Beginning a Tenancy

Contributed by Tenancy Advice Service (a division of Legal Aid ACT) and Peter Christensen and current to March 2020.

There are many ways to find a tenancy. These include advertisements, word-of-mouth and through real estate agents. Before moving into a tenancy a tenant should inspect the premises to make sure it is suitable. Once satisfied the property is suitable, a tenant should then agree with the lessor on terms including the rent and the length of the lease. Most fixed term tenancies run for 6 or 12 months.

As a practical matter, tenants should be confident they can afford whatever rent they agree to. A tenant should not enter into a tenancy with the expectation that they will be able to rent out rooms or take a co-tenant as both of these are illegal without the lessor's consent. However, an unreasonable refusal by the lessor to take a co-tenant can be the subject of a challenge in the ACAT (see below).

The lessor should provide a copy of the proposed residential tenancy agreement to a proposed tenant and allow reasonable time to review it. If the proposed agreement contains terms inconsistent with the SRTT, these need to be clearly pointed out. A tenant is not obliged to accept any inconsistent terms and such terms must be endorsed by ACAT even if agreed upon.

A tenancy agreement can include a 'break lease clause' and/or a 'fair clause for post-people'. If there is no break lease clause and the tenant breaks the lease before the end of the fixed term, they could be liable for up to 25 weeks' rent in compensation to the lessor depending on how much of the tenancy term remains and how quickly the lessor can re-let the premises. The break lease clause however caps the obligation to pay rent at 6 weeks if in the first half of the fixed term or 4 weeks if in the latter half, or until the date the premise is re-let and the new tenants start paying rent (if sooner).

If uncertain about the terms and conditions of a tenancy agreement provided by a potential lessor, a tenant should obtain advice on the proposed agreement by contacting the Tenancy Advice Service on 1300 402 512.

Once a tenant signs a tenancy agreement they will usually be required to pay the bond and rent in advance, but they should not pay these until close to the moving in date. A lessor cannot require a tenant to pay more than 2 weeks rent in advance.

Once a tenant moves in they should take note of the condition of the property and take dated photographs of the state of the premises. They should also check that all facilities provided with the premises work (e.g. lights turn on, stove heats up, water comes out of taps, hot water flows). A tenant should also check that all locks work and that keys are provided for every lock. Unless the tenant agrees, there should be no areas where the lessor has left their own belongings or 'no-go' areas in the property. If there are any problems the tenant should immediately contact the lessor or the agent and complain.

The lessor is required, not later than the day after a tenant moves in, to give the tenant 2 copies of a condition report. A standard condition report is available from the Tenancy Advice Service website. A tenant should carefully check the condition report and ensure it accurately reflects the state of the premises and write comments where necessary. Many disputes that come before ACAT relate to the state of the premises at the time a tenant takes possession, and having a clear report of the condition at the start of the tenancy makes resolving these issues much easier.

Amendments to tenancy laws introduced on 3 March 2021 also provide a pathway for prospective tenants to enter into pre-existing tenancy agreements.

If a tenant seeks to join another person (a prospective tenant) to the tenancy agreement, they may only do so with the consent of the lessor and any other existing tenant.

An existing tenant must seek the consent of the lessor and other tenants in writing at least 14 days before the prospective tenant plans to become a co-tenant.

A lessor cannot unreasonably refuse consent and upon refusal must tell the existing tenant and the prospective tenant in writing their reason for refusal. A lessor and other existing co-tenants are taken to consent if they do not respond to the existing tenant’s request within 14 days.

If an existing tenant has sought the consent of the lessor and other tenants but the lessor has refused to give consent, the existing tenant may apply to the ACAT for a declaration that the lessor’s refusal was unreasonable. Upon submitting this application, the prospective tenant is automatically joined to the residential tenancy agreement.

When a prospective tenant moves into the property, the remaining co-tenants must give a copy of the entry condition report to the tenant not more than 1 day after the new co-tenant has moved into the property. The new co-tenant will be jointly liable along with the existing co-tenants in relation to their obligations under the existing tenancy agreement.

The bond implications for a new co-tenant entering into an existing residential tenancy agreement and a leaving co-tenant are discussed in the ‘During a Tenancy’ part of this Handbook.

For further information about co-tenancies, see the Tenancy Advice Service ‘Co-tenancy’ factsheet.

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