Understanding your lease agreement
A lease agreement or tenancy agreement is a legally binding contract between you (the tenant) and the landlord (the person or organisation who owns the house you will be renting). Sometimes a person will help manage the property on behalf of the landlord. This person is called a real estate agent/property manager. Both the tenant and the landlord’s name must be included in the lease agreement by law, even if the landlord is using an agent.
Different types of Leases – Periodic v Fixed Term
If your lease agreement has an end date written on it, this means that it is a ‘fixed term’ lease. If you sign a fixed term lease, you will be responsible to pay rent under the tenancy agreement until the end date. If you decide to move out before then, you may have to pay the landlord costs for leaving early. Read our factsheet Terminating a Tenancy Early if you are thinking of ending your fixed term lease early.
If there is no end date written on your lease agreement, then it is a ‘periodic tenancy’. This means you pay rent to your landlord in accordance with the agreed payment period. This may be 1 week, 2 weeks or 1 month of rent in advance. You can continue to pay rent and live in the property like this until either you or the landlord decide to end the lease.
What to check BEFORE you sign a lease
Make sure you carefully read over the lease agreement before you sign it. This is very important as you will be bound by what is written in the contract even if you have not properly read or understood it.
Tip – Check the length of the lease agreement. Do NOT sign a 12-month lease if you only want to stay for 6-months. Check whether you can have a pet live with you. Do NOT sign a lease if you want to live with your pet and it does not say you can in the lease.
If you need someone to explain your lease agreement to you or you would like it translated into another language, please contact Tenants Advice Service.
My lease says something different to the advertisement, what do I do?
If there has been a promise made in the advertisement or by the agent or landlord, make sure that promise is written into the lease agreement. If you do not, you may not be able to rely on that promise later.
Example: If the agent promises that the pool will be fixed before you move in, make sure it is written in the lease agreement.
DO NOT SIGN AN AGREEMENT IF YOU DO NOT HAVE EVERYTHING YOU WANT IN IT.
Negotiating Additional Terms in your Lease
There are any number of things that you may want to include in your lease agreement. This can be done in the additional or special conditions section of your lease. Below is a list of 3 common conditions that you may want to think about including in your lease BEFORE you sign it.
- Employment Clause
An employment clause, or ‘diplomatic clause’, can be a useful way to terminate a lease if you lose your job and you cannot afford to continue your lease. You can negotiate with the real estate agent or landlord to have this clause included in your lease so you are not left to pay a lot of money should you lose your job and need to move out.
Many people think that if they lose their job, they will be able to terminate their lease under the hardship provisions found in the Residential Tenancy Act. This is very difficult to do and should not be relied upon as a get out of jail free card.
- Defence Clause
A tenant, who is member of defence force may be able to terminate a fixed term lease without financial penalty if they have a valid ‘Defence Clause’ included in their lease. Typically, if the tenant is posted out of Darwin because of their employment they must provide 30 days written notice to the real estate agent or landlord.
It is important that you read the conditions of your defence clause closely as it does not always allow you to terminate a lease simply because your circumstances have changed. Often you can only use the clause when it is directly related to your employment with Defence.
- Offer of Public Housing
If you think you may be offered Public Housing while you are living in a private rental property, it is important that you include a special condition in your lease agreement that you can terminate the lease without financial penalty if you are offered Public Housing.
You must make sure you advise the agent or landlord that you applied for Public Housing BEFORE you sign your lease agreement.
If you would like to know more about your lease agreement, if you are unsure of anything, or you would like advice about how to include an addition term, please contact our office.
Darwin Community Legal Service 2019: Non-profit community groups have permission to reproduce parts of this publication as long as the original meaning is retained and proper credit is given to DCLS, as the publisher.
Disclaimer: The information contained in this publication is a guide to the law in the Northern Territory. It is not a substitute for legal advice. You should talk to a lawyer about your particular legal issue. The information contained in this factsheet is current as at November 2019.