Understanding your rental property contract

There is a lot of paperwork involved when you lease a home in Australia, but it’s worth signing a formal agreement to ensure your rights and the rights of the property owner are protected.

Once you have handed over information to prove your identity and employment status, you’ll be expected to sign a lease / rental agreement. There are a few things that are important to know before you take this step.

Here’s a handy guide to rental property contracts for tenants:

Types of Rental Property Contracts

In Australia, there are two common types of contracts/lease agreements:

• Fixed-term: Fixed-term agreements have a fixed start and end date, usually 12 months or more. These agreements give both parties more security because landlords cannot evict tenants without very good cause before the end of the agreement period, and if tenants leave before the agreement is up, they risk losing their bond. Fixed-term agreements can be re-negotiated at the end of the term or changed to roll from month to month.
• Periodic: Periodic rental agreements run on a month-by-month basis. In a periodic agreement, the landlord is free to ask the tenant to leave at the end of any month just as the tenant can leave by giving 30 days’ notice. It allows more flexibility but less security.

If you want the predictability of a fixed-term lease, speak to your property manager. When your current lease expires, you’ll have the option to revisit the terms before you lock it in for another year.

Rental Agreement Clauses to take notice of

A rental property contract is usually quite long so here are the elements to pay close attention to.

• Rent

Your lease agreement will outline the amount of rent to be paid and how frequently you pay it, usually weekly or monthly. You will have to take careful note of this as it is the amount and times that you will need to pay. When you sign the lease, you are agreeing to pay the set amount at the set time. Failing to do so can put you in breach of your agreement and at risk of being asked to leave.

Take a look as well about when rental price increases can be applied. Make sure that any wording around price increases doesn’t go against the law in your state.

Check details about how you will be notified about a rent rise; it should be in writing.

• Bond

Four weeks’ worth of rent is the maximum bond allowed in most states.

This money you have over when you move in is there to protect the landlord in case you cause any serious damage to the property. Most tenants will get their bond back when they vacate a property, but if anything has been damaged, the landlord may hold onto your bond to pay for repairs.

There are rules about how your bond money can be held and how quickly it should be returned to you when you leave a rental property. For example, in NSW, tenants and landlords are encouraged to use a system where bond money is submitted to the Department of Fair Trading. Once your tenancy has ended, you can put in a claim for a refund yourself.

• Terms and Conditions

The terms and conditions are the details that explain how you are expected to behave as a renter.

They specify your rights and responsibilities as a tenant, as well as provide an outline of rules regarding subletting, number of occupants, maintenance responsibilities and any restrictions on modifications to the property.

Breaking any of these terms and conditions can result in trouble with your property manager and landlord, so read them thoroughly before you move in.

• Repairs and Maintenance

One issue many renters have is the question of who is responsible for what when it comes to repairs and maintenance.

Generally, landlords are responsible for structural repairs, while tenants are expected to maintain the property’s cleanliness and inform the landlord of any necessary repairs promptly. Always double-check that this is clearly outlined in the paperwork so there is no confusion when things break.

• Property Condition Report

Before moving in, both you and the landlord should complete a property condition report. This report documents the condition of the property, including any existing damages.

Review this report carefully because it will protect you if your landlord or property manager claims you caused damage that was there before you moved in. If you notice anything already broken or damaged, take a photo and store it somewhere in case you need it in the future.

• Dispute resolution

In the event of conflicts or disputes, your lease agreement might outline procedures for resolution. Many states offer free services to help tenants and landlords resolve disagreements, so be sure to explore these options if you need to.

If the property owner or manager breaks any of the provisions of your lease agreement, you should first talk to them about the issue, then seek help from your local tenants’ association if necessary.

Don’t skip the fine print

A quality property manager will be happy to walk you through a contract so you feel comfortable signing a lease, which is why it makes sense to lease a home through a real estate agency that applies best-practice standards.

Looking for a place to rent? Contact your local Professionals provider today.