2 Starting the Tenancy

This chapter is Contributed by staff of Tenancy WA and current to December 2018.

2.1 Making an application

There are a wide range of factors to consider and issues to check when applying to rent a home. See the Tenancy WA factsheet & checklists for starting a tenancy - particularly the Property checklist and Tenants Checklist insert weblinks

When making an application, most lessors or real estate agents will ask the tenant to fill in an application form. There is no prescribed rental application form, however the lessor/real estate agent may use the standard Form 18 (Application to Rent Residential Premises) available on the Consumer Protection website.

A rental application form may ask for the following:

  • the tenant's name and phone number;
  • the tenant's present and previous address and rental details (including how much rent was paid, the lessor's name and their address and phone number);
  • references from previous lessor(s);
  • the tenant's current employment details (employer name and address, and tenant's income details);
  • contact details for a personal reference (name and phone number);
  • bank details;
  • next of kin (immediate family) name and contact details;
  • how long the tenant would like to rent the premises;
  • the dates the tenant would like to move in and move out of the premises;
  • how many people (adults and children) will be staying at the premises;
  • whether there will be any pets;
  • whether the tenant intends to apply for the Housing Authority Bond Assistance Loan;
  • the tenant's credit history; and
  • an option fee (if applicable).

REIWA's standard 'application to enter into residential tenancy agreement' list the costs of renting the premises, including:

  • rent;
  • rent in advance (maximum 2 weeks' rent);
  • security bond (maximum 4 weeks' rent); and
  • pet bond (if applicable).

The costs listed on the rental application form are the amounts that the tenant agrees to pay if their application is successful. The tenant must check and agree with the costs before signing and lodging the application form. Some application forms require a '100 point identity check' which can include:

  • photo ID for each applicant (driver's licence or passport);
  • written references from previous lessors/agents;
  • proof of last address (last phone bill, gas bill or electricity bill);
  • copy of previous rental receipts (or bank statements if using direct debit to pay rent);
  • copy of last rental agreement; and
  • proof of income (letter of employment or Centrelink statement).

The application form is not part of the tenancy agreement. The relationship between the parties continues to be governed by the Residential Tenancies Act 1987 (WA).

Inspecting the premises

Prior to signing a Residential Tenancy Agreement it is important to inspect the premises thoroughly (inside and out). Once the Residential Tenancy Agreement has been signed, the tenant has accepted the premises as they are (subject to the lessor's obligation to deliver up the premises in a reasonable state of cleanliness and a reasonable state of repair having regard to its age and character).(1) For example, if there is no heater in the premises when the tenant signs the Residential Tenancy Agreement the lessor does not have to provide one.

A number of real estate agents will not allow a tenant to sign the agreement without viewing the premises first.

It is important to mark up the incoming property condition report with any issues with the premises and take lots of photos. These may be used as evidence at the end of the agreement if the lessor claims the tenant has breached the agreement by not delivering up the premises in as close as possible to the same condition as when the tenant moved in, minus fair wear and tear. For further discussion see 2.10.1 (Property condition report).

2.2 Option fees

This section is currently under review by counsel and will be published shortly.

2.3 Upfront costs

The Residential Tenancies Act 1987 (WA) restricts the upfront costs the lessor can claim from the tenant at the commencement of the agreement. The lessor must not claim more than:

There is a potential penalty of $5 000 (per payment) to the lessor for exceeding any of these amounts.(4)

These upfront costs are generally stated in the Residential Tenancy Agreement.

It is important to get a receipt for any money paid in cash. The receipt for a security bond should specify the date on which the bond was received, the name of the person paying the bond, the amount paid and the premises in respect of which it was paid.(5)

2.4 Overview of Residential Tenancy Agreements

Section 3 of the Residential Tenancies Act 1987 (WA) defines a 'residential tenancy agreement' as 'any agreement, whether or not in writing and whether express or implied, under which any person for valuable consideration grants to any other person a right to occupy, whether exclusively or otherwise, any residential premises, or part of residential premises, for the purpose of residence'. This broad definition means that:

  • the agreement may be written or verbal;
  • the agreement may be implied from the conduct of the parties in the absence of any express agreement;
  • valuable consideration may not necessarily be monetary;(6)
  • the right to occupy may be exclusive or non-exclusive; and
  • the agreement may apply to the whole or part of the premises.

Each of these concepts is discussed below.

The Residential Tenancies Act 1987 (WA) regulates the relationship of lessors and tenants under Residential Tenancy Agreements in WA.(7) The rights and responsibilities of the parties are set out in the Residential Tenancies Act 1987 (WA) and apply automatically to all tenancies regardless of whether or not the parties have agreed to them. There may be serious consequences if either party breaches the agreement.

Most renting agreements are covered by the Residential Tenancies Act 1987 (WA), but there are some exceptions (such as boarders and lodgers and holiday agreements). Issues relating to boarding and lodging agreements are discussed at 12.1.10 Boarding and Lodging.

2.5 Written residential tenancy agreements

The Residential Tenancies Act 1987 (WA) does not require a residential tenancy agreement to be in writing.(8) Where a written agreement is used, the Residential Tenancies Act 1987 (WA) imposes specific requirements around form, content and supporting documents to be provided.

A written Residential Tenancy Agreement must be in the prescribed form - Form 1AA for private tenants and Form 1AB for social housing tenants.(9) There is a potential penalty of $5 000 if the lessor does not use the prescribed form.(10)

None of the terms in the prescribed form can be contracted out of, but additional terms can be added. Any additional verbal terms should be included in the written agreement to void future disputes.

A lessor or agent who has required or invited a tenant to sign a residential tenancy agreement must:

  • give the tenant a copy of the document at the time at which it is signed by the tenant; and
  • ensure that a fully executed copy of the document is delivered to the tenant within 14 days after it has been signed and delivered by the tenant, or, where that is not reasonably practicable in the circumstances, within such longer period as is practicable.(11)

The lessor must also give the tenant a copy of Form 1AC (Information for tenant)(12) unless the agreement is being renewed or extended and there has been no change in the parties to the agreement.(13)

The tenant should also be provided with two copies of the incoming property condition report within seven days of entering into occupation of the premises,(14) a receipt for any bond paid and keys to the premises.(15) Further, the tenant must be provided in writing with the full name and address of the lessor (and any person having superior title to the lessor).(16) If the premises are managed by a property manager, they can provide the tenant with the address of the real estate agency instead of the address of the lessor,(17) but must still provide the full name of the lessor.

A tenant requires the full name of the lessor to commence any proceedings under the Residential Tenancies Act, as the contract is between the tenant and lessor, not between the tenant and the real estate agent.

2.5.1 Exemptions: Where Residential Tenancy Agreements are not Required to be in the Prescribed Form

Regulation 5AB of the Residential Tenancies Regulations 1989 (WA) sets out when residential tenancy agreements do not need to be in the prescribed form. These exemptions have been effective since 22 August 2015.(18) Regulation 5AB is set out as follows:

5AB. Exemptions from section 27A of Act -- residential agreements not required to be in prescribed form

Under section 6(a) of the Act it is provided that section 27A of the Act shall not apply to the following --

(a) a residential tenancy agreement in relation to premises to which a housing management agreement applies;

(b) a residential tenancy agreement if --
(i) the Housing Authority is a party to the agreement; and
(ii) the agreement provides that, or is deemed to contain a provision to the effect that, the tenant may sub let the premises; and
(iii) the agreement is entered into by the Housing Authority on the basis that the premises will be sub let;

© a residential tenancy agreement if --
(i) the agreement is renewed or extended; and
(ii) there has been no change to the parties to the agreement; and
(iii) any material changes to the agreement are agreed in writing between the parties to the agreement.

As of 22 August 2015, a new written tenancy agreement is not required where a pre-existing agreement is being renewed or extended between the same parties. Any material changes must be agreed between the parties and confirmed in writing (such as the new start and end dates and any new rent payable).

2.6 Verbal residential tenancy agreements

A Residential Tenancy Agreement can be verbal.(19) A verbal agreement will still be subject to the Residential Tenancies Act 1987 (WA), and the tenant and lessor will continue to have the same rights and obligations under the Residential Tenancies Act 1987 (WA) as they would if the agreement was written. This is in line with s 33(2)(d) of the Property Law Act 1969 (WA) which provides an exemption to the requirement that conveyances of land are void unless made by deed for 'leases or tenancies or other assurances not required by law to be made in writing.'

It is advisable to avoid verbal or partially verbal agreements because they may be hard to prove if the matter ever goes to court.

If a verbal agreement is entered into, the Residential Tenancies Act provides that the lessor must provide the tenant with a Form 1AD (Information for tenant with non-written residential tenancy agreement). This form must be provided to the tenant within 14 days after the tenant has taken possession of the premises.(20) Failure to provide this Form does not invalidate the residential tenancy agreement. Note that this requirement does not apply if the agreement is merely being renewed or extended and there has been no change in the parties to the agreement.(21)

As is the case with a written agreement, the lessor must provide the tenant with two copies of the incoming property condition report within seven days of entering into occupation of the premises,(22) receipt for any bond paid, keys to the premises,(23) and (in writing) the full name of the lessor and the address of the lessor (and any person having superior title to the lessor) or address of the real estate agency if the property is managed by a property manager.(24)

2.6.1 Express or implied verbal agreement?

If the residential tenancy agreement is verbal, it may be either express or implied.

