The legal definition of a residential tenancy agreement is “an agreement under which a person grants to another for value a right of occupation of residential premises for the purpose of use as a residence”. It’s pretty much your standard legalese, with lots of big words and some repeat words for emphasis. But what exactly does it mean?

What is a residential tenancy agreement?

A residential tenancy agreement is usually in writing and outlines conditions and stipulations to the rental of a property. When a tenancy agreement is in writing and both parties have signed, it is clear what the expectations were from the outset and where each party stands. It’s important, then, to read the document thoroughly and ensure you understand each clause and what it means for you.

A tenancy agreement doesn’t have to be a completely written, signed contract between parties – it can be a verbal agreement between two people, or a mixture of oral and writing. There must be certain elements present for a verbal agreement to be legally binding; offer, acceptance, consideration, all terms must be agreed upon and the parties must intend to be legally bound. So if you and a mate shake hands over a beer, agreeing that one will pay money to live in another’s residence, that’s a residential tenancy agreement. If you sign a piece of paper saying one person will work for residency in a home (for example, cook/clean/sew or garden), that’s also a residential tenancy agreement. This can often cause problems due to the ambiguity of the terms agreed upon. It is always recommended to have a formally written agreement.

The person who has the right to occupy said premises is the tenant, and the person granting the right is the landlord. A tenant can also be a landlord to a sub-tenant. The tenant and the landlord agree to certain conditions, and this forms the basis of the agreement. It is important to consider the residential tenancy agreement as a contract.

What can be included in a residential tenancy agreement?

Pretty much anything and everything pertaining to the rental of the property. This can include the following:

  • How much the rent is, when it’s due and payment options
  • What has to happen when the tenant vacates the property
  • How often a landlord can come onto the property
  • Who pays for major repairs
  • Who pays for water/electricity etc
  • When rent can increase and why
  • When rent can decrease and why
  • Alterations and additions to the premises
  • Maintenance and running repairs
  • Under what circumstances a tenant may sub-let
  • Circumstances around the bond, pets, pools, smoking, signatures and important contacts

It is important that you read each clause carefully and ask for clarification – or changes – if you’re not happy.

As with any document, it’s important to make sure you understand, and  agree, with the contents. Once you sign, you agree to the contents. It is then difficult to say you either didn’t understand, or you don’t agree. If you need help reading or creating a rental agreement, contact us. Our friendly staff at Aspect Estate Agents are more than happy to assist you with any aspect of a residential tenancy agreement, and will guide you before you sign.