Rights on rent

5 Oct 2021

In this episode of Talking Tenancies, we delve into the tricky questions we receive on a regular basis when it comes to your rights on rent with the RTA’s Peggy McGuinness.

Transcript

Host - Belinda Heit – Communication and Education – RTA 

Guest – Peggy McGuinness – Customer Experience - RTA 

Host: Welcome to the Talking Tenancies podcast, brought to you by the Residential Tenancies Authority.  I’m your host, Belinda Heit. Join me as we explore everything you need to know about renting in Queensland, with experts from the RTA and industry. We're here to help make renting work for everyone. 

The amount of rent and how it should be paid must be stated in the tenancy agreement. There are rules for rent increases and in some circumstances the rent may be decreased. There are also rules about the non-payment of rent. Today's expert from the RTA is Peggy McGuinness. Welcome, Peggy. 

Guest: Thank you. 

Host: Now, can you tell us about your role at the RTA and what you're responsible for? 

Guest: Sure, so I'm a Senior Conciliator in the RTA’s dispute resolution service. So that means I'm responsible for helping parties, so tenants and owners and agents, resolve disputes which might occur during a tenancy, or perhaps at the end of a tenancy about their bond. 

Host: Great! And I know you're always busy, so thank you so much for joining us today. Now today, we're going to talk about the rights on rent. There are so many questions obviously that you would come across in calls around rent and bond, and all kinds of different things, so we’re going go through some of those today. 

Guest: Sure.  

Host: Now, if a tenant doesn't pay the rent in full on the day it is due, the following day they are one day in arrears. The managing party cannot issue a breach notice until the tenant has been in arrears for a certain period of time. What is the unpaid rent procedure for both general tenancies and rooming accommodation? 

Guest: OK, so for general tenancies, the rent must first be unpaid for at least seven days before a notice to remedy breach can be issued. Then on the eighth day, a notice to remedy breach can be issued to the tenant and that gives them at least seven days to catch up on the rent payments. 

So, if the rent is owed or remains unpaid when that notice expires, the property manager or owner has two options. They can request free dispute resolution through the RTA for us to assist in resolving the issue, or they could issue a notice to leave immediately to the tenant. If the tenant catches up on the rent due after the notice to leave has been issued, they can ask the property manager in writing if they can stay and that decision remains solely with the property manager or owner as to if they would agree with the tenancy to continue, or if they're wanting for it to end.  

Host: Right. 

Guest: And for rooming accommodation, the rules are a little bit different. There are different timeframes involved, and it does depend on how long the residents have been living in the premises for. So, if the resident has lived in the premises for less than 28 days, a breach notice can be issued as soon as the resident becomes in arrears, giving them at least two days to pay the rent. If the rent remains unpaid and the notice expires, the resident can then be issued with a notice to leave and asked to leave immediately. 

On the other hand, if the residents have been in the premises for more than 28 days, then they must be at least two days in arrears before the breach notice can be issued, giving them at least four days to catch up on the rent payments. If the rent remains unpaid and the notice expires, the resident can be issued with a notice to leave with four days' notice. 

So, paying rent on time, it is one of the tenants' main responsibilities within a tenancy, and if they happen to fall behind, it is really important that they understand the processes and the rules around the notice period so they can take the appropriate action. 

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Host: And really, it's one of those things, you know, when we sign a tenancy agreement it's one of our obligations is to pay the rent on time, right? So, I think a lot of people forget that one.  
Guest: Yeah 

Host: So, if a tenant is repeatedly in breach of the agreement due to rent arrears, can the managing party end the tenancy? 

Guest: Well, that's a good question. So, under some circumstances with repeated breaches, the managing party can make an urgent application to the tribunal to have the tenancy agreement ended. An urgent application to QCAT can be made, if the following criteria are fulfilled: firstly, a notice to remedy breach was issued each time and each breach was issued for the same problem or issue; each breach was remedied within the remedy period; and each breach happened within a 12-month period. So, when an urgent application is made at QCAT, there's a few things the tribunal will consider before making an order, and that includes the seriousness of the breach, the extent of inconvenience or disadvantage caused to the applicant, how long the tenancy has carried on for, the period of time when the breaches were committed and anything else that they consider relevant. 