An express verbal periodic tenancy agreement will exist where the parties verbally agree on at least the minimum terms(25) to form a tenancy agreement. That may be for example, by the lessor saying, 'I'll give you a tenancy over 12 Brooke Street from 21 September for $400 paid fortnightly in advance without a set end date (ie a periodic tenancy), with a bond of 4 weeks' rent', and the tenant saying, 'I agree to that.'

See further discussion of these issues below in 2.8 Essential terms.

An implied verbal agreement is one which is implied from the conduct of the parties, in the absence of any express agreement. For discussion of implied tenancy agreements, see below at 2.7 (Implied Residential Tenancy Agreements).

2.7 Implied Residential Tenancy Agreements

2.7.1 The Law

Sometimes the parties do not expressly agree that they are creating a tenancy agreement. A tenancy agreement may nevertheless be implied from the conduct of the parties in the absence of an express agreement.

In order to establish an implied tenancy agreement, it will be necessary to prove that the words or conduct of the parties evince an intention to enter into a residential tenancy agreement.(26)

The District Court of WA in Miller v Brown & Ors states that an objective test is applied to determine whether a Residential Tenancy Agreement is implied:

The existence of an agreement may be implied or inferred even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined: Lighting By Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd (supra) at [90], [204], [205]; Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110. The existence of a contract, and the identification and interpretation of its terms, are all approached on an objective basis. When deciding whether a contract has been made, the courts do not look to what the parties intended, but what they appear to have intended. Uncommunicated subjective beliefs or expectations of the parties are not relevant: Lighting By Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd at [92], [207] and [208].(27)

Factors pointing towards an implied Residential Tenancy Agreement include where the tenant pays rent and stays in possession of the premises in exchange: this 'objectively indicates, and would be understood by any reasonable person to mean' that the parties had agreed to a lease of the premises for a specified rent.(28) While there is no express discussion about a lease agreement or key terms, it may become implied as soon as a few weeks that the person who is paying consideration to stay in the premises is a tenant.

In Miller v Brown & Ors , Davis DCJ of the District Court of WA found that all the elements of a 'residential tenancy agreement' were established for the following reasons:

  1. There was in existence an agreement, implied or inferred, between Mr Miller and each respondent.
  2. By that agreement Mr Miller granted a right to each respondent.
  3. The grant was for valuable consideration, in that rent was charged for that right.
  4. The nature of the right was a right of occupation of the land or part of it, referrable to each lot number.
  5. What was being occupied is premises, being the residence owned by each respondent and the land owned by Mr Miller, taken together.
  6. The nature of the premises is residential premises or part of residential premises, occupied for the purpose of a residence.(29)

According to Anforth, Christensen and Bentwood 'the parties must have implicitly agreed on the essential terms of the residential tenancy agreement, including the identity of the parties, the identity of the premises, the term of the tenancy and the rent'.(30)

The ACT Civil & Administrative Tribunal in Commissioner for Social Housing v Ryan (Residential Tenancies)(31) cites case law providing useful indicators of the factors to be taken into account when determining if an implied tenancy has arisen. The relevant excerpt is set out as follows:

92. As to when an implied tenancy arises, the considerations in Moffatt at first instance, and those of Senior Member Lennard in Pesi, are useful indicators of the factors to be considered. As Member Daniel observed in Moffat:

While it may not have been the subjective intention of either party to create a new residential tenancy agreement, it is an objective test which must be applied to the acts of the parties when determining whether an agreement is implied.

93. The conduct of the lessor in conducting inspections, calculating rental rebate, the effluxion of time, writing letters offering support to the tenant, referring the tenant [sic] the tenancy support services, accepting rents and approaching the tenant with regard to her rental arrears are, for the reasons set out in Pesi, all factors to be taken into account in determining the implied tenancy has arisen between the parties.

2.7.2 Case Examples of Implied Tenancies

In Social Housing v Moffatt , the ACT Civil & Administrative Tribunal (ACAT) found an implied tenancy as a result of the conduct of the parties over a prolonged period of time.(32) In this case, the tenant failed to make arrears payments required by a conditional termination and possession order. During the period of almost 12 months following termination, the parties continued to act as though there was a Residential Tenancy Agreement in place. The lessor (in this case, the Commissioner for Social Housing) 'knowingly allowed' the tenant to occupy the premises and the tenant paid rent (which was 'actively invited' by the lessor).(33) The lessor charged market rent, granted the tenant a rebate, processed Centrepay deduction forms and corresponded with the tenant 'in terms that asserted the existence of a residential tenancy agreement and exercised the right of a lessor to inspect the premises.'(34) ACAT noted the test as being an objective one: 'While it may not have been the subjective intention of either party to create a new residential tenancy agreement, it is an objective test which must be applied to the acts of the parties when determining whether an agreement is implied.'(35)

In Commissioner for Social Housing v Pesi , ACAT found an implied tenancy arose from the conduct of the parties, having regard to the amount of time that had passed since the tenancy terminated and the conduct of the parties (including, but not limited to):

(a) correspondence between the parties;

(b) the demanding of rent;

© the payment of rent;

(d) the exercise by the lessor of rights arising under a residential tenancy agreement, such as routine inspections, or market rent increases;

(e) the meeting by the lessor of obligations, such as repairs to the premises; and

(f) the calculation of a rental rebate.(36)

In Commissioner for Social Housing v Game, ACAT followed Moffatt in finding an implied tenancy based on the objective conduct of the parties. The facts were similar to Moffatt in that the tenant failed to make arrears payments required by a conditional termination and possession order. Following Pesi, ACAT noted the following:

[The lessor] conducting inspections, calculating rental rebate, the effluxion of time, writing letters of support to the tenant, referring the tenant to tenancy support services, accepting rents and approaching the tenant with regards to her rental arrears are…all factors taken into account in determining that an implied tenancy has arisen between the parties.'(37)

In Johnstone v Housing Authority, the District Court of WA found no implied tenancy where the tenant's son started living at the premises after the tenant decided that she did not want to live there anymore because the driveway was too steep for her given she had a hip problem. The tenant's son contended that he had an implied tenancy by way of occupation and payment of rent.(38) The Court dismissed the appeal on the grounds that the son was never in a tenancy and any licence he had to reside at the premises expired when his mother's tenancy agreement ended.(39) Further, there was no intention to create a tenancy between the tenant and the Housing Authority.(40) When the tenancy was terminated, the tenant's son became a trespasser as the tenant had no right to occupy the premises or grant a licence to her son to remain in occupation of the premises.(41)

In Dodson v CityView Property Investments Pty Ltd (Residential Tenancies),(42) the Victorian Civil and Administrative Tribunal found an implied tenancy where the fixed-term agreement was in the name of the male tenant only, but the female tenant in a relationship with him also lived there with her children. The fixed-term agreement expired and became a periodic tenancy agreement. The female tenant then took out an intervention order and the male tenant left and terminated the tenancy by agreement with the lessor on 20 November 2016 (the lessor was a company under the control of the male tenant's parents). On 6 December 2016, the lessor's lawyer sent a letter purporting to give the female tenant 60 days' notice to vacate.(43) The female tenant had always paid the rent and had the discussions with the lessor about the condition of the premises. The lessor had continued to accept rent from the female tenant after the male tenant had left the premises - while this only continued for a period of 17 days, an implied tenancy was nonetheless found.

Magistrates Court decisions are not reported in Western Australia. In a 2015 decision by Chief Magistrate Heath, the Court held that an implied tenancy agreement existed in a case where the Housing Authority had obtained a termination order, but then allowed the tenant to remain in occupation and continued to pay rent some months. The Housing Authority then sought to enforce the earlier termination order. The tenant successfully applied for an order to suspend enforcement of the termination order, on the basis that the tenant had a right to reside at the premises under a new implied tenancy.

For further case examples of implied residential tenancy agreements, see discussion in Anforth, Christensen and Bentwood at [2.13.7].(44)

2.8 Essential Terms

For a concluded residential tenancy agreement to exist the parties must have agreed on at least the following essential terms:

  • Premises - what is the address of the rental premises? Are the premises let for residential or business use (or a combination of the two)?
  • Rent - what will the tenant give the lessor in return for the right to live in the premises?
  • Commencement date - what date does the agreement begin?
  • Duration - How long does the agreement run for? Is it for a fixed period or ongoing?

Each of these is discussed in more detail below.

2.8.1 Residential Premises

2.8.1.1 Definition of Residential Premises

Section 3 of the Residential Tenancies Act 1987 (WA) defines 'residential premises' as 'premises that constitute or are intended to constitute a place of residence'. Section 3 of the Residential Tenancies Act 1987 (WA) also defines 'premises' as including 'any part of premises; and land and appurtenances appurtenant to premises'. While this definition indicates what 'premises' includes, it does not indicate what 'premises' actually are. Therefore it is necessary to look to the ordinary meaning of the term.

