Sometimes landlords write clauses into tenancy agreements that are inconsistent with the law. These types of clauses are unenforceable, even if the tenant has agreed to them. In some cases, where the conditions the landlord is trying to apply are in clear breach of tenancy laws, the landlord’s actions may constitute an unlawful act.
The Tenancy Tribunal treats seriously any landlord who enforces (or tries to enforce) unlawful conditions, and may make an order requiring the landlord to pay exemplary damages to the tenant because they have committed an unlawful act (s 109 RTA).
Conditions in a tenancy agreement may be unenforceable or unlawful because:
- they are different to the requirements of the RTA (except if they favour the tenant, then they are lawful), or
- they try to remove or reduce the tenant’s rights, or
- they direct the tenant to do more than is legally required.
The terms and conditions in the Tenancy Services Residential Tenancy Agreement have all been checked for lawfulness. This is why this agreement is usually the best option for tenants. Tenants starting a tenancy should ask the landlord if this agreement can be used as a template.
What are some common unenforceable conditions?
Below are some common examples of unenforceable conditions that have appeared in tenancy agreements drafted by landlords and property management companies. Also provided are the reasons why these conditions are likely to be deemed unenforceable (and in some cases will constitute an unlawful act). Tenancy Services also has some examples of unenforceable clauses on their website.
General clauses
“This tenancy is not covered by the RTA”
The Act applies to all residential tenancies, including boarding houses, with a few exceptions. Landlords and tenants can’t avoid the requirements of the RTA by including a clause in the agreement stating that the Act doesn’t apply, or by calling the agreement a ‘licence to occupy’ rather than a lease.
“The Property Manager is working on behalf of the landlord and has no direct or personal liability to the tenant under this agreement.”
A property manager is working as a legal agent of the landlord. In some cases, they may be personally responsible for actions that they take, even if the agreement says they aren’t.
“In the event of a dispute between tenants, or with the landlord, the landlord’s decision will be final and binding on all parties.”
Tenants are always allowed to ask that their legal rights be respected, and that any problems be remedied. This could include seeking a remedy against the landlord from the Tenancy Tribunal.
Length of tenancy and termination
“This is a periodic tenancy, but notice to terminate cannot be given in the first six months.”
A tenancy agreement is either fixed term or periodic (ongoing). If it is periodic, then the tenant has the right to give 28 days’ notice to terminate at any time (s 51(2B) RTA).
“Tenants must give more than 28 days written notice to end a periodic tenancy.”
The RTA states that the tenant only needs to give at least 28 days written notice to end a periodic tenancy (s 51(2B) RTA).
“This is a fixed term tenancy for 2 months. The tenancy will be extended for a further 6 months if the tenant passes an inspection.”
Landlords are not allowed to grant a tenancy of 90 days or less, with a promise to extend or renew the tenancy if the landlord decides that they like the tenants. In other words, landlords aren’t allowed to create short “trial periods” (s 7(2A) RTA). See more on short term tenancies.
Rent
"Tenants must pay a letting fee equivalent to one week’s rent.”
Letting fees were banned in December 2018.
“Tenants who are on a benefit must pay rent using MSD redirection.”
Tenants must pay their rent on time, but they can choose how this is paid. The tenancy agreement must state the place or bank account number where the rent is to be paid (s 13(A)(l) RTA).
“The landlord can increase the rent with two weeks’ notice.”
The Act clearly sets out the process for rent increases (s 24 RTA). Increases can only happen once every 12 months.
“The landlord can raise the rent immediately if they find that additional people are staying at the house.”
A landlord can’t simply decide to increase the rent if they find that the tenant has breached the tenancy agreement (s 32(1)(b) RTA).
“If the tenant does not miss a rent payment in the first six months, the rent will decrease by $50 a week.”
“If the carpets are still clean after the first six months, the rent will be reduced by $20 a week.”
“If the tenant mows the lawns, the rent will be $20 less the following week.
The law says a tenant is automatically entitled to any discounted rent rate or other refund/benefit, if the tenancy agreement offers such a rate if the tenant doesn’t breach the tenancy agreement (s 32(2) RTA).
“If the tenant breaks a window / has a party, they will be liable to pay the landlord $100.”
A tenancy agreement must not state a price or penalty that the tenant has to pay if they breach the agreement, including putting them in the position that failure to do something will mean paying a higher rent (s 32(1)(c) RTA).
“If the tenant receives a noise complaint, the rent will be $50 more the next week.”
“If the tenant is late in paying rent, they must pay a $20 overdue fine the next week.”
“If the tenant falls into rent arrears, they must pay the next month’s rent immediately.”
The tenancy agreement must not state that the tenant is liable to pay extra rent, or accelerated rent (future rent), or a particular sum of money if the tenant breaches the agreement. Such clauses have no effect (s 32(1) RTA).
“If rent is not paid on time, the landlord has the right to keep the tenant’s car until payment is made.”
