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.
While the tenant can volunteer to pay as much rent in advance as they wish, there are some restrictions on how much landlords can require as rent in advance.
When rent is paid on a weekly or more regular basis, the maximum amount of rent in advance that the landlord can require is 2 weeks.
Example: if the weekly rent is $400 and is paid weekly, then the maximum amount of rent in advance is $800
When rent is paid on a basis less regular than weekly—e.g. fortnightly or monthly—and the weekly rental rate is $350 or less, then the maximum amount of rent in advance that the landlord can require is 1 month.
Example: if the weekly rent is $300 and is paid fortnightly, then the maximum amount of rent in advance is $1,200
When rent is paid on a basis less regular than weekly—e.g. fortnightly or monthly—and the weekly rental rate is more than $350, then there is no maximum amount of rent in advance that the landlord can require.
Example: if the weekly rent is $400 and is paid fortnightly, then the landlord may require $2,000 in rent in advance
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 most popular ways of paying rent in a share accommodation situation are via direct bank deposit/transfer and cash payments
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 Victoria, the tenant must be able to make rent payments without incurring any additional charges or fees—this applies for charges by landlords and third parties. Examples of prohibited charges include transaction fees and service charges imposed for direct deposits by banks.
When rent is paid in cash, the tenant and landlord should include in the agreement where the payment should be made. If no place is listed, then the rent is payable at the rented premises.
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.
Although receipts are not always required by law, asking for and giving receipts regardless of payment method is prudent 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.
In Victoria, the landlord (or agent) is only required to give a receipt when a rent payment is made in person (usually in cash) or if the tenant requests a receipt when making the payment.
Therefore, if payment is made by direct deposit, the tenant should email, text or call the landlord immediately after making the payment to request a receipt. The receipt should be provided immediately when the payment is made in person, or within 5 business days for other payments methods.
Even if a receipt does not need to be given, the landlord should keep a record of all payments made for at least 12 months after each payment. The tenant can request a copy of this record at any time—the tenant should give the record to the tenant within 5 days.
What should be on the Receipt
The receipt (or rental record) should clearly indicate that it is a receipt for rent paid—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:
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 Victoria, the restrictions vary depending on the nature of the tenancy agreement.
Use the standard Rent Increase Form from Consumer Affairs Victoria.
Detailing any future rent increases in the residential tenancy agreement ensures that the parties are aware of that possibility and are prepared
Although it is not necessary for the agreement to include a term allowing a future rent increase in periodic agreements, it is best practice for all parties to be aware to be aware that increases may be necessary
When rent can be increased
Rent can only be increased if the tenant is given at least 60 days written notice. The landlord is allowed to increase the rent only once every 12 months.
As mentioned above, the rent under a fixed term tenancy agreement can only be increased if the agreement allows this.
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 rule for periodic agreements applies 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
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. 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:
The notice can be delivered to the tenant in one of three ways:
- In person
- Mail, accounting for enough time for the letter to be delivered to the recipient
- Electronic communication eg. email, if you have consented to receive notices through this means.
Use the official Victorian Government Notice of Rent Increase form.
Renewing a tenancy agreement
When the same tenant and landlord renew a tenancy for the same property immediately after the end of the original lease, if the rent has increased then the landlord must give 60 days written notice as described above.
If the tenant believes that the rent for the premises has become excessive because of a rent increase, or a reduction/withdrawal of services, facilities or goods by the landlord, then the tenant can apply to the Director of Housing and then VCAT for a reduction in rent. The tenant should use the ‘Request for Repairs Inspection or Rent Assessment’ form. Check out our Resolving Problems page for more information.
Reduction in goods, services or facilities provided to premises
The landlord must be responsible for withdrawing or reducing any goods, services or facilities that are provided with the premises.
Common examples of where the tenant can request a rent reduction include:
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.