'Premises' is defined in the Macquarie Dictionary as 'a house or building with the grounds, etc., belonging to it.'(45) The New Shorter Oxford English Dictionary provides a nearly identical definition as '[a] house or building with its grounds etc. Also, (a part of) a building housing a business etc.'(46) Butterworths Concise Australian Legal Dictionary uses a similar definition as '[b]uildings, self-contained apartments, or rooms within buildings or land.'(47) Therefore, the essence of the ordinary meaning of 'premises' is that it includes both the building and the land on which it stands - this is also evident from the definition of 'premises' in the Residential Tenancies Act 1987 (WA) as including 'land and appurtenances appurtenant to premises'.(48)

Similar to the ordinary meaning of the word, the common law requires 'premises' to include a building of some sort - there cannot be a residential tenancy agreement over bare or vacant land.(49) If however, the land is let with the intention that the tenant can erect non-removable buildings that become part of the land, then 'the land and building when erected would form premises.'(50) There can also not be premises if the structure is a ruin that is too dilapidated for use.(51)

The term 'premises' is qualified by the term 'residential', therefore it is important to determine the meaning of this word too. The Macquarie Dictionary defines 'residential' as of or relating to residence or residences.'(52) 'Residence' is defined as 'the place, especially the house, in which one resides; dwelling place; dwelling.'(53) The New Shorter Oxford English Dictionary defines 'residential' as '1a Serving or used as a residence. M17. b Suitable for or characterised by private houses L19. 2 Connected with, entailing, or based on residence.'(54) The term 'residence' is defined as '[t]he circumstance or fact of having one's permanent or usual abode in or at a certain place; the fact of residing or being resident.'(55)

The Supreme Court of WA in Hamersley Iron Pty Ltd v Roberts & Anor(56) takes 'residence in its ordinary sense of a place where a person sleeps, finds shelter and has his home', and it follows that 'a corporation cannot have a residence in that sense'. However Commissioner Wheeler goes on to hold that "In my view, there must be a right granted to a person to occupy premises, and the purpose of the occupation must be that of residence, but it does not follow that the residence must be the residence of the person to whom the right to occupy is granted. The natural reading of the definition does not suggest such a requirement, and the policy of the Act would seem to favour a broad interpretation. It follows from that that there is nothing to preclude a corporation from being regarded as a "person" for the purposes of the definition." Importantly this case holds that people who have sub-tenancy agreements from their corporate employers will still have the benefit of protection under the Residential Tenancies Act.

Anforth, Christensen and Bentwood look at the common law meaning of 'dwelling house' to assist in construing the meaning of the term 'residence'.(57)

The New South Wales Land and Environment Court in Dobrohotoff v Bennic sets out the following definition of 'dwelling':

The definition of "dwelling" has two limbs. The first concerns the actual occupation or use of a room or rooms as a separate domicile and the second deals with the hypothetical test of whether a room or rooms are "so constructed or adapted as to be capable of being occupied or used" as a separate domicile (Leichhardt Municipal Council v Mansfield (1985) 57 LGRA 214 at 221; Warringah Shire Council v Jennings Group Ltd (1992) 75 LGRA 402 at 407; Wollongong City Council v Vic Vellar Nominees Pty Ltd [2010] NSWLEC 266; (2010) 178 LGERA 445 at [28] and Wollondilly Shire Council v 820 Cawdor Road Pty Ltd [2012] NSWLEC 71 at [19]).

The NSW Court of Appeal in Roberts v Waverley Municipal Council and Others(58) held that the for the purposes of the Landlord and Tenant Act 1899 (NSW) the term 'dwelling house' should be given a wide meaning and includes any building or part of a building used as the place of abode of one or more persons.

2.8.1.2 What is included in the 'Premises'

The agreement may be for the whole or part of the premises.(59)

Under the Residential Tenancies Act 1987 (WA), 'premises includes - (a) any part of premises; and (b) land and appurtenances appurtenant to premises'.(60)

'Appurtenances' are '[t]hings that belong to an estate in land, that are used for the benefit of land; for example houses and other buildings, watercourses, gardens, and easements'.(61)

The prescribed form residential tenancy agreements require the parties to state the address of the premises and any 'additional matters, such as parking space or furniture provided, or any exclusions, such as sheds'.(62) If a part of the premises is not specifically excluded in the agreement, then it will form part of the rented premises. So the lessor who rents out a property with a shed cannot continue to use it to store his own goods in unless the shed is excluded from the agreement. And the same goes for any part of the premises.

2.8.1.3 Commercial and Business Use of Premises

The Residential Tenancies Act 1987 (WA) only applies to premises 'that constitute or are intended to constitute a place of residence'.(63) It does not apply to premises let for a commercial or business purpose. Most retail shop leases are covered by the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). Issues arise where premises are let for both residential and business purposes, such as where the tenant will be running a business from home. In WA, the Residential Tenancies Act 1987 (WA) does not specify when it will continue to apply even if the premises are also let for a business purpose.

In NSW, s 7(h) of the Residential Tenancies Act 2010 (NSW) specifically excludes 'premises used for residential purposes, if the predominant use of the premises is for the purposes of a trade, profession, business or agriculture.' The same 'predominant use' test was applied under regulation 21 of the now repealed Residential Tenancies (Residential Premises) Regulations 1995 (NSW).

The situation in NSW prior to the passing of regulation 21 was that 'the lease was caught by the Residential Tenancies Act 1987 if it granted a right of residence even if residency was not the sole or dominant purpose of the lease'.(64) In WA it is unclear what the position is, but it seems that the only persuasive (albeit non-binding) authority is to the effect that, as long as one purpose (whether it is the main or dominant purpose or not) of the Residential Tenancy Agreement is residency, the Residential Tenancies Act 1987 (WA) will apply.(65)

2.8.2 Rent

Under the Residential Tenancies Act 1987 (WA) 'rent means a payment under a residential tenancy agreement payable by the tenant in respect of a period of the tenancy'.(66)

The prescribed Form 1AA (and Form 1AB) requires the parties to indicate the amount of rent, whether it is payable weekly or fortnightly and the start date the payments will commence. If the rent is calculated by reference to the tenant's income, the relevant calculation must be set out. The method of payment (cash, cheque, into a bank account or another method) must also be set out.

For further discussion of rent, see 3.1 (Rent).

In the case of Housing Authority premises, the tenant must pay either 25% of the household income as rent or market rent for the premises. If 25% of the household income is more than market rent, then the market rent must be paid.(67) For further discussion of the Housing Authority's rent to income policy, including assessing income and documentation required, see the Housing Authority Rental Policy Manual(68) and the discussion at Chapter 6 Social Housing.

2.8.3 Commencement Date

The start date of the agreement must be noted on the prescribed Form 1AA. The start date should not be a date prior to the date on which the tenant is entitled to enter into occupation of the premises.(69)

2.8.4 Duration

The parties must indicate on the prescribed Form 1AA or 1AB whether the agreement is periodic or for a fixed term.

If the agreement is periodic, the date on which the tenancy starts must be stated.

If the agreement is for a fixed term, the start and end date must be stated. Fixed-term agreements are quite often for a period of 12 months, however, any other duration is acceptable as long as this is listed on the Residential Tenancy Agreement. If the agreement is for less than 90 days, however, the lessor will not be able to terminate by notice of termination at the end of the term unless the court is satisfied:

(i) that the lessor genuinely proposed, at the time that the lessor entered into the agreement, to use the premises after the expiration of the term for purposes inconsistent with the tenant continuing to occupy the premises; or
(ii) that tenant of the tenant's own initiative had sought a tenancy of a term of less than 90 days.(70)

Fixed term agreements do not terminate automatically at the end of the term: If a fixed-term agreement is not terminated before the expiry day, it continues as a periodic tenancy after the expiry day on the same terms that applied immediately before the expiry day.(71) This will occur automatically. If necessary, the tenant or the lessor can apply to the Court for an order that the terms of the agreement are modified to the extent necessary or appropriate for the continuance of the agreement.(72)

If there is no written agreement the tenancy will be periodic unless a set end date has been verbally agreed upon.

2.9 When a Residential Tenancy Agreement comes into existence (concluding a Residential Tenancy Agreement/When a Residential Tenancy Agreement becomes binding)

2.9.1 Finality of Agreement

There must be a concluded agreement between the parties as per normal contractual principles, namely:

  • offer and acceptance;
  • intention to enter into legal relations;
  • consideration; and
  • sufficient certainty on the essential terms of the agreement (parties, premises, rent, commencement date and duration).

Discussion of each of the elements of formation of a contract is beyond the scope of this publication. For a full discussion of the issues, refer to Jeannie Marie Paterson, Andrew Robertson and Arlen Duke, Principles of Contract Law (Thomson Reuters, 2nd ed, 2012) Part II (Formation).

If the lessor or property manager fails to execute (sign) and deliver a copy of the Residential Tenancy Agreement to the tenant after it has been signed by the tenant, acceptance of rent by the lessor or property manager will give the Residential Tenancy Agreement the same effect as if it had been fully executed.(73)

The agreement must be final. The agreement may be final even if the parties have not yet drawn up a formal contract, but intend to do so later, so long as they have agreed on at least the minimum terms (see 2.8. Essential Terms) and intend to be immediately bound by them. On the other hand, an agreement will usually not be final if the parties make an agreement which is expressed to be 'subject to contract'.(74)

2.9.2 REIWA Standard Residential Tenancy Agreement - Requirements for Existence of Lease

The REIWA standard Residential Tenancy Agreement, Part C contains the following clause setting out the requirements for a lease to be concluded if the parties have signed this particular agreement:

1. REQUIREMENTS FOR EXISTENCE OF LEASE


1.1. The parties agree that there will be no binding agreement to lease the Premises and no residential tenancy agreement will have come into existence, under the Residential Tenancies Act, 1987 (Act) or otherwise, unless and until the following pre-requisites have been met:

(a) By no later than 4.00 pm on _______, or such later time as agreed to by the lessor's property manager: [*strike out whatever subparagraphs do not apply]
(i)* this residential tenancy agreement is signed by the tenant(s) and returned by the tenant to the lessor's property manager at the physical address or email address appearing in this lease;
(ii)* any security bond and any pet bond required to be paid by the tenant pursuant to Part A of this residential tenancy agreement on the signing of the residential tenancy agreement are paid to the lessor's property manager; and
(iii)* any first payment of rent required to be paid by the tenant pursuant to Part A of this residential tenancy agreement on or before the signing of the residential tenancy agreement is paid in accordance with Part A;

and

(b) The residential tenancy agreement is signed by the lessor or the property manager (PROVIDED THAT if the tenant has been granted an option to enter the lease and paid an option fee, there shall be no need for the agreement to be signed by the lessor or property manager in order for a binding agreement to exist and this pre-requisite (b) shall not apply).

