Around 26 per cent of Western Australians rent their home. This represents around 200,000 dwellings throughout the state. With the rental market in Perth being tight, more people than ever are renting properties.
Rights and obligations of renters and landlords are governed by the Residential Tenancies Act 1986 (the Act). The Act has undergone many amendments recently, with obligations of landlords increasing considerably.
Further amendments to the Act and the Residential Tenancies Regulations 1989 will come into effect on 1 July 2015. These mainly concern the security of rental premises and will increase the costs to landlords by requiring properties to be in a certain condition. From 1 July 2015, landlords will be required to ensure:
- the front door of the property has a deadlock or a key lockable security screen door that complies with Australian Standard AS 5039-2008;
- external doors of the property are fitted with a deadlock or, if a deadlock cannot be installed, a patio bolt lock, or a key lockable security screen door that complies with Australian Standard AS 5039-2008;
- windows are fitted with a lock, whether or not a key lock, that prevents the window from being opened from outside the premises; and
- an electrical light is installed that illuminates the front entry.
Other changes to the Act which came into effect on 1 July 2013 include the following:
The landlord is not able to pass on the legal costs of preparing a lease to a tenant.
Form of leases
Written tenancy agreements are required to use the Residential Tenancy Agreement Form 1AA. Failure to use this form could result in a penalty of up to $5,000.
Property condition reports
Property condition reports must now be conducted at the start and at the end of a tenancy. Failure to prepare both could lead to a $10,000 fine, or a $5,000 fine for failing to complete either report.
Security bonds must now be held with the centralised Bond Administrator.
On the renewal of an existing tenancy, if the bond is not already held by the administrator, the bond must be transferred.
Option fees required by landlords on the application by a tenant will now be capped.
Where rent is less than $500 per week, the option fee payable will be capped at $50. Where the rent is less than $1,200 per week, the option fee will be capped at $100, and where the rent per week is more than $1,200, the option fee will be capped at $1,200.
The number of inspections that can occur will now be capped at 4 inspections per year.
Expiry of a lease
For fixed term leases, the lease will not automatically expire at the end of the fixed term.
For the lease to finish at the end of the term the landlord or the tenant must give at least 30 days' notice to the other specifying the lease is expiring and setting out the date on which the premises is to be delivered up.
If notice is not given within the required time frame, the term of the lease will be extended for another 30 days.
The amendments made to the Act will increase the costs to landlords. However, the potential costs of not complying will often outweigh the costs of compliance.
For further information about your duties as a landlord of a residential lease, please contact Paul Kordic in our Perth office.
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