will be a dispute which may eventually end up in QCAT. As you're the paid professional it would be prudent, if the matter progressed to QCAT, to be able to demonstrate, with supporting evidence, the attempts you made to try and reach an agreement at the start of the tenancy rather than have a dispute at the end of the tenancy.

Q: If the tenant returns the Entry Condition Report, do I need to provide a copy to the tenant and the owner?

A: You must provide a copy to the tenant within 14 days.

(5) If the tenant returns the copy of the report to the Lessor or agent under Subsection (3), the Lessor or agent must make a copy of the report and return it to the tenant within 14 days.

Maximum penalty - 20 penalty units.

The Property Occupations Act or Regulations do not contain a specific provision stating you must provide the Lessor with the Entry Condition Report. However, they own the property and as the agent, you're acting on their behalf.

Best practice would be to provide them with all documentation associated with their property, which of course includes the Entry Condition Report. Additionally, this is a risk management practice demonstrating the owner has been kept fully informed as to the condition of their property. It's also a good quality control agency practice to ensure there are no unresolved issues from an Exit Condition Report to the Entry Condition Report for the next tenant.

Q: How long do you need to keep the Entry Condition Report after the tenancy has ended?

A: The RTRA Act requires the report to be kept for at least one year after the agreement has ended. In the event of a Professional Indemnity Claim or Civil Claim being made against the agent/property manager by either the Lessor or tenant, all documentation associated with the management of a premises should be retained for a period of up to seven years.

(6) The Lessor or agent must keep, at least until 1 year after the agreement ends:

(a) the signed copy of the report returned to the Lessor or agent by the tenant; or

(b) if the tenant does not return a signed copy - another copy of the report.

Maximum penalty - 20 penalty units.

REIQ members seeking further advice on this topic or any other property management topic can call the PMSS Team on 1300MYREIQ (1300 697 347) or email pmsupport@reiq.com.au.