Transcript Document

NRAS APPROVED PROPERTY MANAGER TRAINING
WHAT IS NRAS AND HOW DOES IT
WORK?
NRAS APPROVED PROPERTY MANAGER TRAINING
WHAT IS NRAS?
• Stands for National Rental Affordability Scheme
• A Federal Government initiative to increase the number
of affordable rental properties
• Gives the investor a grant ($10,660.00 pa for 10 years) if
they meet NRAS criteria:
• Brand new property
• Rent at 80% of market rent
• Rent to eligible tenants
• Limited rental increases.
• Only properties approved by the Government are eligible
to be in the Scheme.
HOW DOES AHC FIT IN?
• Affordable Housing Consulting (AHC) is an approved NRAS
participant
• We have NRAS allocations throughout SA, most them have
already been sold but less than half are “Active”
• Our NRAS allocations are matched to properties and sold to
investors through selling agents
• We are required to train our property managers
HOW DOES IT WORK?
Affordable Housing Consulting Operating Framework
Tenant
Leases from Investor, pays 80%
or market rent
Property Manager
Acts as the tenant, investor
and AHC interface
Ensures eligibility of the
tenant and that the rent rates
comply with the Scheme
Property owner
Leases property to eligible
tenants under NRAS guidelines
for 10 years
Developer
Identifies allotments to be
included in the NRAS proposal
Commonwealth Government
Pays 75% of the annual
incentive through refundable
tax offset
State Government
Pays 25% of the annual
incentive via AHC Trust
account
Affordable Housing
Consulting
Managed the NRAS
obligations and deals with
the government. Distributes
the tax offsets and state
contributions to investors
HOW DO PROPERTY MANAGERS FIT IN?
• The property manager together with AHC ensures the
dwelling meets all eligibility criteria
• Essential role – maximising client’s payment
• The property manager must be trained in understanding
NRAS and how to manage NRAS properties
• Government (FaHCSIA) requires specific information to
be reported annually. AHC requires it throughout the
year to minimise the risk of an ineligible tenant
PROPERTY MANAGERS ROLE (NRAS)
NRAS guidelines 10.2
• Assess initial and ongoing tenant eligibility and hold
appropriate documentary evidence (described later)
• Manage determination of market rents for dwellings and
the rents charged to tenants
• Report through approved participant (AHC) on
compliance with tenant eligibility, rent levels and other
regulatory requirements under the Scheme
• Retain for five years the documentary records necessary
to establish such compliance
REPORTING TO AHC
DSS require specific information to be reported
• Property managers are required to submit this information to AHC on time or
they may affect the owner’s annual NRAS payment amount
• The timing & nature of the required information may change with short notice
• FaHCSIA may require extra information to be provided and maintained by the
tenant
• Documents should be provided to AHC within 15 days of the event or by 30th
April whichever is sooner
• The NRAS year ends 30th April and information for ALL NRAS properties must
be provided to AHC before this date
• If information is correct, complete and received by AHC on time, it can be
submitted to FaHCSIA by 13th May for clients to receive their payment by 30th
June
• Late information will result in the payment being delayed by 12 months
NRAS ALLOCATIONS
The below diagram outlines how NRAS allocations are allocated.
Agent
•
•
AHC
Signs NRAS
Contract
Forwards to
AHC
•
•
Developer
Matches
dwelling
type
Confirms
with client
•
Updates
AHC on key
milestones
Client
•
•
AHC
Pays Est. fee
Confirms
any missing
info
•
Confirms
valid
contract
DWELLING AVAILABLE FOR RENT
The below diagram outlines how NRAS allocations become active and available for
rent
Developer
•
•
Confirms
dwelling is
completed
Forwards
COC
AHC
PTM
AHC
•
•
•
Advised PTM
Requests Info
•
Provides
Valuation
What we need:
•
•
•
•
•
•
•
Certificate of compliance and Notice of Completion Letter from the Developer (checked by DSS)
Independent Valuation from the Property manager (checked by DSS)
Date that the property is available for rent
Property considered “active” at this point
Client is entitled to NRAS incentive from active date & this is the NRAS start date
Tenant not required for a property to be active
If it will take more than 3 months to find a tenant please contact AHC
•
Makes
property
active with
DSS
Advised
Client
INDEPENDENT VALUATIONS
• Property manager organises the valuation on the owner’s behalf
• Valuations must:
• Be based on the conditions upon which the dwelling will be
rented
• Be completed prior to occupancy of the dwelling
• Not use other NRAS properties for rent rate comparisons
• Match the allocation type
• NRAS rent is based on 80% of this independent valuation
AVAILABLE FOR RENT
Tenants must not move into a property until it is “Available for Rent”:
The dwelling must have a certificate of compliance
Independent market rent valuation has been obtained
The property meets the requirements of the state’s landlord, tenancy,
building, health and safety laws and regulations
• The property is fully decorated including paint, floor coverings and
window treatments
• The property has appropriate security and safety features including
locks & smoke detectors
•
•
•
•
AVAILABLE FOR RENT CONT…
• The property has appropriate landscaping
• Property manager understands their role & will perform the role
required as outlined in the NRAS training provided by Affordable
Housing Consulting
• Property manager understands random audits by AHC or the Australian
Government may be undertaken to verify compliance to NRAS rules
• Failure to comply with the requirements of the Scheme may impact on
the Participant’s right to receive an incentive which may result in an
allocation being revoked if conditions are not complied with.
