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NRAS APPROVED PROPERTY MANAGER TRAINING

NRAS APPROVED PROPERTY MANAGER TRAINING. WHAT IS NRAS AND HOW DOES IT WORK?. NRAS APPROVED PROPERTY MANAGER TRAINING. WHAT IS NRAS?. NRAS stands for National Rental Affordability Scheme

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NRAS APPROVED PROPERTY MANAGER TRAINING

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  1. NRAS APPROVED PROPERTY MANAGER TRAINING

  2. WHAT IS NRAS AND HOW DOES IT WORK? NRAS APPROVED PROPERTY MANAGER TRAINING

  3. WHAT IS NRAS? NRAS stands for National Rental Affordability Scheme A Labour Federal Government initiative to increase the number of affordable rental properties throughout Australia Provides the investor a grant ($10,917.00 pa for 10 years) if they meet NRAS criteria: Brand new property when entered into the scheme Rented at 80% of market rent Rented to eligible tenants Only properties approved by the Government are eligible to be in the Scheme.

  4. HOW DOES AHC FIT IN? Affordable Housing Consulting (AHC) is an approved NRAS participant. We have approx. 1700 NRAS allocations throughout SA, but a few have already been sold and activated into the scheme All NRAS properties must be managed through approved property managers We are required to train and provide regular support to our approved property managers.

  5. HOW DOES IT WORK? Affordable Housing Consulting Operating Framework Tenant Leases from Investor, pays 80% or market rent 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 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

  6. HOW DO PROPERTY MANAGERS FIT IN? The property manager together with AHC ensure that the dwellings meets all eligibility criteria Essential role, apart from managing the property, is to maximise and secure the investors annual incentive payment. The property manager must be trained in understanding NRAS and how to manage NRAS properties The Federal Government (Department of Social Services) requires specific information to be reported annually. AHC requires this information throughout the year to minimise the risk of an ineligible tenant and impact to investors incentive payment.

  7. 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

  8. REPORTING TO AHC The 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 The DSS may require extra information to be provided and maintained by the tenant Documents should be provided to AHC within 14 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 prior to this date If information is correct, complete and received by AHC on time, it can be submitted to The DSS by 13th May for clients to receive their payment early in the new financial year. Late information will result in the payment being delayed by 12 months

  9. NRAS COMPLIANCE AND SETTING RENT NRAS APPROVED PROPERTY MANAGER TRAINING

  10. COMPLIANCE The below diagram outlines the NRAS compliance process. Tenant PTM AHC - Ongoing AHC – Year end • Provide proof of income • Complete Tenant Consent form and TDA • Double check Proof of Income and TDA • Completed lease in NRAS Centre • Double checks all documents • Enters details into DSS reporting system • Submits claims to DSS • Advises clients

  11. NRAS RENT CALCULATIONS Independent valuations must be obtained before the NRAS period starts and at the end of years 4 and 7 (Start of years 5 & 8) 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 should only be increased once every 12 months for each sitting tenant or as allowed under the states Tenancies Act Any increase in rent must be supported by a desktop valuations/comparison.

  12. NRAS RENT CALCULATIONS RENT GRAPH TO EXPLAIN MARKET RENT, CPI INCREASES AND LEASE RENT.

  13. INDEPENDENT VALUATIONS Must be completed within 91 days of the yearly anniversary date of the property. Must be conducted and signed by a licenced valuer. Must clearly state the dwellings street address, number of bedrooms and the type of dwelling eg. Townhouse, House or Apartment. Must state a whole amount (not a range) and most not reference the inclusion of GST. Must be presented on the valuers letterhead. All valuations take effect from the yearly anniversary date of the property regardless of the date it was actually conducted. If a valuation is conducted late (after the yearly anniversary date) you may be required to provide the tenant with a refund if the rental value of the property has reduced below the rent currently being charged.

  14. INDEPENDENT VALUATIONS Independent valuations It is highly recommend that all valuations be scheduled approx. 45 days prior to the yearly anniversary date. This should allow enough time to engage a valuer, have them attend the property and conduct the valuation, and for them to provide you with the valuation report prior to the yearly anniversary date. Where the rent has been reduced the tenant needs to be notified of the reduction using our standard letter template.

  15. 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

  16. 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

  17. PROOF OF INCOME The property manager must assess tenants for NRAS eligible income Income is based on the gross household income for the previous 12 months. *** Note the full 12months must be accounted for when assessing 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 which is included in the TDA.

  18. 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, are over the relevant income limit or where they are unsure if the potential tenant is eligible. Examples of proof of income

  19. 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 AND 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. *** This should be converted to AU$ and evidence shown of the exchange rates at the time *** Please show all workings for calculating income as this makes it easier for us and the Department to validate the tenants income.

  20. 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

  21. 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

  22. RENT INCREASES Rent should not be increased on a tenant unless they have lived in the dwelling for 12 months or more or unless allowed by the state tenancies act When conducting a rent review it is recommended that a desktop valuation/comparison be conducted to justify any increase in rent. Any increases in rent must remain at or below 80% of the market rent. 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 Updated lease documents to show the correct rent amount.

  23. 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

  24. 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

  25. 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 documentation to AHC Note the number of vacant days on the agent check & declaration

  26. KEY CRITERIA The annual NRAS payment is affected if: Pro-Rated Incentive Payment if the dwelling is vacant for more than 91 days (3 months) in an NRAS year or over two consecutive NRAS year. Nil Incentive Payment for the entire year if the dwelling is vacant for more than 162 days (6 months) in an NRAS year or over two consecutive NRAS year. Nil Incentive Payment if the tenants enter the dwelling with an income greater than the eligible limit for the time that the tenant remains in the dwelling Nil Incentive Payment if the tenant has an income over the eligible limit for two consecutive years, for the period that the tenant remain in the dwelling Nil Incentive Payment for any time that the rent is greater than 80% of the market rent

  27. FURTHER INFORMATION AND RESOURCES The below links will provide further information on the NRAS scheme as well as additional training resources http://www.affordablehousingconsulting.com.au/property-manager-training.html Online copy of this training pack NRAS Centre Videos Work Instructions NRAS Centre Written Work Instruction NRAS Forms https://www.dss.gov.au/our-responsibilities/housing-support/programs-services/national-rental-affordability-scheme/information-for-nras-participants#eligibility Department of Social Services information including indexation values, mandatory requirements and tenancy manager information http://www.affordablehousingconsulting.com.au/ General NRAS information for Investors, tenants and FAQ’s

  28. NRAS CENTRE NRAS APPROVED PROPERTY MANAGER TRAINING

  29. 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

  30. NRAS CENTRE TASKS How to upload a valuation 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 rent on a dwelling Where to upload desktop valuation/comparison report How to run reports in NRAS centre How investors/owners can use NRAS centre

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