Private Real Estate


Leasing Residential Property in Victoria
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A lease is an interest in land granted by one person, the landlord or lessor, to another, the tenant or lessee, which confers a right to exclusive possession of land for a fixed period of certain duration. This interest may also be known by the older expression "demise".
Residential, Commercial and Industrial property can all be leased in Victoria. However each is subject to a different statutory regime.
1.	Leasing Residential Property in Victoria
	The following guide has been written in compliance with the provisions and rules outlined in the Residential Tenancies Act 1997 (Vic).
	The following steps can be followed by a prospective landlord who is considering leasing their residential property in Victoria:
	(a)	Market demand for your property very much depends upon the quality of what you are offering. Carefully consider what is attractive about your property and what may need to be repaired or replaced. Then undertake the necessary improvement.
	(b)	In leasing your property it is vital that you carefully consider who you want to select to market your property to.
	(c)	Advertise in local and regional newspapers, on billboards or on the internet that your property is available for rent.
	(d)	Prospective tenants may then want to inspect your property.
	(e)	You will be required to draft a Rental Application Form, which will be provided to a prospective tenant. This form should allow them to enter all their important personal details, be drafted in a way to allow you to access their credit history. You can also ask them to provide you with references on their character or rental history. This will make it easier to ensure that you do not get a destructive or unreliable tenant. Remember it is illegal to make a tenant disclose details of their race, sexual preference or any other detail that would violate the Equal Opportunity Act 1995 (Vic). If you require any help in drafting this form, you should contact your solicitor.
	(f)	After receiving their application, you should check the information that they provided. National Databases now exist that can allow you to check on a tenant's past rental or credit history. Useful databases include the National Tenancy Database (phone no: (03) 9610 4996), Barclay MIS Risk Management (phone no: (07) 3390 6600) and Tenant Information Centre of Australia (phone no: (02) 9736 3600). If a tenant has a poor record, it is your prerogative to reject their application. However, this must be decided before anything is signed and before they move in. Your solicitor will usually do this for you.
	(g)	If their history is satisfactory, you should then require the tenant to provide you with a deposit. This will test their commitment to continue and could be used as evidence if a dispute arises that they have agreed to the lease. Your solicitor will usually hold this on trust for you and release it, once the lease has begun. That deposit should be deducted from the bond amount or first monthly payment.
	(h)	Since it is a legal document you should then contact a solicitor to prepare a formal tenancy agreement or lease. A standard tenancy agreement can be obtained from Consumer Affairs Victoria. However, additional terms can be also be included if they suit your needs. A lease should contain the amount of rent to be paid, the method of payment, length of renting time, security bond amount and other conditions and rules.
		It is important to decide whether you are willing to accept tenants who are seeking a fixed term or periodical lease. Consult with your solicitor as to which is more appropriate.
		Before signing the agreement, you must allow the tenant to view an unsigned copy of the final lease. 14 days after signing, you must provide the tenant with a copy of the signed lease.
	(i)	You must then provide the tenant with a copy of the guide Renting a Home: A guide for tenants and landlords, which is available from Consumer Affairs Victoria on or before the date the tenant moves in.
	(j)	It is your right to require the tenant to provide you with a bond, before they move in. A bond is a security deposit (usually one month's rent) paid by the tenant to you at the start of tenancy. It is designed to act as security for any damage to the property or for unpaid rent. You cannot ask for more than one month's rent as a bond, unless the weekly rent is over $350 or if you are leasing your primary place of residence.
	(k)	Once the bond has been paid, you and the tenant must sign a Bond Lodgement Form. You must then lodge the form with the Residential Tenancies Bond Authority within 10 days of the tenant paying it.
	(l)	You must at the beginning of the tenancy, and only if the tenant has paid a bond, provide them with two copies of a condition report, filled in and signed by you. They will then have an opportunity to respond, sign and return one copy to you. This form is provided as conclusive evidence as to what condition the property was in before the tenancy began and may be vitally important should a dispute arise as to whether the bond can be returned. Subsequently make sure it is absolutely accurate and contain every detail possible.
	(m)	Allow the tenant to move in and wait for the rent to be paid on a monthly basis.
