NSW Rent Payments

In NSW the maximum rent in advance a landlord can ask for is 2 weeks. Receipts are required by law for any rent paid in person (cash or cheque) and the landlord must give 60 days written notice for any rent increases.

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.

What is the maximum rent in advance that can be charged?

There are some restrictions on the amount of rent in advance that can be paid and how it can be used.

A landlord can only require a tenant to pay a maximum of 2 weeks rent in advance. But the tenant may pay more than 2 weeks rent in advance if they wish to do so.

Once rent in advance has been paid, the landlord cannot require the tenant to pay any further rent until it becomes due.

How should rent be paid?

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 most popular ways of paying rent in a share accommodation situation are via bank transfers 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.

In NSW, the landlord must provide the tenant at least one payment option that is readily available and does not incur any additional fees or charges. Examples of prohibited charges include transaction fees and service charges imposed for each payment. This includes fees and charges levied by landlords or third party payment systems. However, the ordinary bank or account fees payable by a tenant to their financial institution are not considered to be prohibited charges.

The landlord cannot require the tenant to pay rent by cheque, however the tenant may volunteer to do so.

If both the tenant and landlord agree, the method of payment for rent can be changed at any time.

Are receipts required for rent payments?

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 NSW, the landlord (or agent) is only required by law to provide a receipt when a rent payment is made in person - usually in cash or alternatively by cheque. When the payment is made in person, the receipt must be given at the time of payment. If the payment is by a cheque posted to the landlord, then the landlord must post the receipt to the rented premises or allow the tenant to collect it.

No receipt is required by law 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 required by law for all methods of payment it is prudent practice for landlords and tenants to use them. In the unlikely event that a dispute arises regarding the payment of rent, receipts are the main form of evidence used.

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.

A receipt should include the following details:

  • Name of person receiving the rent
  • Name of person paying the rent
  • Address of the premises the rent is paid for
  • Period rent is paid for and the date up to which the rent is paid
  • Date when the rent is paid
  • Amount of rent paid

Does the landlord need to keep Rental Records?

The landlord is also required to keep a record of rent paid - the form and manner of this record is at the discretion of the landlord, however it must detail the amounts paid and the periods to which those payments relate.

A tenant can request a copy of the rental record for a specific period. The landlord should give the tenant a copy of the requested record within one week.

What are the laws for Rent Increases?

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 NSW, the restrictions vary depending on the nature of the tenancy agreement.

Use the standard Rent Increase Form from NSW Fair Trading to ensure you correctly inform the tenant of the rent increase.

Although not required by law in all tenancy situations it is best practice to provide details any future rent increases in the residential tenancy agreement. This ensures that the parties are aware of that possibility and can be prepared.

How rent may be increased depends on whether the agreement is periodic or for a fixed term:

  • Periodic Agreements - The tenant must be given written notice by the landlord of the rent increase. The notice must detail the amount of the increase and when the increase takes effect. This notice must be given at least 60 days before the rent increase begins.
  • Fixed Term Agreements - The tenant must be given a written notice by the landlord of the rent increase. The notice must detail the amount of the increase and when the increase takes effect. This notice must be given at least 60 days before the rent increase begins. Depending on the length of the fixed term, there are additional requirements for the rent to be increased:
    • Less than 2 years - for a fixed term agreement where the term is less than 2 years, an increase can only occur if the original agreement provides for the increased amount or details a method for calculating the increase.
    • 2 years or longer - for a fixed term agreement where the term is 2 years or longer, there can only be one increase in rent every 12 months.

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

When a fixed term tenancy agreement continues after the term has ended (without signing of a new fixed term agreement) it then becomes a periodic agreement. Therefore, after the end of the fixed term, the rules for periodic agreements apply.

60 Days Written Notice
The requirement of 60 days written notice for any rent increase allows both the tenant and landlord time to discuss and prepare for any increase. Even if the tenancy agreement provides for the increase, the landlord must still give a later notice of at least 60 days. Any increase in rent that does not follow this requirement is not considered valid.

Use the standard Rent Increase Form from NSW Fair Trading to ensure you correctly inform the tenant of the rent increase.

To ensure that this requirement is met, there are a number of things to remember:

  • The notice must be written, but can take many forms - e.g. email, posted letter, text message
  • The notice should very clearly and explicitly state the following:
    • Amount of the increase,
    • When the increase begins, and
    • That the notice states the intention to increase rent.
  • The notice should make the tenant aware of the increase at least 60 days before the increase is scheduled to occur.

Rent increases during a tenancy agreement renewal
If the same tenant and landlord renew a lease for the same property immediately after the end of the original lease the landlord must still give 60 days written notice as described above.

Cancelling or Changing a Rent Increase
The landlord may decide to not increase the rent or to reduce the amount of the increase after giving a notice. If the rent is not increased at all then no change occurs. If the amount of the increase is reduced, then the increase occurs on the date stated in the original notice.

The landlord is not allowed to make a rent increase larger after giving a notice of rent increase.

What are the laws for Rent Decreases?

The rent under a tenancy agreement may also be reduced. In NSW, the tenant and landlord can agree at any time to reduce the rent payable.

In addition, there are two other ways that the rent may be reduced:

1. Reduction in goods, services or facilities provided to premises
The tenant can make a written request to the landlord for a reduction in the rent if the landlord withdraws or reduces any goods, services or facilities that are provided with the premises.

The tenant is allowed to request a reduction in rent because they are no longer being provided with everything bargained for at the original rental rate. The tenant can only make a request when it is the landlord who has caused the reduction or withdrawal of the good/service/facility.

Common examples of where the tenant can request a rent reduction include:

  • When the landlord does not carry out sufficient repairs to the premises
  • The removal of access to a utility such as water or electricity
  • Services such as gardening no longer being provided

2. Premises becomes unusable
The tenant becomes entitled to not pay rent if the whole premises, or part of the premises, becomes unusable for one of three reasons:

  • Premises Uninhabitable - because of something other than a breach of the agreement by the tenant or landlord, whole or part of the premises becomes uninhabitable.
  • Unlawful Residence - the premises cannot be lawfully used anymore as a residence. For example, the premises is rezoned as non-residential.
  • Government Acquisition - the government acquires the premises compulsorily.

Under these rare circumstances, the tenant should inform the landlord as soon as possible.

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 confirm 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.

You might also be interested in

NSW Bonds
NSW Tenancy Agreements
NSW Holding Deposits


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 for your specific circumstances. We do not accept any liability that may arise from the use of this information.