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?
Condition Reports record the general state of repair and condition of the rental premises at the beginning and end of the tenancy. If an issue arises about damage or disrepair to the premises, the Condition Reports are used as evidence by the Tribunal or Court to determine who is liable. This is important for determining how the Rental Bond should be paid out, or whether compensation should be paid to the landlord.
In NSW, the tenant and landlord must complete a Condition Report immediately before and after the tenancy agreement. The tenant and landlord should each retain at least one copy of the Condition Report during the tenancy.
The standard form Condition Report from NSW Fair Trading can be Downloaded for Free. It should be completed and signed by the tenant and landlord at the beginning and end of the tenancy.
Although a Condition Report is required by law, a tenancy agreement is still valid even if a report has not been completed.
The landlord must complete a Condition Report before or at the same time that the residential tenancy agreement is given to the tenant to sign. The landlord should inspect the premises thoroughly while completing the report to ensure it is as accurate as possible. Before the tenant signs the residential tenancy agreement, the landlord must give the tenant 2 copies of that Condition Report.
After receiving the 2 copies, the tenant must complete the Condition Report by indicating which parts they do or do not agree with. The tenant should carefully inspect the premises to see whether they agree with the landlord’s assessment.
The tenant must sign one copy of the completed Condition Report and return it to the landlord within 7 days of receiving it. The tenant and landlord must each retain a copy of the Condition Report.
It is in the best interests of both the tenant and landlord that the Ingoing Condition Report is completed as close as possible to the beginning of the tenancy. The Tribunal or Court will not value as highly a Condition Report completed too long after the tenancy begins.
In addition to the Ingoing Condition Report, the tenant and landlord must complete an Outgoing Condition Report at the end of the tenancy agreement, or as soon as practicable after it ends. The standard form Condition Report is used for both the ingoing and outgoing reports.
The Outgoing Condition Report must be completed at the premises by the landlord in the presence of the tenant. The standard form Condition Report has space for the tenant to indicate whether they agree with the landlord’s assessment of the premises.
Once the Condition Report has been signed by both the tenant and landlord, the Tribunal or Court will assume it is an accurate record of the state of the premises unless other evidence overrides it. Therefore, the tenant should carefully read the Outgoing Condition Report completed by the landlord, and indicate in the appropriate sections whether they agree or disagree with the landlord’s appraisal of the premises. If the tenant indicates that they disagree with a part of the landlord’s Condition Report, then the Tribunal or Court will not automatically assume that the report is accurate regarding that part.
The Outgoing Condition Report can be completed by the landlord alone if the landlord has given the tenant a reasonable opportunity to be present when the report is completed, but the tenant has chosen not to attend. It is the responsibility of the landlord to make a positive effort to arrange a mutually convenient time with the tenant for the Condition Report to be completed.
It is in the best interests of both the tenant and landlord to be present when completing the Outgoing Condition Report—this reduces confusion and speeds up any dispute resolution process.
If the landlord does not give the tenant a reasonable opportunity to attend, the Tribunal or Court will not attach much weight to the Condition Report and will not automatically assume it is an accurate record of the premises.
In addition to the standard form Condition Report, tenants and landlords can attach additional information to provide a more comprehensive account of the general condition of the premises.
For example, if a part of the premises is not included in the standard form Condition Report, then either party may add an additional document recording the state of that part. Further, it is common and good practice for tenants and landlords to take pictures of the premises at either the beginning or end of the tenancy to provide a visual record in addition to the written report.
If additional information is attached by the tenant or landlord, the other party should indicate whether they agree that it is an accurate record of the condition of the premises.
Condition Reports are particularly important in co-tenancy arrangements as they help in attributing liability to individual co-tenants for any damage caused to the premises. Every time a co-tenant is removed from or added to a tenancy agreement, a new condition report should be completed by the landlord, the continuing co-tenant(s), and the incoming or outgoing co-tenant(s).
By completing a new report each time there is a change in co-tenants, liability can be more accurately attributed to the responsible co-tenant, especially if the damage is only recognised a long time after a former co-tenant has left the premises.
If a tenancy agreement is renewed for the same property, and the tenants and landlord remain the same, then it is not necessary to complete a new Condition Report. The Ingoing Condition Report from the original tenancy agreement is transferred to the new agreement. An Outgoing Condition Report will still be required at the end of the second tenancy agreement if it not renewed again.
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.