CONDITION REPORTS AND THE IMPACT ON SIGNING UP A NEW TENANCY AGREEMENT
* The landlord/agent must issue the condition report before or when the Residential Tenancy Agreement is given to the tenant for signing.
* This will impact on when the tenant can sign the agreement. If the property is currently tenanted, the tenant must have vacated the premises, allowing us to conduct the final inspection to be able to complete the new condition report, before the new incoming tenant can sign the agreement.
* There are new provisions in the Act relating to the monies that can be taken from a tenant at the commencement of a tenancy.
LEASE PREPARATION FEES
* We can no longer charge the tenant a lease preparation fee.
* The maximum bond you can now request from a tenant is equal to four weeks rent, even if the property is furnished. You can no longer ask for six weeks bond.
* You cannot take a bond from the tenant until the tenancy agreement has been signed.
If the rent is increased during the term of the agreement we cannot top up the bond.
* Only one bond can be taken on a tenancy.
RENT IN ADVANCE
* You cannot request more than two weeks’ rent in advance from a tenant.
* Rent can be taken for a new tenant prior to signing the tenancy agreement, however, if the tenant changes their mind and decides not to proceed we are required to refund money receipted as ‘rent’.
* There is a provision to take a holding fee to secure the property for the tenant at the commencement of the tenancy.
* The holding fee can be no more than one weeks rent.
* For the landlord/agent to take a holding fee, the application must be approved and the property removed from the market.
* The property must be held for seven days (or greater if agreed by all parties)
* If the tenant changes their mind and decides not to proceed, the holding deposit is forfeited to the landlord.
* Our agency will be taking holding fees to assure owners of at least one week’s rent should the tenant change their mind.
The new legislation does present some challenges in the process of securing a new tenant.
- You can only take one week’s holding fee, and
- You cannot enter into a binding tenancy agreement until the current tenant has vacated.
This could result in possible lost rent should the tenant change their mind, resulting in our agency having to re-advertise the property.
FREE RENT PAYMENT OPTION
* Every tenant must be given at least one free option to pay rent (other than bank fees usually payable for the tenant’s transaction).