Host: Right. So, when we're starting a tenancy, you need to pay a bond, which is generally equal to four weeks rent plus two weeks rent in advance, so paying two weeks rent in advance does not mean you have a week off paying rent right? Or that when moving out you just stop paying rent earlier. 

Guest: Yeah, a lot of people think that it might be that way, but as I mentioned before, paying rent is one of the main obligations, so it’s crucial you’re up to date with the rent. So, with rent in advance, a lot of customers do get confused with that term, but it is a simple counting exercise. 

So, let's say you need to pay two weeks in advance, and you moved in on the first of the month, on the first when you moved in, you've already paid up rent until the fourteenth of the month.  So that rent is separate to the bond that you've paid. On the seventh of the month, you still have one week rent in advance, so you've used up one of your two weeks rent in advance. You're still one week in advance.  

On the fifteenth of the month, your rent in advance has been fully used up, so another two weeks rent needs to be paid to keep going until the 28th of the month and so on and so forth. And the tenancy agreement or your rooming accommodation agreement should state how frequently the rent is to be paid, such as weekly, fortnightly or monthly and this should match when the rent in advance is being requested. So, Queensland tenancy law states the maximum amount of rent in advance that can be requested for a fixed term agreement, that's a month in advance, and requiring any more from the tenant is an offense. However, if a tenant or a resident offers to pay more rent in advance, the managing party can choose to accept their offer. 

It is illegal for the managing party to ask for rent during a period where rent has already been paid. So that means if you're paying rent two weeks in advance, like in our previous example up to the fourteenth of the month, you can't ask to be paid more rent before the fourteenth. And so, when you come to the end of your tenancy, the tenants are responsible for making payments of rent up until the day they vacate property and return the keys. So, make sure you're up to date with your payments and if you're unsure of how much and when you've paid up to, it is your right to ask for a rent ledger. 

Host: Yeah, it's one of those things that we talk about a lot in this podcast is talking to each other is another big part of this agreement. So, if you're having issues with your agent, it's a good idea to talk. Now this leads us to our next question of what is a rent ledger, and how can a tenant request one? 

Guest: OK, so a rent ledger is simply a record of payments that clearly represents when rent was paid, how much was paid and for what period of time that rent payment covers. And that just covers off on all the basics. So generally, the property manager or owner must keep a copy of the rent ledger which can be provided to the tenant when requested, and they're required to keep their ledgers for at least a year after the agreement ends.  

So as a tenant, you may want a record of your rent payments for credit, rental references or other applications and we recommend that you request your ledger in writing if you're needing one, after which time the agent must provide the ledger to you within seven days.  With that said, we always recommend that tenants keep their own record of rent payments as well, and not solely rely on the property manager or owner's records, because your records will give you peace of mind and they can provide an easy cross reference if any issues arise.  

Host: Yeah, very useful just to cross check and double check yourself too in case anything goes wrong. So, it's a legislative requirement for tenants to be given a choice of how they pay their rent, so they can't be forced into a single payment type for rent. So, what are the options here? 

Guest: Well, that's right, Belinda. So, there's definitely a lot of different ways that you can pay your rent nowadays. So Queensland tenancy laws, they have a list of approved ways in which rent can be paid and they include cash, cheque, direct deposit to a bank account nominated by the managing party, via EFTPOS, credit card, payroll or pension deductions, or any other method agreed on by the managing party and the tenant or resident, and that covers things like rent cards, third party payment systems, or these mobile apps and so forth. 

But if the managing party wants the tenant or resident to pay by one of these other methods, which is the last option that I just listed, there are some additional rules which are included. So, the managing party must inform the tenant of any costs and fees that are associated with this payment method. That might be a joining fee or a processing fee for each payment, and they must also offer at least two of those other approved ways for the tenant to pay rent, like cheque, EFTPOS or direct bank deposit. 

There's a few things to take note of with rent payments. If you're paying in cash, make sure you get a receipt for your rent payment each and every time. And with any electronic transactions, rent is actually considered to be paid on the day that the money leaves your account, so it's not the day that it's received by your managing party or lessor, or it's the day that it leaves your account. 

Host: Yeah, that's really important to remember too, so it's the day you actually pay, right? Now, it's also important to note that rent money can only be used for rent, not water bills or any other expenses, is that right? 

Guest: Yes, that's correct. It is actually an offense to use rent money for any other purpose, like covering the repairs at the end of a tenancy and damages or utilities like water bills throughout the tenancy. 

