Tenancy Agreement (Lease) for Rented Residential Premises
In most cases, before you move into a rental property you will need to sign a lease; a legal contract between the tenants (the person renting the property) and landlords/agents (“the landlord”). The lease is an important document as it determines the legal relationship between these parties. In South Australia, any costs associated to preparing the lease must be borne by the landlord under the Residential Tenancies Act 1995 (SA) (“the Act”).
Although a lease can be drafted by anyone and parties have some freedom in what terms and conditions can be written into the lease, standard forms or leases are provided by the Tenancies Branch of Consumer and Business Services:
Note that there are certain terms that are required under the Residential Tenancies Act 1995 (SA) and even where these terms are not expressly included in the lease, they will be read into any agreement by virtue of the Act. Examples of these terms are: that the tenant keep and return the premises in a reasonable state of cleanliness; that the landlord provide quiet enjoyment of the premises by the tenant; and that the landlord take reasonable steps to provide and maintain locks necessary to secure the premises. Even if the parties agree to exclude any of these “mandatory” terms and conditions from the lease, the terms will be implied to be part of the lease. The parties can, however, apply to the South Australian Civil and Administrative Tribunal for an exemption to this rule.
Under the Act, a person who enters into an agreement or arrangement to defeat, evade or prevent the operation of the Act (directly or indirectly) will guilty of an offence and liable to pay a maximum penalty of $10,000.
Types Of Leases
Leases are either fixed term or periodic, and as their names suggest, they are differentiated by the time allotted to the lease.
Fixed Term Leases
These leases are created to encompass a set period of time and may be written or verbal. Although fixed term leases have expiry dates, the lease will not automatically terminate on the end date unless either the tenant or landlord gives 28days’ notice of his intention not to renew the agreement. The parties to a fixed term tenancy (entered into on or after 1 March 2014) must give this notice of termination of the agreement, the landlord should use Form 2A and tenants Form 4B.
A fixed term lease may end early by agreement between the tenant and the landlord, however, except where the landlord is in breach of the lease, the Act does not allow a tenant to give early notice to end a fixed term agreement (the Act provides some exceptions). On the other hand, if the tenant does not move out at the end of the lease and notice of termination has been given, the landlord can apply to the South Australian Civil and Administrative Tribunal for an order for possession of the premises.
A periodic lease has no pre-determined finish date. It continues on with the same terms and conditions until either the tenant or the the landlord give the appropriate notice to end it. Once a fixed term lease ends, and no new agreement is signed, the tenancy will usually roll over to a periodic lease should the tenant continue renting the property. Even though there is no new signed lease to replace the expired lease, the terms and conditions of the original agreement still apply. The tenancy period will then be determined by the interval between rental payment times under the agreement (e.g. fortnightly, monthly).
The terms and conditions of a periodic tenancy may be altered by the agent during the term of the tenancy, provided the tenant is given 60 clear days notice notifying the tenant of the changes or variance/s which shall thereafter form part of the tenancy agreement.
When a bond is paid, the landlord must complete an Inspection Sheet at the start and end of a lease. The report notes the general condition of the property, including fittings and fixtures. In this case, the parties must use the standard form Inspection Sheet provided by South Australia Consumer and Business Services.
The report is important because it can be used as evidence if there is a dispute about who should pay for cleaning or damage, particularly at the end of a tenancy. Even if no bond is paid, we recommend you complete a report as it may help if there is a dispute about the condition of the property in the future.
The landlord must complete and sign two copies of the Information Sheet before the tenant begins to occupy the premises. The tenant would then conduct his own inspection and indicate on the Inspection Sheets whether he agrees with landlord’s appraisal of the premises. Once the tenant signs both copies of the Inspection Sheet, one copy should be returned to the landlord. It is advised that both the tenant and landlord keep a copy of the signed Inspection Sheet during the course of the tenancy.
