Entering a Lease for a Rental Property

Entering a Lease for a Rental Property – Key Tips for Tenants

Entering a lease for a rental property is a big commitment and once your sign the lease there is no cooling off period. Moving can be stressful, especially if you need to find a place quickly, but it is important to take your time to find the house or apartment that suits your needs and ensure that the terms of your agreement are fair and legal. This post has a NSW information focus, but also crosses over Victoria, Queensland and South Australia.

What to look for in your new rental property

When deciding where you want to live, it is a good idea to write out a list of the features that you need and want in your new rental property. That way you are more likely to move into a rental property that you will be happy living in. You should also consider the length of lease that you would like to sign and whether you would like to rent through a real estate agent or if you are comfortable to rent through a private landlord.

Inspecting the rental property

After you have searched for rental properties based on your criteria and have a shortlist of properties that you are interested in, you will need to book in for an inspection.

Most real estate agents will advertise the inspection times online. However, if there is no inspection time advertised (often private landlords don’t advertise inspection times), then you should call the listed contact on the advertisement to arrange a time.

When you inspect the rental property, make sure that you look through each room thoroughly, in cupboards and storage spaces. Take note of:

  • Any mould throughout the house. Pay particular attention to any mould or musty smell in cupboards, drawers and in the bathroom. It is very difficult to get rid of mould once it sets into cupboards and carpets.
  • The plumbing. For example, in the kitchen, check to see if there is an extractor fan that is plumbed outside the house. Check all fitting such as taps, toilets and the shower to make sure they work properly and don’t leak.
  • Heating and cooling. You may want to ask if the house is insulated. Consider how you will keep the house cool in summer and warm in winter.
  • The garden. If there is a garden or lawn, ask what will be expected from the tenant in regard to garden maintenance.

If you find something broken in the rental property or you have any questions, speak to the landlord or real estate agent on the day. It is good to show interest and be memorable, particularly if many people will potentially be applying for the rental property.

Private rental versus real estate agent

Many landlords employ a real estate agent to lease out and manage their rental property. Choosing a rental property that is managed by a real estate agent can give more security to the tenant because real estate agents are professionals whose job it is to know tenancy laws and make sure the property is maintained.

Some landlords choose to lease out and manage their rental property themselves. They are legally allowed to do so. Landlords must follow tenancy laws and if you rent privately, then you have the same rights as a tenant who has a lease through a real estate agent.

Applying for a rental property

Different real estate agents and landlords have different application requirements. However broadly speaking, most applications will require you to provide:

  • proof of your identity,
  • evidence of your income (such as payslips), and
  • the contact details of a rental referee (usually your current or previous landlord or real estate agent).

When you apply for a rental property you may be able to offer a lower or higher rental amount for the property if you think it appropriate. The landlord or real estate agent doesn’t have to accept your offer.

Signing the lease

If you are offered the tenancy and you would like to accept, you should be provided with a copy of the lease or rental agreement before the day you are due to sign it. Read through it carefully and ask the landlord or real estate agent to clarify any part of the lease that you don’t understand. If you are still unsure about a part of the lease, you can also contact:

Promised repairs to the rental property

Make sure that any repairs to the home that were promised to you when you applied for the house are completed either before you sign the lease or that you have a written undertaking before you sign the lease that repairs will be completed in a reasonable timeframe.

Break lease fee

Some leases have a break lease fee. This fee will be applied if you end the lease before it has expired. For NSW, this will be equivalent to six weeks rent within the first half of your fixed term and four weeks rent in the second half of your fixed term (as long as the fixed term is less than three years).

There are some exceptions to break lease clauses such as if you have accepted an offer for Social Housing or if the landlord puts the rental property on the market for sale and you weren’t told the house would be sold before you signed your lease. The full list of exceptions is available on your State’s Fair Trading or Consumer Affairs website.

Pets clauses

If your landlord agrees that you can have one or more pets in the rental property, then they may add a pets clause to the lease. Any additional clauses such as a pets clause must be added to the lease before you sign it.

A pets clause may include a statement that you will be liable for any damage to the rental property caused by the pet(s) or that you will have to have the carpets professionally cleaned at the end of your lease due to having pets inside. Landlords cannot ask you to have the carpet professionally cleaned on another basis.

Bond

When you move into a new rental property you will most likely be asked to pay bond. The bond amount cannot be more than four weeks rent. The landlord cannot ask for more bond money from you for any reason, including having a pet or children.

You will give your bond to the landlord or real estate agent when you sign the lease. You cannot be required to give the bond beforehand.

When you hand over your bond, both you and the real estate agent or landlord will sign the Rental Bond Lodgement form. Additionally your real estate agent or landlord is required to give you a receipt of receiving your bond.

Your real estate agent or landlord will lodge the bond with:

  • NSW Fair Trading – and you’ll receive a notice notifying you of your bond number from Fair Trading within two months.
  • The Victorian Residential Tenancies Bond Authority (RTBA) – and you’ll receive a receipt 15 business days after payment.
  • The Queensland Residential Tenancies Authority (RTA) within 10 days of receipt.

If you don’t receive your notice or receipt within the timeframe, call Fair Trading or the relevant Authority to make sure your bond was lodged with them.

Rent in advance

When you sign your lease, you may be asked to pay two weeks rent in advance. This is not additional bond. This means that rent won’t be due again for another two weeks.

Other charges under your lease

You cannot be charged for anything other than the bond and rent at the start of your lease. You cannot be charged for the cost of preparing your lease or the initial cost providing keys or security devices for the property.

Condition report for your rental property

When you sign the lease of your new rental property, you should be given two copies of the condition report. You will have 7 days to complete the condition report and return one copy to the landlord or real estate agent.

As soon as you move into the rental property, you should inspect all rooms (including light fittings, taps, walls, floors, cupboards and any furniture or utensils) for damage or wear and tear. Note down your comments in each section of the condition report. If you notice any damage that wasn’t noticed by the landlord or real estate agent, it is a good idea to take a date stamped photograph of it as well.

What you should receive when starting a lease

When you sign the lease of your new rental property, you should be given:

  • A copy of the new tenant checklist
  • Keys and security devices
  • Two copies of the condition report
  • A copy of your lease
  • A receipt for your bond
  • A Bond Lodgement form for you to sign

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