Note: Under the Residential Tenancy Act 1987 agreement to lease do not have to be in writing and may be entered verbally or by conduct. This clause 1 does not purport to remove the right of the parties to reach non-written agreements. However, if the parties wish to enter into an agreement on the terms set out in this form, the pre-requisites set out above must be met in order for the lease to exist.

Where subparagraph 1.1(a)(i) applies (i.e. it has not been struck through), the parties have agreed that they will only enter into a binding agreement upon signing the residential tenancy agreement. That is to say, their agreement is 'subject to contract'.

Paragraph 1.1(b) provides that the Residential Tenancy Agreement will not come into existence until it has been signed by the lessor (or the property manager). However this requirement is inconsistent with s 54 of the Residential Tenancies Act 1987 (WA) which states that acceptance of rent by the lessor or property manager without reservation has the same effect as if the agreement had been signed by both parties. Therefore, in circumstances where the lessor has accepted rent (without reservation), the clause is arguably void under s 82 of the Residential Tenancies Act 1987 (WA) for contracting out.

2.9.3 Does the Tenant need to take Actual Possession for a Residential Tenancy Agreement to come into Effect?

No. The tenancy agreement takes effect from the start date fixed by the agreement whether or not the tenant has moved into the premises.(75)

2.10 Valuable consideration in return for right to occupy

For a residential tenancy agreement to exist, the tenant must pay 'valuable consideration' in return for the right to occupy the premises.(76)

Under the common law of contract, 'valuable consideration' must be 'sufficient' for the promise for which it is given.(77) This means that 'consideration must be something the law regards as valuable', but does not necessarily need to be adequate or proportionate to the promise.(78) It has been recognised that a 'single peppercorn' may constitute valuable consideration, and there is binding WA Supreme Court authority to this effect.(79) A 'peppercorn rent' is defined as a nominal amount of rent that does not reflect market value: 'It is a true rent but is not regarded as a rent in kind, so that it cannot be classified as a payment or as needing a receipt.'(80)

2.11 Other matters relevant to starting a tenancy

2.11.1 Property Condition Report

A property condition report (PCR) is a report that describes the condition of the rented premises when the tenant moves in and out. From 1 July 2013 PCRs are compulsory when entering and ending a tenancy agreement.

For a discussion of outgoing PCRs, see 4.7.2 (Final inspection and property condition report).

A PCR is a prescribed form (must be used) and can be found in Schedule 4 (Form 1) of the Residential Tenancies Regulations 1989 (WA) and on the Consumer Protection website. Any PCR should include the same items that are listed in the Residential Tenancies Regulations 1989 (WA) and on the Consumer Protection form. Other items may also be added.(81)

2.11.1.1 Why is an Incoming Property Condition Report Important?

The incoming PCR outlines the condition of the premises at the beginning of the tenancy.

When a tenancy ends, the PCR will be used as evidence if there is a dispute between the tenant and the lessor about maintenance and repairs or about return of the bond.

The PCR can be compared directly with inspection reports and the outgoing PCR. This will help avoid or minimise potential conflicts between the tenant and the lessor.

2.11.1.2 What are the Time Limits for Receiving and Returning an Incoming Property Condition Report?

The lessor must give the tenant two copies of the incoming PCR within seven days after the tenant has entered into occupation of the premises. There is a potential penalty of $5 000 for failure to do so.(82)

The tenant is required to return a copy of the report to the lessor within seven days of receiving it, marking both copies with any discrepancies and keeping a copy for themselves.(83)

If the tenant does not give a copy of the amended PCR back to the lessor within seven days, the tenant is taken to accept the report given to the tenant as a true and accurate description of the condition of the premises.(84)

It is important for the tenant to check the report carefully and change anything the tenant disagrees with. Even where the incoming report notes existing damage or lack of cleanliness, it is nevertheless advisable to clearly and fully document and photograph it so that disputes cannot arise later over its nature and extent. Clear photos of the relevant areas of concern should be taken and copies of them attached to the PCR.

2.11.1.3 What if the Tenant does not Receive an Incoming Property Condition Report?

The tenant should contact the lessor if they have not received two copies of the incoming PCR within seven days of entering into occupation of the premises.

If the lessor refuses or ignores the request, contact Consumer Protection for assistance.

2.11.1.4 Tips for Completing a Property Condition Report

  • Conduct the inspection with an independent witness. This can be any adult who will not be (or has not been) living at the premises and would be prepared to act as a witness.
  • Both the tenant and the witness should sign and date the PCR.
  • Remember to include the outside of the premises, including yards (back, front and side), sheds, garages, letterbox, driveway and gutters.
  • Make any necessary amendments to the PCR and attach supporting photographs.
  • Return one copy of the PCR to the lessor within seven days of receiving it.
  • Keep one copy of the updated PCR and photos on record.

Taking clear and detailed photographs at the beginning and end of the tenancy is important to document the condition of the premises. Particular care should be taken to obtain clear photographs of any areas which may become the subject of disputes at the end of the tenancy, including for example:
  • walls, skirting boards, doors, floors, windows, flyscreens, countertops or ceilings which are marked, dirty or damaged in any way;
  • cracks, chips, holes and peeling paint;
  • scratches in woodwork, especially polished floorboards;
  • any driveway or garage floor which is stained or marked in any way;
  • dirty, dusty or cobweb-affected areas;
  • dirt, grime or limescale buildup in a shower recess;
  • water stains and mould;
  • dirt or grease build up in or on the oven or any other kitchen appliances supplied;
  • problems with hot water, stove, locks, doors and windows;
  • signs of mice, cockroaches, fleas or other pests/vermin;
  • torn or deteriorated flywire;
  • broken light fittings or blown light globes;
  • dripping taps;
  • the garden, showing clearly how many weeds there are, the state of any lawn and /or other plants; and
  • broken reticulation.

2.11.2 Security Bond

A security bond is a deposit given by the tenant to the lessor at the beginning of the tenancy. At the end of the tenancy, if there has been any damage to the premises, unpaid rent or water bills, the lessor can keep the bond (or part of the bond) to pay these costs.

2.11.2.1 How Much is the Bond?

Generally, the bond can only be a maximum of four weeks' rent under the agreement.(85)]]

There are two exceptions to this - (1) if the weekly rent is above $1200;(86) or (2) if there is a pet bond.(87)

The lessor is not entitled to claim more than one security bond in relation to each Residential Tenancy Agreement.(88)

The bond can be received in instalments.(89) Where a bond is paid in instalments the lessor must give a receipt for each instalment(90) unless the lessor is the Housing Authority.(91)

2.11.2.2 Pet Bond

The lessor is entitled to request an additional amount of security bond if the tenant is permitted to keep on the premises any pet capable of carrying parasites that can affect humans.(92)

For further discussion, see 4.7.4 (Pet bond).

2.11.2.3 Paying the Bond

The prescribed Form 1AA and 1AB states that the tenant must pay the bond, if any is required, 'on signing this agreement.' This is not a requirement under the Residential Tenancies Act 1987 (WA) itself,(93) however a written Residential Tenancy Agreement must be in the prescribed form. In the case of a written agreement, therefore, it is a requirement that the bond must be paid on signing.(94)If the tenant fails to pay the bond on signing, the tenant will be in breach of the agreement and the lessor can apply to court for a specific performance order that the tenant pay the bond. For further discussion, see 4.3.2 (Termination by the lessor for breach by the tenant).

Once the tenant pays the bond, the lessor must provide a bond receipt to the tenant immediately. The receipt must state:

  • the date on which the bond was received;
  • the name of the person paying the bond;
  • the amount paid; and
  • the address of the rental premises.(95)

2.11.2.4 Lodging the Bond

For all tenancies entered into on or after 1 July 2013, the lessor must lodge the bond with the Bond Administrator (Consumer Protection).(96) At the same time, the lessor must also lodge a record in a form approved by the Minister relating to the payment.(97) It is an offence (subject to a $5 000 fine) to make an entry in the record that the person knows is false or misleading in a material particular.(98) The bond must be lodged 'as soon as practicable, and in any event within 14 days' after the lessor receives the bond.(99) From 1 September 2016, if the property is managed by a real estate agent or property manager, they are required to lodge the bond as an eTransaction via the BondsOnline system unless one of the following applies:(100)

(a) the tenant does not have one or more of the following --
(i) a mobile telephone number used exclusively by the tenant;
(ii) an email address used exclusively by the tenant;
(iii) internet access to check their email account;
(iv) competence in the use of a mobile telephone or email;
(v) a sound understanding of the English language;

or

(b) the payment is made by way of the transfer of a security bond from one property to another property; or

© the bond administrator or an authorised agent has approved the making of the payment in accordance with subclause 2(a).

