Tenancy agreement (lease) for rented premises
In most cases, before you move into a rental property you will need to sign a lease; a legal contract between the tenant (the person renting the property) and the landlord. The lease is an important document as it determines the legal relationship between these parties and should be read carefully by both parties before it is signed. As soon as the lease you will not be able to cancel the contract without incurring a penalty; this is referred to as there being no “cooling-off period”.
Types of Lease agreements
The three most common types of leases are short fixed-term leases, long term leases, and periodic leases, and as their names suggest, they are differentiated by the length of time allotted to the lease.
Short Fixed Term Lease
These leases are created to encompass a set period of up to five years and may be written or verbal. We recommend, however, that for certainty and peace of mind you use written leases. You can download an example of a Residential Tenancy Agreement here.
Periodic or Continuing Lease (month by month)
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.
Although the rights and obligations under a fixed term agreement and a periodic agreement are generally the same, we recommend that the person renting sign a new fixed term lease since there is a difference in how the tenancy can be ended and in a periodic agreements the landlord can increase the rent when he chooses to, as long as the tenant is given at least 60 days notice in writing.
Long Fixed Term Lease
A long-term lease allows tenants and landlords to tailor the terms of a lease agreement of more than five years.
Long-term leases MUST be in writing and need to accurately reflect the wording of either of the following official forms, which you can download below:
In its very essence the leases include what one would expect: the period of the tenancy, the amount of rent and how it is to be paid, and the bond amount.
The tenant and landlord should also check the agreement and be sure that it reflects their needs and that everything that was agreed to verbally is included in the agreement.
When a bond is paid, the landlord or landlord must prepare a condition report. The report notes the general condition of the property, room or caravan, including fittings and fixtures.
The condition 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 condition report. This can help if there is a dispute about the condition of the property in the future.
Once a bond is paid, the landlord must give the tenant two signed copies of the condition report before he moves in. The tenant must then return a copy of the condition report to the landlord within three business days of moving in should he wish to change part of the report.
Download Condition Report
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 rental agreement or duties under the Residential Tenancies Act 1997.
The bond cannot be used to pay the final (or any) rent. The bond and rent are completely separate payments and tenants may be fined for treating any part of the bond as rent.
The bond must be lodged with the Residential Tenancies Bond Authority (“RTBA”) who will hold it in trust until the end of the lease. At the end of the lease the bond is:
In a short-term lease (five years or less), if the weekly rent is $350 or less, the bond cannot be more than the amount of one month’s rent.
In a long-term lease (more than five years), if the weekly rent is $760 or less, the bond cannot be more than the amount of one month’s rent. Unfortunately, the Residential Tenancies Act 1997 does not state how much a bond should be if the weekly rent is more than $350 in a short term lease or $760 in a long-term lease.
A landlord or agent, however, can ask for a bond amount that is more than one month’s rent if the:
Lodging a bond
All rental bonds for residential properties in Victoria need to be lodged with the RTBA either electronically or on a paper form (if not available electronically). Agents and landlords usually initiate bond lodgements and claims, and are obliged to give the tenant a bond lodgement form for signing.
When the RTBA receives the bond lodgement, the tenant will get a copy of the bond receipt by email or mail. Tenants should include their email address to get the receipt as soon as possible. The bond receipt/ID number should be kept in order you wish to search on RTBA Online for bond details. The landlord/agent will only get a receipt if they ask for one.
If the tenant does not receive the bond receipt within 15 business days after paying a bond, he can call the RTBA on 1300 137 164 for assistance.
If a bond is not paid, the landlord/agent can organise to collect the money and re-lodge the bond, or ask the tenant to vacate the premises by giving the tenant a:
Refund of the Bond
A full refund should be given to the tenant if the rent has been paid in full, all bills relating to the property have been duly paid, and the property is left in good condition when he moves out. Note, claims can’t be made for ‘fair wear and tear’, such as carpets wearing out over a long time.
Should there be a dispute regarding the amount of bond to be returned to the tenant (or kept by the landlord), the tenant, resident, landlord/agent can apply to the Victorian and Civil Administrative Tribunal for a decision on who gets all or part of the bond.
If you get written permission from your landlord to sub-let the rental property, you become the head tenant and must take on landlord responsibilities. This includes lodging the sub-tenant’s bond with the RTBA.
Important Legal Formalities
At the start of every tenancy, the tenant must receive a copy of the following guide written by Consumer Affairs Victoria: Renting a Home: a Guide for Tenants. If the tenant has agreed in writing to receive notices and other documents electronically, the guide can be forwarded in electronic form. Otherwise, the landlord or agent must give the tenant a printed copy. Also, among other things, a 24-hour contact number has to be given to the tenant for urgent repairs, a copy of the signed lease (within 14 days of signing) and keys to all the locks in the property.
What are “Urgent repairs”?
The Residential Tenancies Act 1997, provides a list of urgent repairs in a rental property, and include a: burst water service; blocked or broken toilet system; serious roof or gas leak; dangerous electrical fault; flooding or serious flood damage; serious storm or fire damage; failure or breakdown of the gas, electricity or water supply, or any essential service or appliance provided by a landlord or agent for hot water, water, cooking, heating, or laundering; a serious fault in a lift or staircase; and, all faults or damages in the premises that make the premises unsafe or insecure.
If you can’t afford to pay for urgent repairs and the landlord hasn’t acted, you can apply to the Victorian and Civil Administrative Tribunal requesting the work to be done. All applications for urgent repairs must be heard by the tribunal within two days.
What are “Non-urgent repairs”?
Under the Residential Tenancies Act 1997, a non-urgent repair is any repair that falls outside the definition of an urgent repair. If a rented property needs non-urgent repairs, we recommend the tenant requests and describes the repairs needed using Consumers Affairs Victoria’s Notice to landlord of rented premises.
If the landlord refuses to do non-urgent repairs after 14 days’ notice, the tenant can ask Consumer Affairs Victoria to inspect the property. If the landlord hasn’t done the repair work after the inspection, the tenant can ask the Victorian and Civil Administrative Tribunal to order the landlord to do the repairs.
Before 19 June 2019, a landlord or agent could increase the rent amount once in any six-month period. Today, rent increases are limited to once every 12 months and the tenant must be given at least 60 days’ written notice of any potential rent increase. Should the tenancy agreement be for a fixed amount of time, unless the agreement states otherwise, the rent can’t increase before the end date.
If the tenant thinks the rent increase is too high he can request a rent assessment by downloading the Request for repairs inspection or rent assessment Form from the Consumer Affairs Victoria website. The tenant must make this request within 30 days of receiving notice that the rent is being increased.
Should the tenant disagree with Consumer Affairs Victoria’s assessment, he has 30 days from receiving the report to appeal to the Victorian and Civil Administrative Tribunal.