When renting, renewing your lease is a step that you will have to take, sooner or later. To help you in your rental journey, here are some answers to the most common questions in regard to renewing your lease to ensure that the process is much smoother for all parties.
Types of Tenancies
In Western Australia, there are generally two types of tenancies known commonly as: “fixed-term” and “periodic”.
What are the differences between them?
Basically, a fixed-term tenancy is a lease between you (the tenant) and the Property Owner (the Landlord) specifying an agreement to rent the property for a specified period. This offers security for both the landlord and tenant. The landlord has comfort that the property is leased and rent paid for a set period and the tenant has the comfort of knowing they have a home for that period. The only way the tenancy can be terminated is if rent isn’t paid, the property becomes unhabitable or a condition of the lease is breached by the tenant and not rectified.
While fixed-period literally “fixes the period” of the lease agreement, periodic tenancy means a lease where there is no fixed period. So, you could occupy the home until either party gives the appropriate amount of notice. No renewal of the lease is required as it continues until notice is given.
Whilst having a periodic lease could be convenient for Owners and Tenants, there is little security offered to either party. Tenants can give a minimum 21-day notice to terminate while the Owner has to give, 60 days.
It is important to note that all written tenancy agreements must use the prescribed Residential Tenancy Agreement (Form 1AA). Thereafter, you ought to be provided with a copy of the written agreement and after signing, another signed copy (containing both the signatures of the Owner and Tenant), within 14 days.
In addition, you should also be furnished with “Information for Tenants” sheet regardless of how the agreement was made – verbally or in writing.
For further information: https://www.commerce.wa.gov.au/consumer-protection/rental-agreements
How to Renew a Lease
Periodic Lease
On a periodic lease, there is no need to renew the lease. Instead, the periodic lease just continues based on the specified terms and conditions as stipulated in the original lease. This will continue until you or the Property Owner decides to terminate the lease by giving the appropriate notice.
There is a difference in regard to the periodic lease notice period for Tenants and Property Owners.
As tenants, you are only required to give 21 days’ notice in writing, whereas Landlords are required to provide a 60-day notice to end the lease.
Fixed Lease
Under a fixed-term arrangement, it would best practice for you to contact your landlord/property managers two to three months prior to the lease ending to indicate your intentions. It is likely that if an agent is involved, they would have contacted you already to help prepare you and the Owner in this process.
Should you both want to renew the lease with no change in rent or the terms of the lease, it is essential that you have this in writing.
However, if either of you want to make a change to the terms of the lease, for instance, an increase or decrease in rental (this must have been discussed before the end of the previous agreement), then the new lease will reflect the changes.
Don’t want to renew your lease?
Periodic Lease
You must give your landlord the appropriate 21 days notice if you do not want to renew the lease.
Fixed- Term Lease
If you are letting a fixed-term rental, you need to give notice at least 30 days before the current rental period expires.
There are also other avenues towards terminating a lease, such as mutual agreement, landlord’s breach of tenancy agreement or destruction of the property. Talk to your property management agency if you find yourself in that situation.
For more information about ending leases, visit
https://www.commerce.wa.gov.au/consumer-protection/lessor-ending-tenancy
Rent Increases
Periodic Lease
Your rent can only be increased once every six months. In addition, you must be given a minimum 60-day notice of the new rent rate for all leases that are periodic in nature.
Fixed-Term Lease
However, with a fixed-term lease, the method of increasing rent is usually set out in the original agreement. The most common method of rent increase is typically either by percentage or fixed amount. It is advisable that Tenants review their leases and know what the rent increase clause stipulates.
With a new fixed-term renewal agreement, the rent increase can only start 30 days into the new lease. The first 30 days must be at the old rate.
If you wish to know more, we encourage you to visit: https://www.commerce.wa.gov.au/consumer-protection/tenant-ending-tenancy
In conclusion, while lease renewals may seem straightforward on the outset, there is complex legislation to ensure that all parties are treated fairly and that the transition is managed smoothly between tenancies. Keeping yourself informed will provide confidence and help you to maintain your peace of mind during this transitional period.
NB:
The information given in this article is applicable to WA and might differ for other states. Visit https://www.commerce.wa.gov.au for the latest updated legal information on Lease Renewals.
The Residential Tenancy Act effective underwent changes on the 1st of July 2013. If you started renting before then, the old law may apply to you. In this case, this information may not be applicable, and we recommend that you seek appropriate legal advice.
