A Residential Lease is an agreement between a landlord and tenant to rent a residential property for an agreed time in exchange for an agreed monthly rental payment. Residential Leases are also known as Residential Tenancy Agreements.
It is recommended that you always have a written agreement in place between a tenant and a landlord. In addition, the landlord is responsible for providing and is required to pay for the preparation of the Residential Lease.
Below is a list of some of the most frequently asked questions about Residential Leases. Click on any of the questions to reveal the answer.
What is a Residential Lease?
- A Residential Lease is an agreement between a landlord and tenant to occupy a residential premises for an agreed rental payment. The agreement sets out the terms of the arrangement between the landlord and tenant.
It doesn’t matter whether you’re a landlord or a tenant – you should have a written Residential Lease.
Is a Residential Lease the same as a Residential Tenancy Agreement?
- Yes. They are exactly the same thing. A “tenancy agreement” is another term for “lease” and both terms refer to residential property.
Are Residential Leases regulated?
- Yes. Each State or Territory in Australia has a Residential Tenancy Act that governs Residential Leases. These pieces of legislation ensure fair dealings and efficient process for both the landlord and the tenant.
Each State or Territory has its own legislation, with its own requirements regarding:
- Standard clauses
- Landlord/tenant relations
- Provision for a Tribunal to oversee any disputes, etc.
However, Residential Leases are broadly very similar between the different Australian States and Territories.
Who is supposed to pay for the preparation of the Residential Lease?
- The landlord is required to pay for the preparation of the Residential Lease. Having something is writing is highly recommended – so if you’re a tenant, ask you landlord for a Residential Lease.
Is a verbal Residential Lease agreement binding?
- A verbal Residential Lease agreement is still binding.
If you have agreed to lease a residential property for 12 months, your landlord can require you to pay for the full 12 months – even if you do not stay for the full period. Equally, if you have been promised the property for a 12 month period, your landlord cannot ask you to leave early – you have a right to stay for the period agreed verbally.
That being said, having a written Residential Lease agreement is a much better way to go. There can be no misunderstandings and everyone knows where they stand.
Are there different kinds of Residential Leases?
- There are 2 types of Residential Lease commonly used in Australia:
- Fixed Term – that is, for a specific period (e.g. 1, 2 or 3 years)
- Periodic Tenancy – usually week-to-week or month-to-month
Before I sign a Residential Lease should I check the condition of the premises?
- Yes. Definitely check the condition of the premises before you sign any agreement.
You should inspect the premises and write down any damage you notice or repairs that need to be made. Then you should agree when the damage or repairs should be repaired or replaced with your landlord before signing the Residential Lease.
Your landlord is required to give you an Inspection/Condition Report prior to entering any agreement. You and your landlord should both sign this Report and then ensure you keep a copy until your tenancy is finished. This Report is evidence in case your landlord tries to keep your bond for things you have not damaged or were damaged before you rented the premises.
Can my landlord increase my rent after I have signed the Residential Lease?
- Landlords and tenants can freely agree the starting rental amount without regulation. However, rental increases are regulated and may be reviewed by a Tribunal if there are any complaints lodged by either the landlord or the tenant.
Your rent cannot be increased before the end of the first year of your tenancy. After the first year, some Australian States permit rent increases every 6 months but this will depend on the amount of the increase and the specific terms of your Residential Lease agreement.
What rent-in-advance amount is typical?
- Tenants are usually required to pay both rent-in-advance plus a security deposit or bond to cover any unpaid rent or damage to the property.
The maximum rent-in-advance is usually between 2 weeks and 1 month, depending on the type of Residential Lease agreement and the State or Territory you are in.
What security deposit/bond amount is typical?
- A security deposit or bond is typically paid by the tenant to the landlord to cover any unpaid rent, damage to the property or losses resulting from the tenant not following the terms of the Residential Lease. A landlord is not ‘required’ to charge a bond but does have the right to ask for one.
The maximum security deposit or bond amount is determined by the State or Territory legislation and is typically between 4 and 6 weeks rent.
A bond must be lodged by the landlord with the State Bond Board (or in an approved account) within typically 7 to 14 days and a receipt given to the tenant.
How can a landlord remove a tenant?
- There are 2 ways a landlord may remove a tenant or terminate a Residential Lease:
- Giving notice in the approved form (determined by State/Territory law), or
- Applying to and using the Tribunal
Some States and Territories have instituted ‘emergency’ order mechanisms in their legislation to deal with and ensure the property is appropriately vacated.
What happens if a landlord does not act in accordance with the Residential Tenancy Act?
- If a landlord breaches the State’s or Territory’s Residential Tenancy Act they will be fined by the local Tribunal and in accordance with the local legislation.
Types of landlord breaches could include:
- Charging a higher security deposit or bond
- Requiring additional fees from the tenant, etc.
What rates/services is a landlord responsible for paying?
- Generally landlords are responsible for paying water and sewerage charges (unless agreed to prior in the Residential Lease).
Generally tenants are responsible for paying one-off installation and the ongoing costs of:
- Internet, etc.