Water Efficiency Compliance - Property Manager Review

Part of the new Tenancy laws and regulations that came into effect on 31 January 2011 it is the requirement that the rental property must comply with the water efficiency guidelines at the commencement of a new lease before the owner can charge the tenant for excess water usage. All landlords were given a 12 months grace period to comply with this regulation whether or not a new lease has been entered into.

During the 12 month grace period we had undertake Water Efficiency Compliance test as part of our property management procedure for all properties that where charging the tenant for excess water usage and wished to continue doing so. This involved arranging for a certified plumber to inspect the rental property and check to ensure that the internal cold water taps have a flow rate of less than 9 litres per minute and that the property has no leaking taps.

Most newer properties did not require any tap ware upgrade. Most older properties required retrofitting water restrictors or tap ware upgrades. The cost to upgrade should only be a one off cost.

Unlike smoke alarms, it is not a stipulated requirement to obtain a WEC at the commencement of a new lease, as your property manager utilising the Stratvest System™ of better property management, we recommend obtaining a WEC at the commencement of each new tenancy. This will minimise the potential risk of your new tenant making a claim against you during or at the end of the new tenancy claiming that the property was not water efficient compliant. The onus will be up to the landlord to prove that it was but if a WEC was not obtained at the commencement of the new tenancy then it will be difficult to prove particularly if the property had the shower head restrictor or was faulty and the tenant can show that it was like this at the commencement of the lease. If the excess water claim is the average $350 per quarter then after say 3 years the landlord would have to refund back to the tenant $4,200. So you can see why it is so important to perform the WEC at the commencement of each new tenancy.

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To assist you further, we have listed below information provided by the Office Of Fair Trading

Paying for water charges

Landlords can pass on water usage charges to tenants provided all the following minimum criteria have been met:

• the rental premises must be individually metered (or water is delivered by vehicle, such as those with water tanks on rural properties) and
• the charges must not exceed the amount billed for water usage by the water supplier and
• the rental premises must meet required 'water efficiency' standards.

A rental property is considered water efficient if it meets these standards:

If a landlord and tenant are entering a new agreement after 31 January 2011 the landlord needs to ensure the premises are water efficient in order to pass on water usage charges.

For all tenancies in place before 31 January 2011, the landlord has 12 months to make the premises water efficient. Tenants can continue to be asked to pay water usage charges during the transitional period even if the premises are not water efficient. After 31 January 2012, tenants can only be asked to pay if the premises have been made water efficient.

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Answers to your water efficiency questions

Do I have to install water efficiency devices?

No. The installation of water efficiency devices is optional, however the Residential Tenancies Act 2010 states that if you wish to pass water usage charges on to tenants in a rental property, the property must be water efficient which includes the installation of water saving devices.

Are all water efficiency devices the same?

No. Water efficiency devices are given a WELS star rating based on the average flow rate that the device produces as defined in AS/NZS 6400. More information can be found on the WELS website (www.waterrating.gov.au).

How much notice do I need to give to my tenant to access the property to install the water efficiency measures?

You can access the premises at any time with the tenant’s consent. Otherwise, the law requires you to give the tenant at least 2 days notice to have access to carry out maintenance, such as installing water saving devices.

How often do I need to check the water efficiency measures?

The water efficiency measures should be installed at the start of the tenancy and noted on the ingoing condition report for the premises. You do not need to check the water efficiency devices during the tenancy.

If the existing tenant moves out, you will need to ensure the premises are water efficient when a new tenant moves in if you want to keep charging for water usage. If the previous tenant has removed the water efficiency devices, landlords are able to make a claim on their bond to recover the cost of reinstalling the devices.

My tenant does not want flow restrictors and is happy to sign a document saying they will pay for water. Can I do that?

No. Under the tenancy laws, a landlord cannot pass on water usage charges directly to their tenant unless the property has the required water efficiency measures in place for showerheads and certain taps. It may be useful to discuss the water efficiency requirements with your tenant and highlight the water and energy savings they will benefit from, once the property is water efficient. There are also many different types of flow restrictors you can install on your showerheads so that the quality of the water flow is not reduced.

Will water saving devices work with all hot water heaters?

No. Older style gravity fed hot water heaters (generally in the roof) do not provide adequate water pressure to enable a water saving shower device to work at its optimum and some instantaneous hot water heaters are also not compatible. Newer continuous flow models may work with water saving shower devices as most work with lower minimum flow requirements. If you are unsure, it is recommended that a plumber be consulted to advise whether a water saving device is suitable for each application before installation.

What if a water saving device doesn’t work with my hot water heater?

You are not required to install the water saving device. However, you are not able to pass on any water usage charges to a tenant if the property is not water efficient in accordance with the Residential Tenancies Act 2010.

How can I make the premises water efficient if the water saving device doesn’t work with my hot water heater?

You should consult a qualified plumber for advice. Options may include exchanging the hot water heater to a unit that is compatible with water saving devices.

If a landlord decides not to make their property water efficient, is the agent acting unlawfully in sending water invoices to the tenant knowing the property does not comply?

The agent in these circumstances may be in breach of the professional rules of conduct under the Property, Stock and Business Agents Regulation 2003. The rules state that an agent must deal honestly, fairly and professionally with all parties involved in a property transaction. Failing to comply with the rules of conduct can attract penalties and result in disciplinary action against the agent.

I was told I would have to pay for water usage but to date, have not been given a bill. Where do I stand if in nine months’ time I am handed a bill that is six months old?

You only have to pay the water usage if the landlord or agent gives you a copy of the part of the water bill setting out the water usage charges payable - or some other evidence showing how your usage was calculated - within 3 months of getting the bill.

Is the landlord able to install water efficient taps by themselves?

Yes. The landlord can install the water efficiency measures themselves or use a licensed plumber.

Do the premises have to be certified water efficient by a licensed plumber?

No. There is no requirement to provide a report from a plumber or the water supply authority certifying that the property is water efficient. The presence of the water efficiency measures needs to be noted on the ingoing condition report for the premises. It may also help to keep:

• invoices or file notes of work done
• receipts for any items bought
• packaging, warranties or instruction manuals.

Are there any rebates or Government bodies that offer a reduced rate for installing water efficiency measures?

Some local councils and water authorities offer rebates or other assistance to people who install devices which save on water and energy consumption and assist the environment. Some local councils run free showerhead exchange days and distribute Do-It-Yourself Water saving kits which include flow regulators and tap aerators. Contact your local council or water authority to inquire about assistance available in your area.

If the property has a bath, but no shower, do the bath taps have to be changed?

No. The water efficiency measures do not apply to bathtub taps.

Do the water efficiency measures apply to all internal taps, or only to some taps? Do they apply to external taps?

The water efficiency measures apply to showerheads and to internal cold water taps for the kitchen sink and bathroom hand basin. The requirements do not apply to other taps in the premises such as bathtub taps, laundry taps, outside taps for the garden, or taps for washing machines and dishwashers.

Who pays for the cost of installing water efficient taps? The tenant or the landlord?

The landlord is responsible for the cost of making the premises water efficient.

For more information about water efficiency measures view or download the following fact sheets:

• Paying water charges - information for tenants
• Passing on water charges - information for landlords

Disclaimer: Please note that the information contained herewith was current and applicable at the time of writing and id provided in goodfaith from external sources. All users should perform their own inquiries and not rely on the information contained herewith.