Residential Rental Agreements (Leases) in Australia: A Complete Guide
A rental agreement or lease is a legally binding contract between a renter (tenant) and a rental provider (landlord). It guarantees the renter use of the property, provided they make regular payments to the landlord for a designated period of time. If either party fails to uphold the terms of the contract, there are consequences for doing so.
Understanding the terms of your rental agreement is important to ensure you meet your obligations and know your rights if the tenancy does go pear-shaped. All Australian states and territories have laws in place to protect both parties and the rental agreement will play a key role if any disputes arise.
Fixed-Term and Periodic Agreements
There are three types of residential rental agreements in Australia: short fixed-term agreements, long fixed-term agreements and periodic (month-to-month) agreements.
Short fixed-term agreements
Short fixed-term agreements are usually for 6 or 12 months but they can be anywhere up to 5 years in length. A short fixed-term agreement can be either verbal or in writing. When a short fixed-term agreement comes to an end and the tenant stays in the property without signing another agreement, it automatically turns into a periodic (month-to-month) agreement.
Long fixed-term agreements
Long fixed-term agreements are for five or more years and must be in writing. They may often include periodic rent increases and bond top-ups, as well as agreements allowing the tenant to install fixtures and/or alter the property.
When a long fixed-term agreement ends and the tenant stays in the property without signing another agreement, it automatically turns into a periodic (month-to-month) agreement.
Periodic (month-to-month) agreements
Unlike fixed-term agreements, month-to-month agreements don’t have predetermined end dates. It can be a verbal or written agreement, with payments made weekly, fortnightly or monthly.
Conditions and Terms of Agreements
A lease is a legally binding document that outlines the terms of a rental agreement and the duties of each party involved. It should include the property address, the weekly/fortnightly/monthly rent and the required security deposit. It should also outline the duration of the lease and any consequences for breaching the contract. Leases should include the responsibilities of both parties, as well as any rules around pets.
If there are any special considerations included in a lease, it’s important that you carefully review them before signing the agreement. Also, you should be aware that there are many conditions that cannot be included by law. For example, a tenant cannot be required to:
• take out insurance
• pay any additional costs or rent if they break the rules of the agreement
• pay for the preparation of the agreement
• organise or pay for safety equipment which is the landlord’s responsibility
• compensate the landlord/rental provider for harm or loss
If any of the above are included in a lease, it immediately becomes invalid. In fact, rental providers/landlords can be penalised for doing so.
In addition, the lease cannot state that:
• rent will be reduced if the tenant meets all of the rules of the agreement
• the tentant required to pay excess as part of a landlord’s insurance policy
• the tenant must pay the landlord’s costs of filing any legal applications
General Tenancy Agreement
Each state and territory has its own legislation regarding tenancy agreements and what needs to be included. This template from the Residential Tenancies Authority of Queensland is a good example.
Generally speaking, a tenancy agreement needs to include the name of the lessor and tenant(s), including their phone number and/or email address. It should also include the address of the rental property and any inclusions provided, such as furniture or appliances. Additionally, the tenancy agreement needs to outline how notifications may be issued, with email the most common choice.
Next, the tenancy agreement should detail the amount of rent to be paid and how often (weekly, fortnightly or monthly), as well as the day on which payments should be received by the landlord. It should also provide several options for the payment of rent (eg. electronic funds transfer, cash or direct debit), plus the bank account details and the preferred payment reference.
If electricity, gas and water costs are the tenant’s responsibility, this needs to be outlined, including the percentage they are responsible for. If there are applicable body corporate by-laws the tenant must abide by, there needs to be an indication that they have been supplied.
The tenancy agreement should also clearly state how many people are allowed to reside at the property and if pets have been approved or not. At the bottom of the lease, you might also find the landlord’s nominated repairers and their phone numbers, in case you have any electrical or plumbing issues.
During the Tenancy
Throughout the tenancy, renters should always keep a copy of the lease and the condition report that was completed before moving in. This is a record of any existing damage at the property so that you aren’t penalised for it. A renter should also maintain records of any requests for repairs and invoices/receipts for payments incurred as a result of staying at the property. If there has been written correspondence with the landlord, consider taking screenshots of the conversations for future reference.
Landlords should keep records of all of the above, as well as invoices/receipts and photographs from any maintenance work completed. They should also have insurance policies and documents related to the property, plus records for taxation purposes. It’s a good idea to retain any relevant tenant files, such as applications and screening reports, as these may come in useful if a dispute does arise.
Ending Your Tenancy
Each state and territory has its own rules when it comes to ending a tenancy and this differs depending on whether it is a fixed-term or a period agreement. Taking these notification periods into consideration, it’s important that you discuss with your landlord/property manager well ahead of time if you want to remain in a property after the fixed-term lease has expired and whether to sign a new fixed-term agreement or roll over into a periodic rental agreement.
NB: The following timelines for ending a lease are subject to change and may be subject to specific conditions. Always check with the relevant state/territory tenants’ union before signing a lease to understand the current requirements.
New South Wales
In New South Wales, tenants need to give at least 14 days' notice to end a fixed-term agreement, unless it is due to a rent increase, in which case you need to give 21 days' notice.
If you are on a periodic agreement, you need to give 21 days' notice if there is no reason and 14 days' notice if it is due to a breach of the agreement. No notice needs to be given if the termination is due to the premises being unusable or because of domestic violence.
If a landlord wants to end an agreement at the completion of a fixed term, at least 30 days’ notice must be given.
In Victoria, tenants need to give 28 days' notice to end a fixed-term agreement, which will automatically roll over to a periodic (month-to-month) agreement if no notification is given. Periodic agreements also require a minimum of 28 days’ notice.
If a landlord wants to end an agreement at the completion of a fixed term, they must give at least 60 days’ notice.
In South Australia, tenants need to give 28 days' notice to end a fixed-term agreement, which will automatically roll over to a periodic (month-to-month) agreement if no notification is given.
Periodic agreements require at least 21 days' written notice to be given or one month (if rent is paid on a monthly basis).
If a landlord wants to end a tenancy agreement, they must give at least 90 days’ notice.
In Queensland, tenants need to give at least 14 days' notice to end either a fixed-term or periodic rental agreement.
If a landlord wants to end a tenancy agreement, they must give at least two months’ notice.
Australian Capital Territory
In the ACT, tenants need to give at least 21 days' notice to end a periodic agreement. At least 14 days' notice needs to be given for a fixed-term agreement.
If a landlord wants to end a tenancy agreement, they must give at least 12 weeks’ notice.
In Tasmania, tenants need to give at least 14 days' notice to end a periodic rental agreement or a fixed-term agreement that has rolled over into a periodic agreement.
If a landlord wants to end a tenancy agreement, they must give at least 42 days’ notice.
In the Northern Territory, tenants need to give at least 14 days' notice to end a periodic rental agreement or a fixed-term agreement that has rolled over into a periodic agreement.
If a landlord wants to end a tenancy agreement, they must give at least 42 days’ notice.
In the Northern Territory, tenants need to give at least 21 days' notice to end a periodic rental agreement or a fixed-term agreement that has rolled over into a periodic agreement.
If a landlord wants to end a tenancy agreement, at least 30 days’ notice must be given.
A lease outlines (in writing) everything you need to know about your rental agreement and the conditions under which you can legally stay in the property. It’s essential that you carefully read through it and understand its requirements before signing on the dotted line.
If you are unsure about any included conditions, don’t be afraid to reach out to your local tenants' union for clarification. They are also a good first port of call if you feel that your landlord has breached the conditions of the contract and the steps you should take in response.