1. NRAS APPROVED PROPERTY MANAGER TRAINING

2. WHAT IS NRAS AND HOW DOES IT WORK?

3. 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.

4. 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

5. HOW DOES IT WORK? 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 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 Affordable Housing Consulting Managed the NRAS obligations and deals with the government. Distributes the tax offsets and state contributions to investors Affordable Housing Consulting Operating Framework

6. 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

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 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

9. NRAS ALLOCATIONS The below diagram outlines how NRAS allocations are allocated. Agent Signs NRAS Contract Forwards to AHC AHC Matches dwelling type Confirms with client Developer Updates AHC on key milestones Client Pays Est. fee Confirms any missing info AHC Confirms valid contract

10. DWELLING AVAILABLE FOR RENT The below diagram outlines how NRAS allocations become active and available for rent 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 Developer Confirms dwelling is completed Forwards COC AHC Advised PTM Requests Info PTM Provides Valuation AHC Makes property active with DSS Advised Client

11. 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

12. 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

13. 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.

14. 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

15. 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

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

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

18. 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.

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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.the CPI index for the current NRAS year 2.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

28. 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

29. 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

30. 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

31. 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

32. NRAS APPROVED PROPERTY MANAGER TRAINING NRAS CENTRE

33. 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

34. 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