Once lodged, the Bond Administrator will then send the tenant a record of bond payment. If the tenant does not receive this within a month of entering into the tenancy, they should ask the Bond Administrator if their bond has been lodged.

If the tenancy started prior to 1 July 2013, the lessor had until 1 December 2014 to transfer the bond to the Bond Administrator.

If the lessor does not lodge the bond with the Bond Administrator, they are committing an offence and could be fined up to $20 000.(101)

Lessors who refuse to lodge the bond in accordance with the Residential Tenancies Act 1987 (WA) may be reported to Consumer Protection.

2.11.2.5 Security Bonds Held in Authorised Financial Institution

Prior to 1 July 2013, bonds could be deposited with an authorised financial institution (AFI).

AFI means an ADI (authorised deposit taking institution) as defined in the Banking Act 1959 (Commonwealth) section 5; or a State, Territory or Commonwealth Bank; or any other prescribed body (or a body belonging to a class of prescribed bodies) under Schedule 1 Clause 1 of the Residential Tenancies Act 1987 (WA) in force immediately before 1 July 2013.(102)

After 1 July 2013, all existing security bonds held in an AFI were required to be transferred to the Bond Administrator. Lessors were required to take all reasonable steps to do so as soon as practicable after renewal of the lease agreement, or in any other case, not later than 18 months after 1 July 2013 (unless the lessor is the Housing Authority, in which case the time period is seven years).(103) There is a potential penalty of $5 000 for failing to do so. The bond was to be paid either to the tenant or to the Bond Administrator. If the bond was paid to the Bond Administrator, section 29(4)(b) and c) apply (with all necessary changes).(104)

2.11.2.6 Assistance Paying the Bond

The Housing Authority can provide a Bond Assistance Loan (BAL) for private rental premises. There are eligibility requirements for receiving a BAL, and it is important to see the Housing Authority Bond Assistance Loan Policy for further information.(105)

2.11.2.7 Bond in Housing Authority Premises

If the tenant is renting from the Housing Authority, tenancies that commenced after 1 July 2013 do not automatically require a bond. However, the Housing Authority can charge a bond equal to four weeks' rent if they judge this to be necessary. The bond can be paid in instalments. Generally the Housing Authority does not charge bonds for new tenancies.

Tenants who occupied Housing Authority premises before 1 July 2013 will be required to pay a minimum bond accrual repayment of $5 per week from the date the tenancy commenced.(106)

The Housing Authority is currently exempt from lodging bonds for tenancies which commenced before July 2013 with the Bond Administrator - the bond will instead be held by Housing Authority.(107)

2.11.2.8 Variation of the Bond

A security bond may need to be varied for one of the following reasons:

  • a valid rent increase has occurred;
  • one or more of the tenants in a shared household has decided to move out;
  • the ownership of the premises has changed; or
  • the lessor has employed a different real estate agent.

A Variation of Security Bond Form must be filled out and lodged with the Bond Administrator. From 1 September 2016, if the property is managed by a real estate agent or property manager, they are required to make any changes to the bond via the BondsOnline system as an eTransaction.(108)

Rent increase: If the rent has been validly increased under s 30 or 31A of the Residential Tenancies Act 1987 (WA), the bond can be increased to a maximum of four weeks' rent by notice in writing to the tenant specifying the amount of the increase and the day on which it is payable.(109) The notice must give not less than 60 days before the increase becomes effective.(110) The notice must not be given within the first six months of the tenancy or within six months of the last time the bond was increased.(111)

Rent decrease: If the rent is decreased during the first six months of the tenancy commencing, the amount paid in excess of the lower (or lowest) rent payable under the agreement (plus the pet bond, if any), is deemed to have been paid as the bond.(112)

Co-tenant moves out: If a co-tenant in a share house decides to move out, the tenant can see if the other co-tenants, or any incoming co-tenants taking over the outgoing tenant's portion of the lease, can pay the tenant out their portion of the bond and then complete a Variation of Security Bond form. It is important not to sign the Variation of Security Bond form until the incoming co-tenant has paid the tenant their portion of the bond, or the parties have reached a written agreement to refund the portion of the bond to the outgoing co-tenant. Note that there is no requirement for parties to agree to refund the outgoing co-tenant their portion of the bond, and they may not agree because they do not know what amount (if any) the lessor will attempt to deduct from the bond at the end of the tenancy. If no agreement can be reached, the tenant will need to wait until the end of the tenancy, and either have the lessor dispose of the bond or apply to the Magistrates Court for the full bond.

If a tenant relinquishes their right to the bond, and submits a Variation of Security Bond form to the Bond Administrator, the tenant is not required to sign the Bond Disposal form at the end of the tenancy. The bond will be disposed between the tenants who remain listed with the Bond Administrator and the lessor.

2.11.3 Vacant Possession

2.11.3.1 The Law

The lessor must ensure that the tenant has vacant possession of the premises on the day on which the tenant is entitled to enter into occupation under the Residential Tenancy Agreement.(113) This is a question of fact(114) and will depend upon the particular context in each matter.(115) A breach could occur where the lessor leaves rubbish,(116) building waste, furniture or other possessions in the premises (unless the premises is rented out as furnished or the parties agree for the items to be left on the premises).

The test applied in Australia is taken from the judgment of Lord Greene MR of the English Court of Appeal in Cumberland Consolidated Holdings Ltd v Ireland (1946) 1 KB 264:

Subject to the rule de minimis a vendor who leaves property of his own on the premises on completion cannot…be said to give vacant possession, since by doing so he is claiming a right to use the premises for his own purposes, namely, as a place of deposit for his own goods inconsistent with the right which the purchaser has on completion to undisturbed enjoyment…It must be an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property'.(117)

In simple terms, a substantial physical impediment to enjoyment of the premises is likely to constitute a failure to deliver up vacant possession.(118)

This obligation does not include any part of the premises of which the tenant does not have a right of exclusive occupation, or any part of the premises that the parties have agreed that the tenant will not have access.(119) An example of this could be where a shed is used to store the lessor's belongings and this is listed as excluded under the Residential Tenancy Agreement.

If the lessor does not provide vacant possession of the premises, the tenant may have a claim for a specific performance order and/or compensation/rent reduction for the inconvenience of having to remove the lessor's belongings, or for not being able to move in at all.

Limitation period: The tenant has six years to commence proceeding for breach of agreement, running from the date the lessor failed to deliver up vacant possession on the commencement date of the Residential Tenancy Agreement.

If the tenant wants to commence proceedings against the lessor, the tenant will need to bring evidence of loss caused by the lessor's breach, such as receipts for a hotel and/or storage units if the tenant was unable to move into the premises, and evidence of rental payments the tenant made while not living in the premises. It is ultimately up to a Magistrate to decide whether the tenant should be entitled to compensation, and there is a risk that the Magistrate could find that it was in fact reasonable for the tenant to move into the premises despite the lessor failing to deliver up vacant possession.

2.11.3.2 Case Examples on Vacant Possession

In Tsang v Agar(120) the NSW Civil and Administrative Tribunal (NSWCATCD) held that the lessor failed to deliver up vacant possession of the premises. The premises were unfit for purpose and unliveable from the commencement of the agreement due to a heavy pest infestation (cockroaches, wasps and other insects), the presence of rubbish and some of the lessor's furniture, the shed being full of the lessor's possession, fence and flyscreens not repaired and the sunroom roof leaking. This meant that the tenant was unable to move in on the commencement date. The Tribunal found that the tenant was entitled to terminate the fixed term without penalty and payment of break lease costs. The tenant was also entitled to receive a refund of all monies paid to the lessor (full bond and rent).

Similarly, in Strachan v Gabriel(121)the NSWCATCD found that the presence of the lessor's belongings stored in the shed impeded the tenant's right to vacant possession of the premises. The tenant was entitled to terminate the fixed term without penalty and payment of break lease costs. The tenant was also entitled to a refund of all monies paid to the lessor (full bond and rent).

2.11.4 Premises to be Delivered in a Reasonable State of Cleanliness

The lessor 'must deliver up to the tenant vacant possession of the premises in a reasonable state of cleanliness and a reasonable state of repair having regard to its age and character'.(122)

This obligation on the lessor exists regardless of whether or not the tenant has notified the lessor that the premises are not reasonably clean. This differs from the lessor's obligation to maintain the premises in a reasonable state of repair during the tenancy which depends on the tenant notifying the lessor of the need for repair before the lessor is required to do anything.

For further discussion of the lessor's duty to deliver up premises in a reasonable state of cleanliness and repair see 3.2.1.1 [General duty to repair (s 42)].

2.11.5 Premises to be Delivered in a Reasonable State of Repair

See 2.11.4 above.

The lessor must ensure that there is no legal impediment to the tenant occupying the premises for the term of the agreement. The lessor will be in breach of agreement if, at the time of entering into the agreement, the lessor had or ought reasonably to have had knowledge of such legal impediment.(123) The lessor must take all reasonable steps to ensure that, at the time of signing the agreement, there is no legal reason why the tenant cannot occupy the premises.(124) This standard of 'reasonableness' means that even if the premises are illegal under other statutes, the lessor may not be in breach of the Residential Tenancies Act 1987 (WA) if they have taken the necessary 'reasonable steps'.

