Frequency of rent payments
A tenancy agreement must include details about the frequency of rent payments (s 13A(1)(k) RTA). Generally this will be weekly or fortnightly as a landlord can only ask for up to 2 weeks’ rent in advance at the start of the tenancy (s 23(1)(a) RTA). This is in addition to any bond payment which can be up to the equivalent of four weeks’ rent.
Rent is paid in advance
The rent paid in advance is treated as the tenant’s first rent payment. By paying in advance the tenant is effectively ahead of themselves, ie, they pay an amount at the beginning of a period to last them until the end of that period, and then pay again for the next period.
A way to understand this is that it’s like paying money into a parking meter. You pay the money when you park, which covers the period from then until the money runs out. Then you pay again for the next period.
It’s a good idea for the tenant to keep a record of the date of their first rent payment and what period they are paying in advance. Having these details clear at the start of the tenancy will help when it comes to working out the final rent payment at the end of a tenancy.
No further rent until rent already paid is used up
The landlord cannot require a further payment of rent until the ‘paid up’ period has run out (s 23(1)(b) RTA). For example, if a tenant begins a tenancy on 1 March and pays two weeks rent in advance until 14 March, the landlord is not able to require further rent to be paid until 15 March. At this point the tenant will pay rent according to the frequency that is in the tenancy agreement, ie, for the next fortnight in advance from 15 March until 28 March.
If the landlord breaches these requirements, this is an unlawful act and the Tenancy Tribunal can award exemplary damages up to a maximum of $1,500 (s 23(4)(a) RTA), Schedule 1A RTA). The landlord also commits an infringement offence and is liable to pay an infringement fee or fine (s 23(4)(b) RTA, Schedule 1B RTA).
Case study
The tenant started her tenancy on a Wednesday, paying one week’s rent in advance for the rental week of a Wednesday to Tuesday. The landlord considered her rent to be due on a Thursday for payment through to the following Wednesday. Because the tenant’s weekly payment only took her through to the Tuesday of each week, the landlord’s computer system treated her as being in arrears. The tenant was harassed by the landlord with phone calls and text messages asking her to pay an extra day’s rent.
The Tenancy Tribunal decided that the landlord had breached the requirement that they not require the next rent payment before rent already paid expires, and that this was intentional because the rent record clearly showed the tenant was paying on a Wednesday for a Wednesday to Tuesday rental week. Because of this, and the way the tenant was harassed, they awarded exemplary damages of $340. This was at the low end of exemplary damages because it was not considered to be the usual behaviour of this landlord.
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