Understanding Real Estate Tenancy Agreements
As a legal document make sure you spend time reading and understanding what you are signing
A tenancy agreement (or lease) is a written agreement between a tenant or resident and a property manager / owner. As it is a legally binding contract spending time reviewing the agreement before you sign it is critical.
While each state and territories regulations vary slightly the tenancy agreement must include the following:
- The name and address of the tenant, and the property manager/owner or provider
- The dates when the agreement starts and ends (or state that the agreement is periodic)
- Details about how the tenant should pay the rent and how much rent is to be paid
- Details about what the tenant and the property manager/owner or provider can and cannot do, known as 'standard terms'
- Any special terms (these should be agreed in advance, e.g. that dogs are allowed but must be kept outside or carpet cleaning, no smoking etc)
- The period of tenancy agreement
- Fixed term agreement - where a tenant/resident agrees to rent a property for a fixed amount of time (for example, 6, 9 or 12 months)
- Periodic agreement - when a tenant/resident lives there for an indefinite period
Other points to consider
- A written agreement must always be used when renting, even if the person renting is family or a friend.
- The tenant should be given the agreement before paying any money or being committed to the tenancy and should read it and ask questions if they do not understand anything in it.
- If a tenant does not have a written agreement they still have protection under the law.
- After thouroughly inspecting the property if you identify any maintenance issues that need to be rectified, ensure they are added into the tenancy agreement with a time frame to be fixed
Responsibilities of the Landlord / Agent
The landlord /agent is responsible for:
- Meeting all the costs of preparing the tenancy agreement
- Ensuring the correct form is used and completed
- Providing a copy of the proposed agreement along with any relevant body corporate rules or bylaws to the tenant before they sign it. Once the tenant signs the agreement, they must return it to the lessor/agent within five days. The lessor/agent then has 14 days to give a copy of the signed agreement to the tenant
- Ensuring that, when an agreement is signed, there are no legal problems that would prevent the tenant from living in the premises for the length of the tenancy, and
- Ensuring the premises are in a good state of repair and ready for the tenant to move into on the agreed date.
Holding deposit and tenancy agreement
In some cases prospective tenants may be asked for a deposit to place a hold on the property they wish to rent. A copy of the tenancy agreement must be given to the prospective tenant before they pay the holding deposit. Only one tenant can be asked to provide a holding deposit at a time. This money is held in trust and refunded to the prospective tenant if they decide not to go ahead with the rental.
Keep Good Records
A year can be a long time, and it's easy to lose documents or throw out old paperwork. Don't let this happen with your tenancy agreement. It's a vital document that you will need when the lease ends, and is effectively the rules you must live by in the house.
Keep this, any bond lodgement forms and copies of emails in a specific folder for safe keeping. Nine times out of 10 they won't be needed to resolve a dispute, but better safe than sorry! Taking photos of the residency before you move in is also an excellent idea, to prove the condition of the dwelling both before and after your tenancy.
Each state and territories rental regulations vary slightly to find out about what is required for your area make sure you read our state and territory renting articles.