Examples of legal impediments to occupation as a residence include:
  • where the premises are zoned for commercial or industrial use only and they are nevertheless rented out for residential purposes;(125)
  • where the lessor does not have title to the premises;
  • lack of approval for human occupation;
  • breach of health and safety legislation;
  • breach of legislation affecting land title (eg where the land has been resumed by the government for development);(126)
  • unapproved garages, granny flats or warehouse renovations;(127) and
  • where there is already another person living in the premises: eg the premises are advertised as one dwelling, but is actually split into two dwellings and there is no council approval for this conversion.(128)

In Bangura & Fan, the ACT Civil & Administrative Tribunal stated:

A lessor cannot purport to grant a tenancy or contractual licence in circumstances that would be contrary to the criminal and civil law…A contract that is contrary to law in the sense that it calls for performance that would be unlawful, is void ab initio…Purported tenancy agreements frequently arise in respect of premises for which human occupation has not been approved by the relevant regulatory authority. Generally, the relevant law makes it an offence for people to reside in such premises, and for anyone to purpose to lease such premises for occupation.(129)

It appears that 'legal impediment' is restricted to whether or not the premises can be used for residential purposes, and not whether the premises themselves are unlawful. The ACT Civil & Administrative Tribunal in Mansour v Dangar (Appeal) states that '[t]he question is not whether the premises can be used as a separate or second dwelling, but whether the premises "can be used for residential purposes."'(130)

Industrial Zoning

In Van Loon & Leeder v Maloney (Tenancy)(131) the parties entered into a residential tenancy agreement for premises in an industrial zone. One area of the building was zoned residential as either a caretaker's cottage or manager's residence, and the rest of the building were zoned industrial. Residential premises were not permitted under the Environmental Planning and Assessment Act 1979 (NSW). This meant that it was illegal for the tenants to reside anywhere other than the caretaker's cottage. The Tribunal found that the premises were to be used by a caretaker or manager of factory works within the building and not on a general residential level. While the tenants were in fact occupying the area designated as the caretaker's cottage or manager's residence, they were merely doing so for residential purposes and were not acting as caretakers. The Tribunal held therefore that the premises were not suitable for occupation as a residence, and as such there was a legal impediment to occupation as a residence and the residential tenancy agreement was illegal. The result of this was that the agreement was unenforceable and the lessor (as the party who had actual or constructive knowledge of the illegality) was unable to recover the unpaid rent owed by the tenant.(132)

Unapproved warehouse renovations

In Bangura & Fan(133) the Tribunal held that none of the renovations (to create two converted premises housing 14 and 16 people, respectively) were approved and therefore the tenancy or occupancy of the bedrooms was unlawful.(134)

Unapproved conversion into multiple dwellings/entering into multiple agreements for the same premises

In Bygrave v Harris and O'Brien (Tenancy)(135) the NSW Consumer, Trader and Tenancy Tribunal found there was a legal impediment due to there being no council approval for conversion of the house into units. The Tribunal, however, declined to refund the rent already paid by the tenant. The Tribunal based this finding on the principles of restitution and unjust enrichment, in that the tenant had the benefit of the premises for nine to 10 months, and to refund the rent would mean the tenant 'has the benefit of living in the premises without paying anything.'(136) The Tribunal stated that '[w]hile the contract cannot be enforced, issues can arise as to the proper adjustment of the rights of the parties once the illegality is discovered.'(137) In other words, it is by no means a foregone conclusion that monies already paid under the contract will be ordered by a court to be repaid.

In Scandolera v Dingwall(138) the lessor enter into a residential tenancy agreement for a converted garage despite never having obtained council approval for human occupation of the garage. While use of the garage for residential premises was found to be illegal, the Tribunal followed Bygrave's case in applying the law of restitution and unjust enrichment.(139) The Tribunal based this finding on the fact that the tenant did not identify the relevant provisions of the statute (Environmental Planning Assessment Act 1979 (NSW)) concerning the illegality; the Council did not order immediate cessation of the tenancy upon determining the illegality; and the fact that the tenant continued to reside in the premises after becoming aware of the illegality. The Tribunal ultimately found that 'allow[ing] the tenant to now succeed in his claim for repayment of the whole of the rent paid would be contrary to the High Court's approach to unjust enrichment.'(140)

The principle of unjust enrichment was also applied in Lazarevska v Ozturk by the NSW Civil and Administrative Tribunal (Consumer and Commercial Division). In this case, a secondary dwelling was constructed without a construction certificate or development consent. The tenant argued that this was a 'fundamental breach' resulting in a total failure of consideration, which entitled the tenant to recover all rent paid. The Tribunal held that this argument was not established as the tenant received the benefit of living in the premises for 12 weeks and was not entitled to unjust enrichment at the expense of the lessor.(141)

In Dangar & Anor v Mansour & Anor the lessors entered into two residential tenancy agreements in relation to one freestanding house - leasing the downstairs portion to one tenant, and the upstairs portion to the other tenant. This caused significant problems for the tenants, such as Australia post being unable to deliver mail, not being able to arrange internet and telephone connection and being unable to arrange insurance due to not having a valid address. At first instance, the Tribunal found that there was a legal impediment to use of the premises as two separate dwellings as it had not been approved for dual occupancy by the ACT Planning and Land Authority.(142) However, this part of the decision was overturned on appeal.(143) In coming to this conclusion, the ACT Civil & Administrative Tribunal stated that the Tribunal at first instance applied the wrong test. As mentioned above, the Tribunal stated that '[t]he question is not whether the premises can be used as a separate or second dwelling, but whether the premises "can be used for residential purposes."' In this case, '[t]here was no evidence, and there was no suggestion, that there was a legal impediment to the physical part of the building proposed to be leased by the tenants being able to be used for residential purposes.'(144)

2.11.7 Notification of Lessor's Name and Address

Private lessor: The lessor is required to notify the tenant (or cause the tenant to be notified) in writing of the lessor's full name and address at the time of entering into the Residential Tenancy Agreement.(145) The lessor must also notify the tenant of any person having superior title to that of the lessor, such as a bank or government authority taking over the premises for redevelopment purposes.(146) If the lessor is a body corporate, the lessor must notify the tenant of the full name and business address of the secretary of the body corporate.(147) There is a potential fine of $5 000 for failing to comply with these requirements.

Property manager: If the premises are managed by a property manager, the lessor and the property manager must notify the tenant (or cause the tenant to be notified) in writing of the full name of the lessor and the full name and address of the property manager. There is a potential fine of $5 000 for failing to do so.(148)

Change of lessor: If the lessor changes during the Residential Tenancy Agreement, the new lessor has 14 days to notify the tenant (or cause the tenant to be notified) in writing of the full name and address of the new lessor (or if the lessor is a body corporate - the full name and business address of the secretary of the body corporate). There is a potential fine of $5 000 for failing to do so.(149)

Change of name or address: If there is a change to the name or address of the lessor, body corporate lessor, property manager or person having superior title to the lessor, the lessor has 14 days after the change to notify the tenant (or cause the tenant to be notified) in writing of this change. There is a potential fine of $5 000 for failing to do so.(150)

2.11.8 Tenant to Give Name and Place of Employment

The tenant must not falsely state their name or place of employment to the lessor. There is a potential fine of $5 000 for doing so.(151)

If the tenant's place of employment changes, the tenant has 14 days after the change to notify the lessor (or cause the lessor to be notified) in writing of the new place of employment. There is a potential fine of $5 000 for failing to do so.(152)

2.11.9 Lessor to Give Copy of Agreement to Tenant

If the lessor or property manager has asked the tenant to sign a written residential tenancy agreement, a copy of this document must be provided to the tenant at the time at which it is signed by the tenant.(153)

The lessor or property manager must ensure that a fully executed copy of the document is delivered to the tenant within 14 days after it has been signed and delivered by the tenant.(154) If 14 days is not reasonably practicable in the circumstances, then the document must be delivered 'within such longer period as is so practicable.'(155) There is a fine of up to $5 000 for failing to comply with these requirements.

If the lessor fails to execute and deliver a copy of the document to the tenant within the required time period, acceptance of rent by the lessor or property manager without reservation gives the document the same effect as if it had been fully executed.(156)

2.11.10 Cost of Written Agreement

The tenant is not required to pay for the cost of executing a written residential tenancy agreement. Under section 55 of the Residential Tenancies Act 1987 (WA), '[w]here a lessor requires the execution of a written residential tenancy agreement or a memorandum of a residential tenancy agreement, the cost of its preparation must be borne by the lessor.'(157)

Notes

1 : Residential Tenancies Act 1987 (WA) s 42(2)(a). For further discussion see 3.2 (Repairs and Maintenance).

2 : Residential Tenancies Act 1987 (WA) s 28.

3 : Residential Tenancies Act 1987 (WA) ss 29(1)(b)(i), 29(2); Residential Tenancies Regulations 1989 (WA) reg 11.

4 : Residential Tenancies Act 1987 (WA) ss 28(1), 29(1).

5 : Residential Tenancies Act 1987 (WA) s 29(4)(a).

6 : Eg rent could be paid by rendering services to the lessor rather than by paying money.

7 : Residential Tenancies Act 1987 (WA) long title.

8 : Residential Tenancies Act 1987 (WA) s 3 (definition of 'residential tenancy agreement').

9 : Residential Tenancies Act 1987 (WA) s 27A; Residential Tenancies Regulations 1989 (WA) reg 10AA.