AVAILABLE FOR RENT TIPS
• The valuation can be ordered from 1st inspection to avoid delays. Check
with the Property Developer
• If the client is unhappy with a valuation, a new one can be ordered
before the lease starts
• COC & valuation are checked by DSS
• Commonly asked question - why there was a delay from COC to
available for rent
• We require the street number to activate a property
MARKETING AN NRAS PROPERTY
• The property can be advertised for rent before or after it is available for
rent
• The property can be advertised as full market rent (NRAS discount
applied when lease is signed) or at the discounted NRAS rent
• If promoting with NRAS, a website with more information can be useful:
•
•
www.nras.com.au
www.environment.gov.au/housing/nras/about.html
• Always advise AHC if and when a client wants to sell their NRAS
property
NRAS COMPLIANCE AND SETTING
RENT
NRAS APPROVED PROPERTY MANAGER TRAINING
COMPLIANCE
The below diagram outlines the NRAS compliance process.
Tenant
•
•
PTM
Provide proof
of income
Complete
Tenant
Consent form
and TDA
•
•
AHC - Ongoing
Double check
Proof of
Income and
TDA
Completed
lease in NRAS
Centre
•
•
Double
checks all
documents
Enters details
into DSS
reporting
system
AHC – Year end
•
•
Submits
claims to DSS
Advises
clients
NRAS RENT CALCULATIONS
• Independent valuations must be obtained before the NRAS period starts
and at the end of years 4 and 7
• The actual rent charged is set at 80% of the independent valuation in
years 1, 5 and 8 this is called the Market Rent.
• The market rent is increased each year by the relevant CPI index for the
states capital city
• Actual rent charged can only be increased once every 12 months for
each sitting tenant.
• Any increase in rent must be supported by a desktop
valuations/comparison.
COMPLIANCE REQUIREMENTS
• Essential that compliance information is correct
• Tenant eligibility to income limits
• Rent is set at or below 80% of market rent
• Rent is not increase by more than CPI
• What we need:
•
•
•
•
•
•
Copy of the lease
Copy of poof of income documents (POI)
Copy of the completed tenant consent form and demographic assessment (TDA)
Agent check & declaration
Advice when tenant breaks lease
Other changes to lease or household
NRAS INCOME LIMITS
• Household income limits are indexed annually on the 1st May
• Eligible tenant’s incomes for 12 months prior must be equal to or less
than the initial income limit when they become a tenant
• Household incomes can increase by up to 25% (upper income limit)
before eligibility is affected
PROOF OF INCOME
• The property manager must assess tenants for NRAS eligible income
• Income is based on the gross household income
• For NRAS purposes, a household is considered to be:
All persons ordinarily residing in the dwelling. The Department therefore requires all persons who
ordinarily reside in an approved rental dwelling to have their income included as a member of the one
household, in accordance with the income limits. (G 10.4.3)
• The owner of the property cannot be a tenant
• The tenant must supply the landlord or property manager a written statement of
their gross income for the previous 12 months
PROOF OF INCOME Continued…
• Property managers are required to obtain sufficient evidence to satisfy themselves
that the tenants are eligible for the purposes of the Scheme (G 10.2)
• Property managers should not offer the property to potential tenants who refuse to
supply requested information
Examples of proof of income
PROOF OF INCOME ASSESSMENT
GUIDELINES
• Examples of proof of income, which DSS deem acceptable are:
• Copies of payslips, Notices of assessment from ATO, Letters from employers, Statements
from superannuation funds, Statements from Centrelink, Statements of dividends or rents
paid, Other proof of income as appropriate
• Adults (18 years and over) with little or no income should supply a tax return or
statutory declaration
• Non-Australian residents that do not have any of the above proof of income should
supply 3 months bank statements showing regular income payments and/ or a
statutory declaration specifying how much income they receive and the income
