RESIDENTIAL TENANCIES AUTHORITY

Paying the rent

Rent in advance

Most lessors/agents require tenants to pay their rent in advance. For example, the tenant may pay rent every second Saturday to live in the place for the next 2 weeks. The tenant will normally pay the first lot of rent before they move in.

Rent in advance is not part of the rental bond. No matter how much rent the tenant pays in advance, they cannot be asked to pay more rent until the rent paid in advance has been used up.

The lessor/agent cannot ask the tenant to pay more than 1 month rent in advance if they have a fixed term agreement, or more than 2 weeks rent in advance if they have a periodic agreement. The tenant can pay more rent in advance if they want to.

Approved ways of paying rent

The Act sets out the following, approved ways that rent can be paid.

cash
cheque
deposit to a financial institution account nominated by the lessor
credit card
an EFTPOS system
deduction from pay, a pension or other benefit payable to the tenant
another way agreed on by the lessor and tenant.

Deciding on how rent will be paid

When agreeing on how the rent will be paid, the lessor/agent and tenant can choose from the list of approved ways. If an unapproved way e.g. Rentcard is preferred, the lessor/agent must give the tenant the choice of at least 2 other approved ways for the payment of rent.

The lessor/agent must also advise the tenant of any extra costs associated with payment of rent in any of the proposed ways. The tenant can then make an informed decision about how they would like to pay the rent.

Rent payments

The tenant and the lessor/agent should agree on how, where, and how often the rent will be paid. This must be included in the tenancy agreement.

For fixed term agreements, rent payment methods cannot be changed for the duration of the tenancy agreement unless both the tenant and the lessor/agent agree in writing. If the rent is to be increased during a fixed term tenancy, the amount of the increase or how the amount of the increase is to be worked out must be included on the agreement. The tenant must also be given 2 months written notice of the increase and there must be at least 6 months since the last increase.

If the tenant pays their rent with cash or cheque, the lessor/agent must give them a receipt.

Receipts should be kept in a safe place, they are the tenant's rent record and proof that rent has been paid.

If the tenant pays rent in some other way (like direct transfer from their bank account, or over the phone with a credit card) they won't normally get a receipt for the money (but it will appear on their bank/credit card statements). However, the lessor/agent must keep a record of the rent the tenant pays, and the tenant can ask for a copy of the rent record at any time. If the tenant asks for a copy of the rent record, the lessor/agent must give it to them within 7 days.

Sometimes lessors/agents will offer a tenant a discount in rent if they pay the rent before the due date. This is allowed however, lessors/agents cannot have an agreement with the tenant where they will receive a discount if they don't damage the place or break the tenancy agreement. A tenant cannot be charged a fee if the rent is late.

Payment of rent by electronic transaction

Electronic transfers of money do not always occur on the date specified. The Act outlines when tenants are considered to have paid rent. The payment is taken to be received by the lessor/agent on the day the tenant has authorised the electronic transfer of funds even if the payment arrives in the lessor/agent's account at a later date.

Rent increases

The rent can't be increased during a fixed term agreement unless a special term of the tenancy agreement states that the rent can be increased.

If the fixed term agreement allows for rent increases, the lessor/agent must give the tenant at least 2 months notice in writing before increasing the rent.

The rent can be increased at any time during a periodic agreement by giving the tenant at least 2 months written notice. The written notice can be a letter saying how much the rent will increase by, and the day when the tenant needs to start to pay the increased rent.

Regardless of the type of agreement, rent cannot be increased within 6 months since the current amount became payable by the tenant. This applies even if there has been more than 1 fixed term agreement.

If the rent goes up, the lessor/agent might also ask the tenant to pay more rental bond. Notice of bond increase can only be given if it is at least 11 months since the last bond increase. The lessor must give 1 months notice about the bond increase. The extra bond must be lodged with the RTA using either a Bond Lodgement - form 2 (PDF 109kB) or Part Payment of Rental Bond - form 7 (PDF 87kB).

Rent decreases

In some situations, such as where part of the premises are destroyed or a service becomes unavailable, the tenant can ask the lessor/agent for a rent decrease.

The tenant can agree with the lessor/agent about the rent decrease or can apply to the tribunal. If there is a dispute about a rent decrease, the tenant must continue to pay the rent stated on the agreement until the dispute is resolved.

Excessive rent increases

Tenants can dispute rent increases if they consider it excessive and the increase occurs within the fixed or periodic agreement or between agreements (if the tenant remains in the same premises).

If the tenant disagrees with an excessive rent increase between agreements, the tenant must sign the new agreement and pay the increased rent before they can formally dispute the rent increase. The < ahref="applying_for_dispute_resolution_1.cfm">RTA's Dispute Resolution Service can provide assistance with disputes of this nature.

More information

Rent payments and holding deposits fact sheet