At the end of the tenancy, the landlord and tenant should arrange to conduct a joint inspection of the premises and note on the Inspection Sheet any damage or lack of cleanliness that has occurred during the tenancy. If the tenant and landlord do not agree on the condition of the premises or how the bond should be repaid, then they must indicate how they disagree on the Inspection Sheet. The Tribunal or Court will then determine based on the Inspection Sheet and other evidence how the bond will be repaid. The landlord primarily bears the responsibility for organising the joint inspection, and the Tribunal or Court is unlikely to look favourably upon an Inspection Sheet completed by the landlord alone if they have not taken reasonable steps to arrange an inspection with the tenant.
What Is A Bond?
A bond is a payment by the tenant to the landlord that acts as security against the tenant meeting the terms of the lease. The bond and rent are completely separate payments and tenants should not treat any part of the bond as rent.
At the end of the lease the bond is:
The amount of bond to be paid varies according to the type of property involved; for rents of $250 per week or less four weeks rent may be asked for as a maximum, for all other amounts six weeks rent may be asked for as bond payment.
Lodging a bond
The landlord must lodge the bond with Consumer and Business Services within two weeks of receiving it (registered agents have four weeks to lodge the bond). It is compulsory for registered agents to lodged the bond online using Residential Bonds Online Services while landlords and tenants can use either this service or the Bond lodgement form. In both cases landlords must give the tenant a receipt within 48 hours of receiving the bond.
Refund of the Bond
At the end of the lease, the bond should be returned to the tenant if there are no claims for cleaning, outstanding rent or other costs. If the tenant is not registered for Residential Bonds Online, the bond can be claimed by completing and signing a Bond Refund form.
Repairs In A Rental Home
A tenant must not intentionally or negligently cause or permit any damage to the property he is leasing and is responsible for any damage caused intentionally or negligently. This includes damage caused by guests unless the tenant can show that he could not reasonably have prevented the damage. Where the damage was caused negligently or intentionally by a guest, a tenant wanting to deny responsibility would be assisted by reporting the matter to the police.
The tenant is not responsible for damage caused by a genuine accident or through normal wear and tear; nor are they responsible for damage caused unintentionally through use of a domestic appliance requiring instruction for which the landlord has failed to provide.
The landlord is not in breach of his obligation to repair unless he has notice of the defect and fails to act with reasonable diligence to have it repaired. If something needs repair, the tenant should notify the landlord as soon as possible. If the disrepair is not the tenant’s fault and it is likely to cause undue inconvenience and the landlord refuses to carry out the repairs, then the tenant can arrange for the repairs to be done and pass the bill on to the landlord. It is important that the repairs must be carried out by a suitably licensed person, who should provide a report as to the apparent cause of the disrepair. The tenant can also claim reasonable compensation for any damage they have suffered as a result of the failure to repair; provided they have made a reasonable attempt to notify the landlord.
Can a landlord ask the tenant to pay penalties if, for example, utility charges are not paid by the due date?
The Act states that a person must not receive from a tenant a payment, other than rent or security (or both), for a residential tenancy. The Act further states that if a residential tenancy agreement provides that upon breach by the tenant of a term of the agreement the tenant is liable to pay an amount by way of penalty, the provision is void. No penalty charge can be claimed.
Is the tenant responsible for maintaining the garden?
A tenant is responsible to maintain the property and gardens in a reasonable condition. The trimming of ornamental trees and shrubs, the pruning of fruit trees and rose bushes are not the responsibility of the tenant. In fact, the tenant runs a risk of receiving a complaint from the landlord of inappropriate and inexpert trimming of permanent plantings.
Does the tenant have to steam clean the carpets at the end of the lease?
It is an assumed term of a lease that, at the end of the tenancy, the tenant must give the premises back to the landlord in a reasonable condition and in a “reasonable state of cleanliness”. The issue at the end of the tenancy is whether the carpets are left in a reasonable condition, not whether they need to be professionally cleaned.
Can the method of payment be changed during an existing agreement without the tenant’s consent? A term reserving the right to change the method of how a tenant is to pay rent is void and against the Act.
Does the tenant have to agree to a landlord inspection without any notice?
The tenant is entitled to receive proper notice before an inspection takes place. Even before each “routine inspection” is carried out proper notice must be given to the tenant; not less than 7 days and no more than 14 days before the inspection. The notice must also specify the reason of entry, the date of entry and a 2 hour time frame in which the entry will occur.