10 : Residential Tenancies Act 1987 (WA) s 27A; Residential Tenancies Regulations 1989 (WA) Schedule 4 Form 1AA, Form 1AB.

11 : Residential Tenancies Act 1987 (WA) s 54(1).

12 : Residential Tenancies Act 1987 (WA) s 27B(a).

13 : Residential Tenancies Regulations 1989 (WA) reg 5AC.

14 : Residential Tenancies Act 1987 (WA) s 27C.

15 : Residential Tenancies Regulations 1989 (WA) reg 10AB; Schedule 4 Form 1AC.

16 : Residential Tenancies Act 1987 (WA) s 51(1).

17 : Residential Tenancies Act 1987 (WA) s 51(2). For further discussion see 2.10.7 (notification of lessor's name and address).

18 : Residential Tenancies Amendment Regulations 2015 (WA) reg 4; Western Australia, Government Gazette, No 130, 21 August 2015, 3311.

19 : Residential Tenancies Act 1987 (WA) s 3 (definition of 'residential tenancy agreement').

20 : Residential Tenancies Act 1987 (WA) s 27B(b).

21 : Residential Tenancies Regulations 1989 (WA) reg 5AC.

22 : Residential Tenancies Act 1987 (WA) s 27C.

23 : Residential Tenancies Regulations 1989 (WA) reg 10AB; Schedule 4 Form 1AC.

24 : Residential Tenancies Act 1987 (WA) s 51. For further discussion, see 2.10.7 (notification of lessor's name and address).

25 : The minimum terms are the parties, the address of the premises, the commencement date of the tenancy, the length of the term, and the rent to be paid - see 2.8 Essential Terms.

26 : Allan Anforth, Peter Christensen and Sophie Bentwood, Residential Tenancies Law and Practice New South Wales (The Federation Press, 6th ed, 2014) [2.13.7].

27 : Miller v Brown & Ors [2010] WADC 102 (2 July 2010) [57]

28 : Miller v Brown & Ors [2010] WADC 102 (2 July 2010) [58].

29 : Miller v Brown & Ors [2010] WADC 102 (2 July 2010) [59].

30 : Allan Anforth, Peter Christensen and Sophie Bentwood, Residential Tenancies Law and Practice New South Wales (The Federation Press, 6th ed, 2014) [2.13.7].

31 : [2018] ACAT 51 (4 May 2018) [92]-[93].

32 : Commissioner for Social Housing v Moffatt (Residential Tenancies) [2013] ACAT 83 [94]. This decision was upheld on appeal: Commissioner for Social Housing v Moffatt [2015] ACTSC 4 (30 January 2015).

33 : Commissioner for Social Housing v Moffatt (Residential Tenancies) [2013] ACAT 83 [82].

34 : Commissioner for Social Housing v Moffatt (Residential Tenancies) [2013] ACAT 83 [83]-[84].

35 : Commissioner for Social Housing v Moffatt (Residential Tenancies) [2013] ACAT 83 [85]; cited with approval in Commissioner for Social Housing v Ryan (Residential Tenancies) [2018] ACAT 51 (4 May 2018) [92].

36 : Commissioner for Social Housing v Pesi (Residential Tenancies) [2015] ACAT 58 [18]-[19].

37 : Commissioner for Social Housing v Game (Residential Tenancies) [2015] ACAT 59 [10].

38 : Johnstone v Housing Authority [2015] WADC 8 [39].

39 : Johnstone v Housing Authority [2015] WADC 8 [40-[41].

40 : Johnstone v Housing Authority [2015] WADC 8 [43].

41 : Johnstone v Housing Authority [2015] WADC 8 [47].

42 : [2017] VCAT 477 (10 April 2017).

43 : Note that under the Victorian prescribed form and s 263 of the Residential Tenancies Act 1997 (Victoria) (equivalent to s 64 of the Residential Tenancies Act 1987 (WA)) the lessor must provide not less than 120 days' notice to terminate a periodic tenancy agreement with no grounds, whereas in WA the lessor is required to provide not less than 60 days' notice.

44 : Allan Anforth, Peter Christensen and Sophie Bentwood, Residential Tenancies Law and Practice New South Wales (The Federation Press, 6th ed, 2014) [2.13.7].

45 : Macquarie Dictionary (Macmillan, 6th ed, 2013) 1159.

46 : The New Shorter Oxford English Dictionary (Oxford University Press, 4th ed, 1993) vol 2, 2335.

47 : Butterworths Concise Australian Legal Dictionary (LexisNexis Butterworths, 3rd ed, 2004) 337.

48 : Miller v Brown & Ors [2010] WADC 102 (2 July 2010) [36], [40].

49 : Turner v York Motors Pty Ltd [1951] HCA 52; [1951] HCA 52; (1951) 85 CLR 55 (3 October 1951) [43]; Ceedive Pty Ltd v May, Timms, Mc Fadden and Mudway [2005] NSWSC 222 (18 March 2005) [128]; White Albatross Holiday Park v Pearce (Tenancy) [2012] NSWCTTT 344 (30 August 2012) [15]. See also Miller v Brown & Ors [2010] WADC 102 (2 July 2010) where the District Court of WA cites case law pointing to premises not being confined to a building or residence: Gardiner v Sevenoaks Rural District Council [1950] 2 All ER 84 at 85; Norton v Knowles [1967] 3 All ER 1061 [35] (Davis DCJ).

50 : Turner v York Motors Pty Ltd [1951] HCA 52; [1951] HCA 52; (1951) 85 CLR 55 (3 October 1951) [43]; Ceedive Pty Ltd v May, Timms, Mc Fadden and Mudway [2005] NSWSC 222 (18 March 2005) [128].

51 : Bonnington & Co Pty Ltd v Lynch [1952] HCA 46; [1952] HCA 46; (1952) 86 CLR 259 (18 August 1952) [4].

52 : Macquarie Dictionary (Macmillan, 6th ed, 2013) 1249.

53 : Macquarie Dictionary (Macmillan, 6th ed, 2013) 1249.

54 : The New Shorter Oxford English Dictionary (Oxford University Press, 4th ed, 1993) vol 2, 2561.

55 : The New Shorter Oxford English Dictionary (Oxford University Press, 4th ed, 1993) vol 2, 2560.

56 : [1995] WASC 627 (15 November 1995) 8.

57 : Allan Anforth, Peter Christensen and Sophie Bentwood, Residential Tenancies Law and Practice New South Wales (The Federation Press, 6th ed, 2014) [2.3.6].

58 : (1988) 14 NSWLR 423.

59 : Residential Tenancies Act 1987 (WA) s 3 (definition of 'residential tenancy agreement').

60 : Residential Tenancies Act 1987 (WA) s 3 (definition of 'premises').

61 : Mills v Robinson [1950] SASR 25, cited in Peter E Nygh and Peter Butt (eds), Butterworths Australian Legal Dictionary (Butterworths, 1997) 68.

62 : Residential Tenancies Regulations 1989 (WA) Schedule 4 Form 1AA, Form 1AB.

63 : Residential Tenancies Act 1987 (WA) s 3 (definition of 'residential premises').

64 : Moore, Terry Caroline (Tenant), and White, Donald Raymond (Tenant) v Lesbian Space Inc. (Landlord) [1997] NSWRT 154 (3 July 1997) 33-5. See also Nunn v Preston 1994] NSWRT 128, which discusses the effect of the Sarkis decision which led to the enactment of r 21 of the former Residential Tenancies (Residential Premises) Regulation 1995 (NSW).

65 : New South Wales Land and Housing Corporation v Toufic [1992] NSW Conv R 55-625.

66 : Residential Tenancies Act 1987 (WA) s 3 (definition of 'rent').

67 : Government of Western Australia Department of Communities, Housing Authority Rental Policy Manual (April 2018) <http://www.housing.wa.gov.au/HousingDocuments/Rental_Policy_Manual.pdf> 85.

68 : http://www.housing.wa.gov.au/HousingDocuments/Rental_Policy_Manual.pdf> 84- 93.

69 : Residential Tenancies Regulations 1989 (WA) Schedule 4 Form 1AA, Part A (TERM OF AGREEMENT).

70 : Residential Tenancies Act 1987 (WA) s 72(3)(b).

71 : Residential Tenancies Act 1987 (WA) ss 76C(1)--(2).

72 : Residential Tenancies Act 1987 (WA) s 76C(3).

73 : Residential Tenancies Act 1987 (WA) s 54(2). See also Wayne Edward John Streat v Fantastic Holdings Limited [2011] NSWSC 1097 (9 September 2011) [22]-[23].

74 : Masters v Cameron [1954] HCA 72; [1954] HCA 72; (1954) 91 CLR 353 (30 November 1954).

75 : At common law the doctrine of interesse termini applied and leases did not take effect until the tenant entered into possession. However, the doctrine of interesse termini was abolished by s 74(1) of the Property Law Act 1969 (WA).

76 : Residential Tenancies Act 1987 (WA) s 3 (definition of 'residential tenancy agreement').

77 : Currie v Misa (1875) LR 10 Ex 153, 162, cited in Lexis Nexis, Encyclopaedic Australian Legal Dictionary (at 15 May 2018) Valuable Consideration. See also Jeannie Marie Paterson, Andrew Robertson and Arlen Duke, Contract: Cases and Materials (Thomson Reuters, 12th ed, 2012) [4.45].