Host: Now, rent increases are possible depending on whether there's a fixed term agreement in place or periodic agreement or even a new agreement. When can a rent increase occur in these cases? 

Guest: So generally, a rent increase can only occur if it's been at least six months since the last increase or since the tenancy started. And the managing party must also provide two months' notice in writing ahead of the date when it comes into effect. 

If you're on a fixed term agreement, that means the tenancy agreement has a specific end date in the future, there's more criteria before a rent increase can occur. In addition to the six-month time frame and the two-month notice mentioned previously, the tenancy agreement must state in the special terms that the rent will be increased and the new amount or how it will be worked out. If a rent increase occurs when the fixed term agreement is coming to an end, the situation can be a bit different.  

The tenant may be offered a new fixed term agreement at a higher rent amount. If the tenant signs the agreement, the new rent would come into effect at the start date of the new agreement. If the tenant did not sign the new fixed agreement, then the agreement becomes periodic and at least two months' notice would still need to be given for the rent to be increased. 

Host: Yeah, it's really important to know those rules because it can really change depending upon the type of agreement you've got, right. 

Guest: That's right. 

Host: So, do the rules for rent increases differ much then when we look at rooming accommodation circumstances? 

Guest: Well, there are some differences, the main difference being there's no limit to the frequency of rent increases during a rooming accommodation agreement. The accommodation provider is required to provide at least four weeks' notice of the rent increase in writing, instead of the two months for general tenancies. However, the additional requirement of having a clause in the special terms stating the rent will be increased and the new amount or how it will be worked out within a fixed term agreement still remains. 

Host: And if a tenant feels the rent increase is excessive, what can they do? 

Guest: Well, if they feel that rent increase is excessive, we recommend they first discuss the issue with the property manager/owner to negotiate and find a solution. If they still feel it's excessive after that discussion they can apply for dispute resolution with the RTA, once the new agreement is signed. They may also apply to QCAT for a decision. There's time limits within which you have to apply to QCAT, so if you are wanting to dispute an increase, it is important to act quickly.  In making a decision, QCAT might consider the range of market rents out there for comparable properties, the difference between the proposed rent and the current rent, the state of repair of the property, the term of the tenancy period since there was a last rent increase, if any, and anything else that QCAT considers relevant. 

Host: So, when the rent increases, does the bond need to also be topped up? 

Guest: Well, it depends on the circumstances. If rent is increased, the bond may be increased if it has been at least 11 months since the last bond increase or the start of the tenancy. If this is the case, the tenant should receive at least one month's notice in writing to pay the extra bond. And as usual, any extra bond monies must generally be lodged with the RTA. 

Host: So, on the flip side, rent can be decreased under certain circumstances. So, what are some of the reasons for this and how is it put in place? 

Guest: Yeah, so some of the reasons it might be decreased include a drop in standard of the property, the room or the service, a decrease in services provided (e.g. a stove or a shower is not working), a change in the rental market conditions, that might be something like the downturn in the mining industry in particular areas of Queensland. If a property is destroyed or is completely or partially unfit to live in, e.g. part of the roof might collapse in a storm, the property can no longer lawfully be used as a residence, if the property is acquired compulsorily by an authority, so that means that the State Government might be taking away part of the backyard to make way for road works or something like that, or if services, facilities or goods provided to the tenant are no longer available or withdrawn. So, when the property manager or owner and tenant agree to reduce the rent, remember to put an agreed rent reduction arrangement in writing and have it signed off by everyone so it can be part of the tenancy agreement and this should include how much the rent reduction will be, when it will begin and cover all the basics. 

Host: Now, no doubt you get a lot of questions on the phone about rent and bond and time frames and things like that, Peggy. So, if a tenant or managing party has complex rent or bond questions, where can they go to get help?  

Guest: Well firstly, I'd recommend visiting the RTA’s website. There is a wealth of information on there which may cover some of your questions straight away. If you've got more questions and want further clarification, then definitely give us a call on 1300 366 311 and we can give you more information tailored to your specific situation. 

Host: Well, thank you so much Peggy for joining us today and helping us get a greater understanding and what we need to know when it comes to our rights on rent. 

Guest: Thank you. 

Host: Thank you for listening to the Talking Tenancies podcast. For more information about the Residential Tenancies Authority, visit rta.qld.gov.au

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