Top 4 enquiries answered by EAC Legal Helpline

30 May 2023
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The EAC Legal Helpline is a valuable resource for our members, providing guidance on all property-related compliance matters, as well as advice on sales and property management.

To provide our members with better insights, we have summarised the top 4 enquiry topics received by the EAC Legal Helpline which is supported by our legal partner McLachlan Thorpe Partners in the last quarter below:

1. Rental advertising (fixed price & rental bidding)

Seeking advice on: Do residential rental properties need to have a fixed price in the Agency Agreement? Should advertisements include fixed figures? An agency sought advice as they have always used phrases like ‘expression of interest’ or ‘as agreed’ in their Agency Agreements and advertisements. However, a Fair Trading officer pointed out that this does not meet legislative requirements.

Advice given: Yes, as of December 17, 2022, a fixed figure must be advertised for all rental properties. Words like ‘on negotiation’ or ‘as agreed’ cannot be used, and the Agency Agreement should reflect this. It is also important to avoid soliciting rental bidding.

2. Rental increase

Seeking advice on: Can you enter into a new Lease Agreement with increased rent if you want to raise the rent within a 12-month period?

Advice given: The Residential Tenancy Act stipulates that rent can only be increased once within a 12-month period, regardless of whether it is a fixed or periodic tenancy.

If you are considering entering into a new lease with the same tenant, be cautious about using this as a loophole, as it may not be viewed favourably in the courts or by Fair Trading. It would be acceptable if the tenant agrees to modify the lease or enter into a new agreement for the increased rent, but it is unlikely that many tenants would agree to pay higher rent within 12 months of a rental increase.

3. Damage by tenant to property (make good)

Seeking advice on: Are a dirty dishwasher and big black scuff marks left on the walls considered fair wear and tear, or should the tenant rectify them before vacating the property? The property is only 12 months old and was brand new when the tenant moved in.

Advice given: The tenant is generally obligated under the lease to leave the property in a clean state (check the lease clauses), which includes cleaning the dishwasher. This obligation can also extend to cleaning the walls if there are obvious dirt, grime, or dark marks.

For instance, scuff marks on timber floors can be accepted as fair wear and tear since they are high-traffic areas. In this context, scuff marks on the lower walls may also fall under fair wear and tear. However, middle and upper walls are not considered high-traffic areas and should be properly cleaned by the tenant, as they are not ordinary fair wear and tear.

If the tenant fails to clean the property in accordance with their lease obligations, you can have the relevant parts of the property professionally cleaned and try to recover the costs from the tenant/bond.

Agents can refer to an example table of ‘fair wear and tear’ and damage provided by Fair Trading on their website below.  Agents can also get more details provided by Fair Trading on this topic by accessing the Fair Trading website via this link.

4. Termination of Lease – Residential tenancy

Seeking advice on: If both the owner and the tenant have agreed to terminate the existing lease, is it necessary to draw up a new lease to end the lease?

Advice given: There is no need to enter into a new lease. The parties can agree in writing (executed document) to terminate the lease, and then the tenant will be in holding over (month-to-month lease)

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To learn more about our legal partner McLachlan Thorpe Partners and their areas of expertise head to their website.

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