How to Prepare a Private Rental Agreement

Renting out your property privately is an exciting step—you’ve done the prep work, found a tenant, and best of all, you're saving money by handling things yourself! Before the lease officially begins, there’s one crucial task left: drafting your private rental agreement.

While it might seem daunting, the process is straightforward. Think of it like following a recipe—just take it step by step!

1. Use a Template That Fits Your State’s Legal Requirements

Every private rental agreement must comply with state-specific legal guidelines. Typically, these agreements don’t differ much from those used by real estate agents. Reviewing an example contract will give you a solid idea of how yours should look.

However, rental laws vary between states and territories, so it’s essential to use a template suited to your location. A quick online search can help you find one, or you can check state-by-state rental guides to ensure compliance.

2. Understand What to Include (and What You Don’t Need)

Drafting a tenancy agreement might feel overwhelming, but rest assured, some key terms are automatically included under Australian tenancy laws. That means you don’t need to explicitly state them in your contract.

What You DON’T Need to Include:

Certain terms are implied by law, meaning they apply automatically and don’t need to be written into the lease. These include:

• The landlord must handle essential repairs as needed.

• The tenant must allow access for necessary repairs.

• The tenant must treat the property with care and use appliances correctly.

• The tenant is entitled to live undisturbed by the landlord.

Even if these aren’t listed, Australian rental laws will still protect you in case of breaches.

What You DO Need to Include:

Your private rental agreement should explicitly outline:

• The agreed rent amount and payment method.

• The process for rent increases.

• Lease duration.

• Bond amount and how it will be held.

• Any special conditions (e.g., pet allowances).

Laws differ across states, so be sure to check local requirements.

3. Choose Between a Fixed-Term or Periodic Lease

The type of rental agreement you choose depends on your long-term plans for the property. Here's a breakdown:

Fixed-Term Tenancy

• Lasts for a set period (e.g., 12 months).

• Rent increases can be scheduled (typically every six months, but state laws apply).

• Provides financial stability, ensuring consistent rental income.

• The lease automatically converts to a periodic agreement unless renewed.

• Termination requires the tenant’s agreement or a breach of contract (e.g., unpaid rent).

Periodic Tenancy

• Operates on a month-to-month basis.

• Either party can end the lease with written notice (notice periods vary by state).

• Offers flexibility—ideal if you plan to renovate, sell, or move in soon.

• Rent increases require notice, following legal requirements in your state.

TLDR:

• Fixed-term leases provide stability—great for budgeting.

• Periodic leases offer flexibility—easy to adjust as needed.

4. Review & Sign the Rental Agreement

Since your rental agreement is legally binding, it’s crucial that it’s well-drafted and error-free. Consider the following before signing:

• Proofread—check spelling, grammar, and formatting for a polished finish.

• Take a break before reviewing—return to the document with fresh eyes.

• Ask for feedback—a second opinion can help spot overlooked errors.

• Ensure all express terms are included—implied terms will apply, but missing express terms won’t be legally covered.

Once satisfied, sign and date the agreement, then send it to the tenant for their review and signature. Be sure to answer any questions they have before finalizing. The signed agreement should be returned before you hand over the keys.

Final Thoughts

By following these steps, you’ll confidently prepare a solid private rental agreement. If you need extra reassurance, consult a solicitor for professional advice.

Once signed by both parties, you’re officially set to start your tenancy arrangement!

If you’re interested in renting your home privately, visit salebyhomeowner.com.au for more resources and guidance.

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