	(n)	It is entirely voluntary, however it is advisable to have the lease registered on the title, to ensure that any potential purchaser of your title is aware that the land is encumbered with a lease. A solicitor should be able to assist you in this regard.
2.	Renting Residential Property in Victoria
	The following guide has been written in compliance with the provisions and rules outlined in the Residential Tenancies Act 1997 (Vic).
	A prospective tenant who is considering their options for leasing a residential property in Victoria can follow the following steps;
	(a)	It is always a good idea to prepare a budget before you start house hunting. This will enable you to ensure that you know what type of properties are within your price range and will hopefully stop you from making irresponsible financial decisions. It is also important to factor in other incidental costs, such as removal costs, bond payments, utility connection fees and insurance costs.
	(b)	Look through newspapers (both regional and local), check billboards and search the internet for advertisements on properties that are available for lease.
	(c)	Contact the landlord who is advertising the property and see if there are either any open inspections scheduled, or alternatively if it is possible for you to conduct your own inspection of the property. If doing a private inspection, most landlords will require you to provide them with a $50- $100 deposit and a photocopy of your id (Victoria's drivers licence will be fine), before they give you the keys. Although open inspections are free, they are often only for a short period of time and may be conducted with a number of other prospective tenants. Both factors combining to make it harder for you to have thorough inspection of the property.
	(d)	If you are still interested a landlord may require you to fill out a Rental Application Form. These forms will require you to provide basic details that will make it easier for a landlord to check your credit and tenancy history.
		Note that landlords are not allow to ask you any questions regarding your race, sexual preference or any other matter that would be in violation of the Equal Opportunity Act 1995 (Vic). Similarly they are no allowed to conduct a detailed credit check without your permission. However landlords are entitled to check a number of national databases (the most used being the National Tenancy Database) which keeps a record of those who are on a bad tenancy list. At this point if you are refused it could be because of your listing on such a database.
	(e)	Landlords may then ask you for a deposit before they allow you to apply for a property. If your application is successful and you enter into a tenancy agreement (lease), you can arrange for the application deposit to be put towards your bond or first months rent. If your application is unsuccessful, the application deposit must be refunded to you on the next business day.
	(f)	At this time you should look at entering into a tenancy agreement or lease with the landlord. This will usually cover the amount of rent to be paid, the method of payment, length of renting time, security bond amount and other conditions and rules.
		The written agreement must follow the wording of the official "Residential Tenancy Agreement" form, which can obtained, from Consumer Affairs Victoria. Sometimes parties may use their own forms and include additional terms, however any additional terms must comply with the Act.
		It is important to decide whether you want to enter into a fixed term or periodic lease. Consult a solicitor to see which option will suit you or for any other matter arising from the lease that needs to be clarified. Remember the terms of a lease can be negotiated to suit your needs.
	(g)	Before signing the lease, the landlord must give the tenant an unsigned copy to look over first. When signed the tenant should be provided with a signed copy within 14 days. Only sign if you are pleased with the term of the lease, because once signed it is legally binding.
	(h)	Once the lease is signed, you must be given a copy of the guide Renting a Home: A Guide for tenants and landlords by the landlord before or on the day of moving in. This guide is available from Consumer Affairs Victoria.
	(i)	Before moving in you will be required to pay a bond. A bond is a security deposit (usually one month's rent) paid by you to the landlord at the start of tenancy. It is designed to act as security for any damage to the property or for unpaid rent. A landlord cannot ask for more than one months rent as a bond, unless the weekly rent is over $350 or if you are leasing the landlord's primary place of residence.
	(j)	When you have paid your bond, you and the landlord must sign a Bond Lodgement Form. The landlord must then lodge the form with the Residential Tenancies Bond Authority within 10 days of you paying it.
	(j)	At the beginning of your tenancy, and only if you have paid a bond, your landlord must provide you with two copies of a condition report, filled in and signed by the landlord. You will have an opportunity to respond. Then sign and return one copy to the landlord. This form is provided as conclusive evidence as to what condition the property was in before the tenancy began and may be vitally important should a dispute arise as to whether the bond can be returned. Subsequently only accept it, if it is absolutely accurate.
	(k)	Move in and begin your tenancy.
	(l)	3 months after the lease was executed you will be required to pay any stamp duty arising from the lease.



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