The Act says that a landlord is not allowed to seize the tenant’s belongings for any reason arising from the tenancy, including any issues around rent (s 33 RTA).
Other charges
“The tenant must pay for the cost of a credit check.”
“The tenant must pay a deposit for a lawnmower.”
“The tenant must have contents insurance. (Or, the tenant must pay the landlord’s insurance.)”
“The tenant must pay a monthly admin fee.”
“The tenant must pay all fees and charges incurred by the property manager.”
“The lost key / lockout fee is $50.”
These are all examples of charging “key money”, which is not lawful (s 17 RTA). Key money is basically a charge or fee that the landlord tries to impose, on top of the rent and bond.
“The tenant must pay an admin fee to change or renew or extend the tenancy.”
This is another example of charging key money, which is not lawful (s 17 RTA). Note however, landlords or agents may seek reimbursement of reasonable costs that they incurred if the tenant asked to assign, sublet or terminate the tenancy early (sometimes called “break lease costs” or “break fee”).
They may also charge an “option fee” (up to one week’s rent), to hold the property while the tenant decides whether they want it (s 17(4)(a) RTA). This must be refunded or put towards the rent if the tenant chooses to take it.
“The tenant must pay for meth testing at the end of the tenancy.”
This is another example of unlawful charging of “key money” (s 17 RTA). However, if the landlord decides to do methamphetamine testing, and finds contamination happened during the tenancy, the landlord may seek reimbursement of the testing and cleaning costs from the tenant. The Tenancy Tribunal may agree that the tenant should pay. See more about meth testing here.
“The tenant can have a dog if they pay two weeks’ extra bond.”
A landlord can't ask for a bond that is more than equal to 4 weeks' rent. If the landlord hasn't asked for the maximum bond amount, then a tenant who wants to keep a pet might negotiate to pay bond up to the maximum of 4 weeks’ rent, but a landlord can’t ask for additional bond over and above this maximum.
Cleanliness, health and safety, repairs and inspections
“Carpets must be professionally cleaned at the end of the tenancy.”
A tenant only has to leave the property in a reasonably clean and tidy condition (s 40(1)(c) RTA), so a good vacuum of the carpets is normally all that’s required. If the carpets are visibly dirty or stained at the end of the tenancy, however, the Tenancy Tribunal may agree that they need professional cleaning. Tenants should be wary of hiring a machine to wash the carpets themselves, as these can ruin carpets.
“Tenants cannot smoke anywhere on the premises.”
This clause is unenforceable because it is too broad. It would mean the tenant could not smoke outside, which would impact upon the tenant’s quiet enjoyment of the property. However, a condition that tenants must not smoke indoors is enforceable.
“Tenants must fix or replace things like stove elements, fuses and tap washers as they wear out.”
The landlord is responsible for keeping the property in a reasonable state of repair (s 45(1)(b)).
“Windows must be cleaned once a week.”
“Vacuum once a week.”
“The downstairs bathroom window must be left open at all times to allow steam out.”
“Food must not be eaten in the lounge or bedrooms.”
The tenant is only required to keep the premises “reasonably clean and tidy” (s 40(1)(c) RTA). While cleaning standards differ from person to person, the landlord can’t impose cleanliness rules that are too strict or unreasonable, or that unnecessarily affect the tenant’s quiet enjoyment of the property.
However, some additional conditions that are about cleanliness, health and safety and avoiding damage to the property are lawful, eg, “no pets”. See further examples here.
“The landlord can inspect the property at any time.”
Section 48 of the Act RTA states exactly when and how often inspections can occur.
“Tenants are responsible for dealing with any pest issues.”
“Tenants are responsible for dealing with all pest issues after the first 28 days.”
If the pest issue probably existed before the tenancy commenced, or isn’t caused by the tenant’s uncleanliness, the landlord is likely to be responsible for dealing with the pests, as part of their duty to provide the tenant with a reasonably clean and tidy property (s 45 RTA).
Quiet enjoyment (peace, privacy, comfort)
“No visitors.”
“No parties / No parties without the landlord’s permission.”
“No alcohol.”
“No noise after 11pm.”
The tenant has the right to the quiet enjoyment of the property while they are renting it (s 38 RTA).
A landlord can’t insist that the tenant seek permission whenever they want to do these sorts of activities. The tenant does, however, have a duty not to disturb the landlord’s other tenants. The landlord is required to take action if one tenant is disturbing the peace of another (s 41(1)(e) RTA).
“No overnight guests.”
A landlord is allowed to limit how many people live at a property. They cannot, however, ban people staying for a short time, as this would interfere with the tenant’s quiet enjoyment of the property (s 38 RTA). There is a potential grey area, however, as to when a person is a guest (eg, a boyfriend who stays on the weekends), and when the ‘guest’ is really living there (eg, a family member living there until they find work).
“Any noise complaints from neighbours will result in the tenancy being terminated immediately.”
A tenancy can’t be terminated without notice by a landlord. The RTA has clear rules around when a tenancy can be terminated.
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