Six Things You Should Know Before Signing a Rental Agreement

Quick summary

• Rental agreements are a commitment that renters should understand inside and out before they sign. Knowing how to inspect a property and interpret a tenancy agreement can help renters avoid signing a lease that isn’t suited for them.
• Leo Patterson Ross, the CEO of Tenants’ Union NSW, recommends tenants have a clear idea of what kind of property they want, inspect the property carefully for signs of damage and check real estate websites for how regularly the property gets leased out.
• Budget Direct’s renters insurance can protect your contents from a range of insured events and potentially protect from legal liability claims made against you.

Moving into a new home can be an exciting time, especially for first-time renters moving out of their parents’ home. For many people, it means learning how to pay for your own expenses, living with housemates, and styling your room in a way that best suits you. However, that also means learning the sometimes overwhelming steps and responsibilities that come with renting an apartment or house. What’s a bond? How do I fill a condition report? What should I look for when I inspect a rental property? Arming yourself with knowledge is one of the most effective ways to side step renting pitfalls.

To learn more, we spoke with Leo Patterson Ross, the CEO of the Tenants’ Union NSW, to understand what first-time renters need to know.

1. Inspect the property in person

First impressions are important from two perspectives: the rental agent taking note of their potential new client, and you as the would-be renter checking that the property is up to scratch.

Before you enter a property, Patterson Ross recommends having a clear list of ideas of things you want. For example, you may want to consider:

• Do you need air conditioning or are ceiling fans enough?
• Do you need a bathtub or are you fine with just a shower?
• How many sets of stairs are a deal breaker?
• Do you prefer carpet, vinyl, or hardwood flooring?
• Do you need a garage or can you make do with street parking?

Warning signs: Keep your eyes peeled

Patterson Ross recommends asking the agent questions about the building’s history, including whether it has undergone recent repairs or suffered flood damage. He also suggests keeping an eye out for freshly painted surfaces and asking why they were touched up.

“Freshly painted properties might just be freshly painted,” he says. “It might … also indicate that there had been mould, leaks or other problems that the paint is covering up.”

Patterson Ross also says to trust your nose. Any “musty” odours could indicate mould or water pooling issues.

You should also aim to check:

• Cracks along the walls
• Shower water pressure
• If the garden is maintained
• If all appliances are working
• The location of the washing machine
• If the property has your preference for air conditioning or overhead fans
• The location of powerpoints
• The property’s NBN connection type
• If there are any traces of mould
• Any animal droppings or other evidence of vermin
• How close the property is to public transport
• Whether there’s paid or ticketed roadside parking, or on-site visitor parking

Don’t forget to take pictures to record any concerns or features you don’t want to forget about that property.

Patterson Ross also recommends checking how often the address has been rented on a website like realestate.com.au. High turnover could indicate a problem with the house or that renters are being evicted regularly.

2. Read the residential tenancy agreement

What happens if you need to break your lease 6 months early? Who’s responsible if your rental has an ant infestation when you move in? What if you inherit your family dog?

Your tenancy agreement is a contract that outlines the conditions of your tenancy. Once you’ve signed, you’re legally obligated to adhere to the agreement.

Details to double-check:

• The cost of rent
• Whether you’re paying weekly, fortnightly or monthly
• The expected payment method
• The length and type of tenancy (fixed-term tenancy vs periodic tenancy)
• The cost of the bond
• Pet clauses
• Any advanced rent that needs to be paid at the start of the lease
• Conditions and cost for breaking a lease early
• Maintenance responsibilities
• Strata bylaws, if living in a strata complex

If you’re unsure about the definition of a term in your lease, or whether a term is consistent with your state’s Tenancy Act, you can contact your local tenancy authority. These bodies exist to protect the rights of both landlords and tenants. You can contact them to get renter information and settle disputes with your landlord.

See the table below if you want to know more about some of the specific rules for your state and territory:

* In these states, body corporate/owners corporations are allowed to have blanket bans on pets that can override landlord approval. Check applicable strata rules before filing an approval form for a pet in a strata building.

3. Understand the bond

A bond is a safety deposit lodged by the renter with their state’s tenancy authority at the beginning of their lease. The bond, which is generally capped at four weeks’ rent, exists to give the landlord financial protection in case a tenant owes rent at the end of their lease or damages the property and is separate to any rent that is paid in advance.

At the end of the lease, assuming you have met all of the conditions of your rental agreement and left the property clean and undamaged, you should get the bond deposit back.

4. Complete the condition report thoroughly

The condition report is one of the most important forms you receive during your tenancy. It has the potential to save — or cost — you thousands.

A condition report is a document that notes the state of the property when you first move in. Its goal is to keep track of all existing damage or issues within the property. The report can be used as evidence in disputes over cleaning, damage, or replacing items at the end of your lease.

Usually in the first week of their tenancy, the tenant provides written descriptions or pictures of each room within the property. It’s here that you note the condition of parts of the home, including any damage to walls, doors, floors, and fixed appliances of the premises.

It’s important that regardless of the format in which you submit your form, you also keep a copy and images for your own personal records.

“The condition report is for you to record your observations. If they are not the same as the agent’s … make sure that you have a record,” Patterson Ross says.

5. Know your rights as a tenant

Urgent vs non urgent repairs

When a core part of your rental property breaks or malfunctions, it’s time to lodge a maintenance request to get it fixed.

Repairs are classified under two main categories: urgent and non-urgent repairs. A repair is classified as urgent when it poses an immediate risk to the health and safety of tenants or the condition of the home. These can be a burst water service, a serious roof leak, failure of a cooling/heating system, a gas leak, or a serious electrical fault. Meanwhile, non-urgent describes repairs that aren’t as high a priority, such as small holes in a fly screen or a bedroom door that won’t close properly.

It’s important to understand your responsibilities when emergency repairs are needed. First, you will need to contact either your landlord or property manager immediately — this is a legal requirement across all states and territories. If you can’t reach them, check your tenancy agreement for a nominated repairer. If none is listed, you can arrange repairs yourself and seek reimbursement, though the amount you can claim varies by state and territory. In all cases, keep written records of your communication and repair expenses.

Minimum standards

The phrase “minimum standards” refers to the quality of housing rental properties need to be considered fit for tenants to live in. These vary slightly from state to state, but generally, they involve:

• Being structurally sound and weatherproof
• Adequate ventilation
• Access to electricity and water
• Working plumbing
• Working security locks

As minimum standard definitions can be different depending on each state and territory, you may find it helpful to consult your applicable tenancy authority.

6. Protect your belongings with Renters Insurance

As a renter, you are solely responsible for protecting your possessions. By getting Budget Direct’s Renters Insurance, you can cover your belongings against a range of insured events and protect yourself against potential legal liability claims, as well as other additional benefits. For example, temporary accommodation covers the costs above your usual rental expenses if the property you’re renting becomes unliveable due to an insured event and you need to live somewhere else (like another rental or a hotel). You may also:

• Be paid up to $1,000 to replace stolen keys, locks, and key codes.
• Be covered for up to $20 million in legal liability for death or physical injury to other people, or for loss or damage to other people’s property caused by an accident.

You can use our contents insurance calculator tool to help estimate the cost of replacing your contents, also known as your sum insured amount.

Get a head start on covering your contents — get a quote online and save 15%^ on renters insurance on your first year’s premium.

Your pre-signing checklist

Before you sign anything, run through this checklist to make sure you’re prepared for life in your new rental:

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