source
• Please show workings for calculating income
TENANT DEMOGRAPHIC ASSESSMENT
• Tenant demographic assessment (TDA) is a requirement of the Government
• It must be signed by the tenant(s) and the property manager to allow AHC to
forward information to the Government
• Specifies the income as discussed above
• Property manager must check TDA for sensibility & ensure that it is fully completed
HOUSING STRESS
If a tenant is spending more than 40% of their income on rent, DSS may ask us why
tenants are in housing stress
Some reasons include:
•
•
•
•
•
Other income (needs to be declared & reassessed)
Someone else is paying for rent (needs to be declared & reassessed)
Someone else is paying for food or other expenses (needs to be declared & reassessed)
No car because they work near home – walk or catch public transport, reduced insurance etc
Recently received an income increase that is not reflected in income for previous 12 months
LEASE CHANGES OR RENEWALS
• At each new lease, each lease renewal or every 12 months, the property manager
must reassess the tenants eligibility
• All new information (lease, POI, TDA & agent check) is required by AHC within 14
days of the lease start date or by 30th April whichever is sooner
RENT INCREASES
• Rent cannot be increased on a tenant unless they have lived in the dwelling for 12
months or more.
• When conducting a rent review a desktop valuation/comparison must be conducted.
• You can only increase the rent by the lower of:
1.
2.
the CPI index for the current NRAS year
The value of the desktop valuation
• If a tenant is paying more than 80% market rent, AHC will require, a rent adjustment
to be performed and:
•
•
Proof of the corrected rent
Proof of a credit for the overpayment
CONTINUING ELIGIBILITY
• Property managers are required to monitor the eligibility of the tenants throughout
the year
• Eligibility should be reassessed prior to the offer of a lease renewal
• If the household makeup changes during the year, you must notify AHC, assess the
eligibility of the new household structure and provide all documentation to AHC
within 15 days of the change
INELIGIBLE HOUSEHOLD INCOME
• NRAS guidelines state:
•
•
Tenants whose income exceeds the relevant upper limit for their household type for two
consecutive eligibility years cease to be eligible tenants
NRAS owners will not receive NRAS incentive payments with ineligible tenants in the dwelling
(Appendix 2)
• If it is discovered prior to lease renewal that tenants are no longer eligible the owner
may choose to not renew the lease, or renew for 12 months (maximum)
• Please contact AHC if you have any questions or worries about the eligibility of a
tenant
LEASE BREAKS
• If a lease is broken the property manager must:
•
•
•
Notify AHC the date the lease ended (via email)
Re-let the property to eligible tenants and provide all necessary documenation to AHC
Note the number of vacant days on the agent check & declaration
KEY CRITERIA
• The annual NRAS payment is affected if:
•
•
•
•
The dwelling is vacant for more than 91 days in an NRAS year
The tenants enter the dwelling with an income greater than the eligible limit
The rent is greater than 80% of market rent
The tenants has an income over the eligible limit for two consecutive years
NRAS CENTRE
NRAS APPROVED PROPERTY MANAGER TRAINING
NRAS CENTRE
• NRAS Centre’ is an online application designed by Affordable Housing Consulting to
increase the level of communication between property managers, investors and
Affordable Housing Consulting.
• This tool will help to ensure compliance with government regulations and assist in
giving comfort to Investors that their National Rental Affordability Scheme incentive
payment is secured each year.
• www.nras.com.au
NRAS CENTRE TASKS
• How to upload a valuation
• How to request a property for activation
• NRAS Centre Traffic lights
• How to establish a new lease
• How to renew a lease
• How to break a lease
• How to upload additional documentations
• How to change the rents
• Where to upload desktop valuation/comparison report
• How to run reports in NRAS centre
• How investors/owners can use NRAS centre