This guide covers landlords (or head-tenants) and tenants (or sub-tenants) in a Residential Tenancy. This applies to the majority of share accommodation and residential property rental situations. To confirm it covers your situation visit What is my share accommodation situation?
Rent is a regular payment made by the tenant(s) to the landlord in return for the right of use of the property or room.
The tenant is required to pay the rent to the landlord on the day that the rent is due. The tenant can also choose to pay rent before the due date.
There are restrictions on the types of payments that a landlord can receive from a tenant during a tenancy. Rent is one of types of payment allowed. The Rental Bond and charges for utilities are the other main types of payments allowed during the tenancy.
There are some restrictions on the amount of rent in advance that can be paid and how it can be used.
The maximum amount of rent in advance that the landlord can require from the tenant is 1 months’ rent.
Alternatively, a tenant can volunteer to pay as much rent in advance as they wish.
Once rent in advance has been paid, the landlord cannot require the tenant to pay any further rent until it becomes due.
The method of paying rent should be agreed to by the tenant and landlord in the residential tenancy agreement. It is recommended that the tenant and landlord agree on an alternative means of payment in case issues arise with the main method.
The landlord cannot require the tenant to pay rent by cheque. The tenant may volunteer to pay the rent by cheque however.
The most popular ways of paying rent in a share accommodation situation are via direct bank transfer or in cash
Other payment methods could include cheque, credit card, BPAY or PayPal. Never pay rent via an untraceable money transfer system such as Western Union.
It is best practice for the landlord to not require the tenant to pay rent in a method that incurs a fee for transfer or deposit of funds. This includes fees charged by third party payment systems.
Keeping track of rent payments through receipts and other permanent, written records is an important part of securing a tenancy and preventing any issues from arising.
In the ACT, the landlord (or agent) must give a receipt immediately when a rent payment is made in person—usually by cash or cheque. If the payment is by any other means except direct bank transfer, a receipt must be given to the tenant within one week.
No receipt is required for electronic payments. This is because the electronic transaction record acts as a permanent record of the payment. Although this is sufficient, a written receipt gives greater certainty and clarity.
Although receipts are not always required by law depending on the way rent is paid, asking for and giving receipts regardless of payment method is best practice for landlords and tenants alike. In the unlikely event that a dispute arises regarding payment of rent, receipts are the main form of evidence used.
What should be in the receipt?
The receipt should clearly indicate that it is a receipt—it is advisable for each receipt to be a separate document rather than entries in a rent receipt book.
When a receipt is given, it should include the following details:
The landlord is also required to keep a record of rent paid for at least 12 months after the end of the tenancy, regardless of whether a receipt was given for the payments. If a receipt was given for the payment, then keeping a copy of the receipt is sufficient. The record should include the same details for each payment as are required for a receipt (listed above).
Although not required by law, if the tenant requests a copy of the rental record from the landlord, it is in the best interests of all parties for the landlord to share the record with the tenant.
Landlords are allowed to increase the amount of rent payable during the course of the tenancy. For the protection and certainty of both parties, there are restrictions on the when and how rent can be increased. In the ACT, the restrictions vary depending on the nature of the tenancy agreement.
Although it is not necessary for the tenancy agreement to include a term allowing a future rent increase in periodic agreements, it is best practice for all parties to be aware of that increases may be necessary, and if so, by how much and when. Making both the tenant and landlord aware of any rent increases means that people can be prepared for that possibility.
When rent can be increased
Rent can only be increased if the tenant is given at least 8 weeks written notice. The landlord is only allowed to increase the rent at least 12 months after the beginning of the tenancy. Any subsequent increases can only be made once every 12 months.
As mentioned above, the rent under a fixed term tenancy agreement can only be increased if the agreement allows this. The agreement must state either the increased rent amount, or at least a method for calculating the increased rent. While this is not required for a periodic agreement, it is in all parties’ best interests to at least discuss the potential for a rent increase during the course of the tenancy.
When a fixed term tenancy agreement continues after the fixed term has ended, it then becomes a periodic agreement. Therefore, after the end of the term, the rules for periodic agreements apply in place of the fixed term rules.
A fixed term tenancy is where the tenancy agreement has a specific length agreed to by the tenant and landlord, e.g. 6 months. A periodic tenancy is where the tenancy agreement has no specific length agreed to, e.g. Month-to-month
8 Weeks Written Notice
The requirement of 8 weeks written notice for any rent increase allows both the tenant and landlord time to discuss and prepare for any increase. Any increase in rent that does not follow this requirement is invalid.
To ensure that this requirement is met, there are a number of things to remember:
If the tenant believes that the rental rate has become excessive, the first step should be to discuss the issue with the landlord. If the landlord and tenant cannot come to an agreement, then the tenant can apply to ACAT for a review of the increase. Check out our Resolving Disputes page for more information.
Rent can be considered excessive because of an increase in the rental rate, or because the quality or nature of the premises has been reduced while the rent remains the same.
ACAT has the power to change the rental rate if it finds the rent to be excessive.
The rent under a tenancy agreement may also be reduced. In the ACT, the tenant and landlord can agree at any time to reduce the rent payable at any time.
In addition, there are three other circumstances where the rent may be reduced—these are listed below. In these circumstances, the tenant should make a written request to the landlord first. If the landlord does not agree to a reduction, then the tenant apply to ACAT. Check out our Resolving Disputes page for more information.
Reasons why Rent may be Decreased
Transferring money safely
When paying your deposit, bond or rent by cash make sure you get a receipt. With modern phones this can be as simple as an SMS or email confirming the amount, date and what it is for. Keep a copy of this incase you need it later.
Never ever transfer money to a bank account outside of Australia or use a untraceable money transfer system such as WESTERN UNION. If anyone asks you to do this on any website it is likely to be a scam and you are almost guaranteed to lose your money.
If this ever happens on Flatmates.com.au report the member immediately so we can investigate and take the appropriate action.
These legal guides provide a brief summary and introduction of the laws and regulations affecting share accommodation. They do not cover all cases in all legal jurisdictions and might not apply in your specific share accommodation situation. It is important that you use this information as a guide only and seek independent Legal Advice or consult the Relevant Acts. We do not accept any liability that may arise from the use of this information.