78 : Jeannie Marie Paterson, Andrew Robertson and Arlen Duke, Contract: Cases and Materials (Thomson Reuters, 12th ed, 2012) [4.45].

79 : In Re Magistrate R Proth; Ex Parte Yahiya [2016] WASC 284 (5 September 2016) [60], Pritchard J states: 'Although the rent was the nominal sum of $1 per annum, it has been recognised that nominal consideration (a 'single peppercorn') may constitute valuable consideration to support a simple contract. There are sound reasons why the courts do not weigh the adequacy of consideration in judging whether a particular bargain amounts to a legally enforceable contract.' See also cases cited by Pritchard J: Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298, 307 (Handley JA); Varma v Varma [2010] NSWSC 786 [462]; Woolworths Ltd v Kelly [1991] 22 NSWLR 189, 193 - 194 (Kirby P).

80 : Re Moody and Yates Contract (1885) 30 Ch D 344 at 347; Datastream International Ltd v Oakeep Ltd [1986] 1 WLR 404, cited in LexisNexis, Encyclopaedic Australian Legal Dictionary (at 15 May 2018) peppercorn rent.

81 : Residential Tenancies Regulations 1989 (WA) reg 10AC.

82 : Residential Tenancies Act 1987 (WA) s 27C(1).

83 : Residential Tenancies Act 1987 (WA) s 27C(2).

84 : Residential Tenancies Act 1987 (WA) s 27C(3).

85 : [[http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/wa/consol_act/rta1987207/s29.html][Residential Tenancies Act 1987 (WA) s 29(1)(b)(i).

86 : Residential Tenancies Act 1987 (WA) s 29(2); Residential Tenancies Regulations 1989 (WA) reg 11.

87 : Residential Tenancies Act 1987 (WA) s 29(1)(b)(ii).

88 : Residential Tenancies Act 1987 (WA) s 29(1)(a).

89 : Residential Tenancies Act 1987 (WA) s 29(2A).

90 : Residential Tenancies Act 1987 (WA) s 29(4)(a).

91 : Residential Tenancies Regulations 1989 (WA) reg 5A(2).

92 : Residential Tenancies Act 1987 (WA) s 29(1)(b)(ii).

93 : Such a requirement does not sit easily with the provision in the Act that a person may receive a security bond in instalments: Residential Tenancies Act 1987 (WA) s 29(2A).

94 : Note that in the case of a verbal agreement the parties are free to agree that the bond be paid at an earlier or later date, rather than on signing.

95 : Residential Tenancies Act 1987 (WA) s 29(4)(a).

96 : Residential Tenancies Act 1987 (WA) s 29(4)(b); Residential Tenancies Regulations 1989 (WA) reg 5A(1A)--(1B).

97 : Residential Tenancies Act 1987 (WA) s 29(4)(c).

98 : Residential Tenancies Act 1987 (WA) s 29(6).

99 : Residential Tenancies Act 1987 (WA) Schedule 1, Division 2, cl 5A.

100 : Residential Tenancies Regulations 1989 (WA) reg 7H(3).

101 : Residential Tenancies Act 1987 (WA) s 29(4).

102 : Residential Tenancies Act 1987 (WA) s 92; Residential Tenancies Amendment Act 2011 (WA) r 87; Western Australia, Government Gazette, No 71, 3 May 2013, 1735.

103 : Residential Tenancies Act 1987 (WA) s 93(1); Residential Tenancies Regulations 1989 (WA) reg 7G.

104 : Residential Tenancies Act 1987 (WA) s 93(2).

105 : Government of Western Australia, Housing Authority, Housing Authority Bond Assistance Loan Policy (Private Rental Housing Assistance) (April 2018)

106 : Government of Western Australia Department of Communities, Housing Authority Rental Policy Manual (April 2018) <http://www.housing.wa.gov.au/HousingDocuments/Rental_Policy_Manual.pdf> 142.

107 : Residential Tenancies Regulations 1989 (WA) reg 5A.

108 : Residential Tenancies Regulations 1989 (WA) reg 7H.

109 : Residential Tenancies Act 1987 (WA) ss 31(1), (2).

110 : Residential Tenancies Act 1987 (WA) s 31(1)(a).

111 : Residential Tenancies Act 1987 (WA) s 31(1)(b).

112 : Residential Tenancies Act 1987 (WA) s 29(3).

113 : Residential Tenancies Act 1987 (WA) s 40(2); Residential Tenancies Regulations 1989 (WA) Schedule 4 Form 1AA, Part B, cl 15.1.

114 : Kopas v Celermajer Holdings Pty Ltd [2012] NSWCA 53 (29 March 2012) [38].

115 : Topfell Limited v Galley Properties Limited [1979] 1 WLR 446, 449E, cited in Berrell v Combined Pastoral Pty Limited [2015] NSWSC 1334 (11 September 2015) [19].

116 : A substantial quantity of rubbish left on the premises was found to be a breach of the tenant's obligation to deliver up vacant possession in Waterhouse v Waugh [2003] NSWCA 139 (2 June 2003) [52]. See also Cumberland Consolidated Holdings Ltd v Ireland [1946] KB 264 CA.

117 : Cumberland Consolidated Holdings Ltd v Ireland [1946] KB 264, 270-271 (Lord Greene MR), cited in Waterhouse v Waugh [2003] NSWCA 139 (2 June 2003) [51]; Berrell v Combined Pastoral Pty Limited [2015] NSWSC 1334 (11 September 2015) [20], [22]; PJ Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd and Anor, No. SCCIV-02-165 [2002] SASC 180 (3 June 2002) [19].

118 : Frankel v Paterson [2015] NSWSC 1307 (18 September 2015) [115].

119 : Residential Tenancies Act 1987 (WA) s 40(1).

120 : [2016] NSWCATCD 17.

121 : [2017] NSWCATCD 18.

122 : Residential Tenancies Act 1987 (WA) s 42(2)(a).

123 : Residential Tenancies Act 1987 (WA) s 41.

124 : Residential Tenancies Regulations 1989 (WA) Schedule 4 Form 1AA cl 15.2.

125 : Chymiak v Marshall and Baldwin [2007] NSWCTTT 579; Van Loon & Leeder v Maloney [2006] NSWCTTT 737; Dargin v Melisi [2003] NSWCTTT 702; Kutty v Jaczak [2013] NSWCTTT 205, cited in Mansour v Dangar (Appeal) [2017] ACAT 49 [34].

126 : Allan Anforth, Peter Christensen and Sophie Bentwood, Residential Tenancies Law and Practice New South Wales (The Federation Press, 6th ed, 2014) [2.49.2].

127 : Bangura & Fan [2013] ACAT 38 [48].

128 : Bygrave v Harris and O'Brien (Tenancy) [2012] NSWCTTT 268 (13 July 2012).

129 : Bangura & Fan [2013] ACAT 38 [47]--[48].

130 : Mansour v Dangar (Appeal) [2017] ACAT 49 (3 July 2017) [51].

131 : [2006] NSWCTTT 737 (4 May 2006).

132 : Van Loon & Leeder v Maloney (Tenancy) [2006] NSWCTTT 737 (4 May 2006), citing Moore & White v Lesbian Space Inc RTT 97/017791.

133 : [2013] ACAT 38.

134 : Bangura & Fan [2013] ACAT 38 [50].

135 : [2012] NSWCTTT 268 (13 July 2012).

136 : Bygrave v Harris and O'Brien (Tenancy) [2012] NSWCTTT 268 (13 July 2012) [18].

137 : Bygrave v Harris and O'Brien (Tenancy) [2012] NSWCTTT 268 (13 July 2012) [12].

138 : [2017] NSWCATCD 41 (24 February 2017).

139 : Scandolera v Dingwall [2017] NSWCATCD 41 (24 February 2017) [40].

140 : Scandolera v Dingwall [2017] NSWCATCD 41 (24 February 2017) [47].

141 : Lazarevska v Ozturk [2017] NSWCATCD 21 (31 March 2017) [37]--[41].

142 : Dangar & Anor v Mansour & Anor [2016] ACAT 61.

143 : Mansour v Dangar (Appeal) [2017] ACAT 49 (3 July 2017).

144 : Mansour v Dangar (Appeal) [2017] ACAT 49 (3 July 2017) [51].

145 : Residential Tenancies Act 1987 (WA) s 51(1)(a)(i).

146 : Residential Tenancies Act 1987 (WA) s 51(1)(a)(ii).

147 : Residential Tenancies Act 1987 (WA) s 51(1)(b).

148 : Residential Tenancies Act 1987 (WA) s 51(2).

149 : Residential Tenancies Act 1987 (WA) s 51(3).

150 : Residential Tenancies Act 1987 (WA) s 51(4).

151 : Residential Tenancies Act 1987 (WA) s 53(1).

152 : Residential Tenancies Act 1987 (WA) s 53(2).

153 : Residential Tenancies Act 1987 (WA) s 54(1)(a); Residential Tenancies Regulations 1989 (WA) Schedule 4 Form 1AA cl 2.1.

154 : Residential Tenancies Act 1987 (WA) s 54(1)(b); Residential Tenancies Regulations 1989 (WA) Schedule 4 Form 1AA cl 2.2.

155 : Residential Tenancies Act 1987 (WA) s 54(1)(b).

156 : Residential Tenancies Act 1987 (WA) s 54(2).

157 : Residential Tenancies Act 1987 (WA) s 55.


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