Legal Introduction for Shared Accommodation
NOVARIC Ltd.
Finding or offering shared accommodation is a fun social interaction, however, a few simple steps can make the whole process a lot simpler and safer for everyone.
Discussing rights and responsibilities as a tenant or landlord can be awkward when moving in with someone you barely know – at times it can even feel like a breach of the trust between future flatmates.
However the opposite is more often true, the best new flatmates are those who are comfortable & happy with their new situation because they know all their rights and responsibilities.
Must dos for all tenants.
1. View the property and meet the House/Flat mates
This is not a legal requirement but its a crucial step. This is going to be your future home! Make sure you know as much as possible about the place and the people you are going to share it with. Inspecting a property and meeting the flatmates is the only real way of getting a real gut feel for what it’s going to be like.
If you are uncomfortable going to an inspection alone, organise to meet your fellow flatmates in a coffee shop for an informal chat or bring along a friend to the inspection.
2. Discuss the details before the tenancy starts
A majority of issues would not have occurred if details of the tenancy had been discussed upfront.
Use our free Pre-Agreement Checklist to make sure you and your new flatmate have covered all the important points before the tenancy starts including:
- Rent including when it is due and how it is paid
- Deposit and how its being held
- Who is responsible for bills and how they are split
- Notice period at the end the tenancy
- House rules and any other relevant details
3. Secure your tenancy
Turning up to find your room has been given to someone else or finding out that your new flatmate has changed their mind (which could mean lost rent!) is a terribly frustrating experience.
4. Payment and collection of rent
Rent in share accommodation is most commonly paid via bank transfer or in cash. If you pay via cash make sure you get a receipt every time.
As a tenant it is your obligation to pay your rent on time and in full otherwise your bond and occupation of the property will be in jeopardy. Make sure to agree how many weeks in advance rent will be collected
5. Give the correct notice when ending the agreement
Before any tenancy starts you should agree on the notice period that either party must give to terminate the tenancy.
Paying Rent
Rent is the money paid regularly by a tenant to NOVARIC Ltd. in return for the right to use a premises.
The residential tenancy agreement will detail the amount of the rent and when it should be paid. The tenant and landlord are free to agree about the amount of rent and when it will be paid. In our case, the rent should be paid every “30th” or “31st” of every month for the upcoming month. The RENT is paid in advance EVERY month!
Paying rent is probably the most important part of the tenancy and the area where issues most commonly arise. People are naturally careful with their money and properties.
RECEIPTS AND RECORDS
Keeping a record of rent payment is a crucial first step for tenants and NOVARIC Ltd. in securing the tenancy and preventing any disputes occurring later.
The receipt should have the following details:
- Date of payment
- Period payment relates to
- Name of person paying the rent
- Name of person receiving the rent
- Amount of rent paid
CHANGES IN RENTAL RATE
NOVARIC Ltd. is allowed to increase the rental rate. If the tenancy is for a fixed term, the agreement must allow for an increase for NOVARIC Ltd. to do so. In most states and territories, the tenant must be given 30 days notice of an increase.
NOVARIC LTD. AND TENANT CAN AGREE TO DECREASE THE RENT AT ANY TIME BY MUTUAL CONSENT.
DEDUCTIONS
NOVARIC Ltd. and tenants have to agree to make payment of rent ‘without deductions’ or ‘free of all deductions’. When these words are used in the agreement, it means that the tenant cannot put-off payment of rent because of a debt owed to the tenant by the landlord.
Bonds & Security Deposits
BONDS ARE PRE-TENANCY PAYMENTS MADE BY TENANTS TO NOVARIC LTD. TO PROVIDE SECURITY AGAINST DAMAGE TO THE PROPERTY OR UNPAID RENT.
A bond, can also be referred to as a Security Deposit, Rental Bond or Security Bond.
It is recommended and common in share accommodation to charge a Bond equivalent to 2 or 4 weeks rent. The maximum Bond allowed varies in each state.
The Bond remains the tenant’s money. While the tenant pays the Bond to NOVARIC Ltd, the money is only held in trust by the company for the tenant. As such, at the end of the lease period the tenant is entitled to a refund for the full Bond amount unless NOVARIC Ltd. can show that any deductions should be made.
To ensure that the Bond payment and holding process is conducted safely and securely, NOVARIC Ltd. possesses a bond deposit for this matters.
REASONS WHY YOU SHOULD ALWAYS CONSIDER THE BOND:
- Penalties – For both tenants and NOVARIC Ltd. there are severe fines for those who fail to conclude the bond correctly.
- Guaranteed Repayment – For tenants, using the system guarantees the repayment of the Bond if there have been no breaches of the residential tenancy agreement.
- Easier to Claim – For NOVARIC Ltd. using the system significantly increases the likelihood of being successful in any claim from the Bond. Courts and Tribunals do not look favourably upon a company who makes a claim on a Bond after not complying with the deposit requirements.
- No Confusion – For both tenants and NOVARIC Ltd. the deposit system is a clear, well understood and transparent process that reduces confusion and the likelihood of disputes arising.
- Efficient – By not working within this well-defined process, both parties risk a longer and more expensive problem.
Tenancy Agreements
Having a written agreement can help prevent disputes which may occur in share accommodation. An agreement eliminates misunderstanding caused by terms not being discussed or that may be forgotten over time.
There is no increased legal flexibility by not signing an agreement because residential property law cannot be opted out of and covers oral agreements as well so its in your best interest to read and understand the agreement.
For the laws on residential tenancies to apply to your agreement, the tenant must be paying rent in return for the right to use the premises. If the premises is provided for free, then the laws on residential tenancies will not apply.
IMPORTANT THINGS TO REMEMBER IN SHARE ACCOMMODATION TENANCY AGREEMENTS?
If the tenant is renting a room or a bed in a share house, it is very important that the agreement detail which parts of the premises the tenant has exclusive possession of, and which parts the tenant has shared use of.
A common situation is for the tenant to have exclusive possession of their own bedroom and shared use of kitchen, bathroom and laundry facilities. By describing in the agreement which parts of the property the tenant does and does not have exclusive possession over, the rights and obligations of all parties are guaranteed.
Download a free agreement & Check list: Share Accommodation’s Agreement