Renting a property
FOR PEOPLE LOOKING TO RENT PROPERTY
Many people Rent property rather than purchase. Many companies and businesses rent commercial property rather than own their own. Renting property is a process that can become difficult. It is also a process where people can make mistakes. It is very important to do this properly and seek advice from experienced professional people to ensure that you do not end up with difficulties. This brochure which is produced by the Real Estate Industry Association Inc is designed to assist people by making them aware of some of the more important aspects of renting a property.
LOCATE A PROPERTY
The first thing is to locate the property. The best way to do that is to obtain the assistance of a real estate agent. You can ask any real estate agent to help you however we would recommend that you use a member of the Real Estate Industry Association because he has pledged to abide by the Code of Ethics of the Association. A copy of the Code of Ethics is available on request from any member’s office. Once you have selected a real estate agent he will assist you with locating a suitable property for you.
Insist on a Tenancy Agreement or Lease over the property that you are to rent. A lease drafted by a lawyer is the best document to have because it covers all contingencies. You will usually be required to pay for the preparation of the lease by the lawyer as well as stamp duty on the amount of rent payable over the period of the lease. A tenancy agreement is a basic agreement that many property owners use to highlight the main terms for renting a property. You are not required to pay for preparation of a tenancy agreement. It is not a legal document and is not as specific as a lease but it does specify some of the responsibilities of the tenant and the property owner. It is best to have something in writing to clarify the terms of the tenancy. The real estate agent can help you here.
A bond is payable by the tenant to the real estate agent before you are given possession of the property. The bond is often equal to the rental payable for the property for one month however the amount of bond payable may be more or less than this depending on the requirements of the property owner. In most cases the bond is held by the real estate agent in his trust account. Sometimes the owner might hold the bond. As the real estate agent is only acting as agent for the property owner then the owner is entitled to hold the bond if he wishes. The bond is held to cover any outstanding rental or costs for damages, unpaid utilities etc. If there is nothing owing at the end of the tenancy then the bond is refundable in full. If there are moneys owing then all or part of the bond will be used to cover these. If any monies remain after the amounts owing are settled then the balance will be refunded.
The lawyer acting for the seller will prepare the Contract for Sale. You will need to engage a lawyer to look after your interests. You will have to pay a fee to your lawyer for acting for you. Your lawyer will be able to give you a quote for his fees before he starts to act for you. Ask for your quote in writing. Advise your lawyer of any special conditions related to the purchase especially if you require finance to help purchase the property otherwise you might not be able to get your deposit back if the purchase doesn’t get completed.
NOTICE TO TERMINATE
If you wish to terminate the rental and your lease or tenancy agreement enables you to do so then in most cases you will be required to give one month notice in writing of your intention to terminate the rental. If you are paying rent monthly then one calendar month notice means that the rental will cease at the end of the month following the current month. One calendar month notice is not 30 days from the date on which the notice is given.
If the owner of the property that you are renting is GST registered then you will be required to pay GST on the rental.
In most cases where the rent is being paid on a monthly basis the rent is due and payable on the first day of the month. If your lease or Tenancy agreement specifies that rents are payable in advance then if the rent is not paid on the first day of the month then you are in breach of the agreement. It is normal for rent to be payable in advance rather than in arrears.
IMPROVEMENTS / ALTERATIONS
It is usual for tenants to obtain approval for any improvements or alterations that they want to undertake in the rented property in advance of undertaking the work. It is also usual for the owner to have the option to require the tenant, at the tenants expense, to return the property to its original condition at the end of the rental period or to keep the alterations / improvements at no cost to the owner.
MAINTAINING THE PROPERTY
In most cases the owner is responsible for maintaining the structures and ensuring that they are safe. The tenant is normally required to keep the property clean both inside and outside for most properties except where there are multiple tenants eg blocks of units and in these cases the owner is responsible for the exterior and common areas.