Way to go! You’ve placed your ad, held viewings, found some good tenants, referenced them, and are now preparing your new tenant for a move-in to your rental property.
It's easy to think that renting out your property to a new tenant is as simple as handing over the keys and they’re good to go.
In reality, there's a substantial new tenant checklist including legal and functional obligations you’ll need to wrap your head around before your property is given the a-okay.
There’s no shying away from it: being a landlord can involve a lot of work especially in the first stages of renting out your property.
Around 53% of owners who come to us don’t have tenants and prefer to use a property manager due to compliance concerns.
But by making sure you are on top of your legal responsibilities from the beginning, it will put you in a much stronger and secure position from the get-go.
With this in mind, we’ve put together a comprehensive tenant move-in checklist, including things that need to be in place and in order to make sure your property meets regulations and compliance, all ready for tenant move-in.
1. The property has to be clean
So simple, yet so many still get it wrong.
A lot of rental agreements specify that the tenant has the responsibility to clean the property when they move out. Conduct a quick inspection when the old tenant is leaving to see if things are looking neat and tidy.
If they aren't and the tenant won't clean the property, you'll either have to clean it yourself or organise a cleaner to do it for you. That'll be at your or the tenant's expense depending on how well you were covered in the tenancy agreement.
Just don't be that landlord who banks on the new tenant not noticing general grubbiness. At best the tenant is dissatisfied, and at worst they might cancel the tenancy altogether!
2. Make sure your property meets minimum safety standards
An essential item on your new tenant checklist for preparing to rent a property is to make sure your rental is fit to live in and won’t cause any adverse health effects to tenants.
The Residential Tenancies Amendment Act 2018 is your go-to source of truth for minimum safety standards.
Landlords have a legal responsibility to:
- Ensure the property complies with safety regulations - including the installation of smoke detectors and locks on all windows and doors
- Make sure all electrical installations are safe and free of danger (no loose wires or sockets)
- Get a licensed electrician or gas fitter to conduct a safety check every two years
- Treat any potential health-threatening issues such as damp or mould
- Make sure the property has adequate ventilation
- Fit blinds or curtains on every window in the bedroom and living room
3. Check utilities and notify suppliers about the new tenant move-in
Similarly to safety standards, making sure that utilities (plumbing/water, heating, and electricity) are operational and in tip-top shape is a key part of your new tenant checklist.
After all, you don’t want a leaking pipe to create (expensive) damage to your property or create any health hazards for your tenant!
Once all utilities are safe, operational, and free from leakage, let your suppliers know that tenants will soon be occupying the property.
Remember to let your utility suppliers know that your property will become tenant-occupied!
From the first day of the rental agreement, utilities then become the tenants’ responsibility. However, any fixed property fees are your costs and can't be passed onto the tenant, things like:
- Water rates
- Strata levies
- Council rates
A simple way to determine what utilities and bills the tenant is responsible for, is to think: any service where there is a choice of utility provider, is the tenant’s responsibility. In other words, the internet, electricity, gas/heating, or a landline. Anything else is your responsibility.
That is, of course, unless utilities are included in the weekly rent!
You should also keep in mind that during any void period (like a vacancy) in the property, you, as the landlord, are responsible for all the utility bills. This is part of why keeping tenants happy is something all landlords strive for!
4. Screen your new tenant thoroughly
Whilst it isn't a legal requirement, tenant screening can drastically minimise the risk of problems down the line.
By reviewing tenants' previous rental history, credit information, landlord/employer references, and even criminal background, you will have a much deeper understanding of whether they are responsible enough to treat your property well and not fall into any rent arrears.
It's completely up to you what tenant you rent your property to, but making sure tenant screening is complete beforehand will save you from any nasty surprises later down the line.
5. Draw up the tenancy agreement
The rental agreement makes a legally binding roadmap that sets the rules and obligations for both you and the new tenant.
It'll generally always need to include a few certain basics:
- Both names and addresses of you (owner of the property) and the tenant
- The dates of when the tenancy starts and ends
- How much rent is to be paid and how
- Obligations and responsibilities of what the tenant can and cannot do
- Obligations on what the landlord can and cannot do, including certain maintenance and repairs
- Conditions under which the agreement can be terminated and/or broken. Notice period and so on
- Information about the type of tenancy (fixed agreement or periodic agreement)
Each territory and state have their own regulations, so check your respective state's government website and you'll be dodging any legal battles in the future!
Tip: don't sign your part of the agreement until the tenant has signed and agreed to all clauses.
When done correctly, the rental agreement will:
- Protect you from liability
- Prevent any misunderstandings or conflicts that may arise
- Prevent any confusion over rules or obligations
- Describe a minimum set of standards and procedures that you and your tenant must abide by
- Keep expectations clear between you and your new tenant
Remember that it isn't just for the landlord's sake! Your tenant will appreciate full clarity and they'll like seeing that you've got your paperwork in good order.
6. Collect and lodge the bond
Congratulations! Your new tenant has now signed the agreement meaning you are one step closer to officially leasing your investment property.
On the off chance that your new tenant doesn’t adhere to the rental agreement at some point in the tenancy, a bond will be your saving grace.
Bonds act as a security deposit in the event your tenant fails to pay rent or causes damage to your property.
It's not mandatory to collect a bond, but it's highly recommended and most landlords choose to collect one.
94% of landlords choose to collect a bond, and you probably should too.
A good time to collect the bond would be at the point of signing the rental agreement.
As for how much you should collect in a bond, there's different laws and regulations depending on which state you're in.
You can check the rights and obligations of tenants when it comes to bond on these government websites:
- ACT - Office of Rental Bonds
- NSW - Office of Fair Trading
- NT - Department of Justice
- QLD - Residential Tenancies Authority
- SA - Residential Tenancies Fund
- TS - Rental Deposit Authority
- VIC - Residential Tenancies Bond Authority
- WA - Department of Commerce’s Bond Administration Section
After the bond has been collected, it is a legal requirement for both you and the tenant to sign the bond lodgement form prior to lodging it either online or by post to your relevant Rental Bond Authority within ten days.
Once completed, make sure the tenant gets a receipt.
7. Complete an entry condition report
Imagine this: you're conducting a routine inspection and you check on your property to see broken appliances and holes in walls.
If your tenant is claiming they didn’t do it and that it was like that when they moved in, what do you do?
This is exactly why we have an Entry Condition Report.
It gives you a complete record of your property, including all contents and the state the rental is in, prior to tenant move-in, which will save you a world of hassle should a dispute arise between you both.
Tip: the more robust the Entry Condition Report is, the less room there is for disputes down the line.
It's not a legal requirement to have one but it's definitely best practice and makes the move in (and move out) process a lot smoother with minimal delays.
Acting as a rental inspection checklist for tenants, if anything were to happen to the property; you’ll know exactly where to put the finger.
You can read up on the Entry Condition Report Checklist to make sure you've covered all your bases, and how it hangs together with the Exit Condition Report.
8. Make sure the tenant has received all documents before moving in
You’re nearly there! Once all the legal documents have been signed and agreed upon, provide your tenant with all relevant receipts (and documents).
At the start of every tenancy, a tenant should receive:
- A copy of the signed rental agreement
- A copy of the Entry Condition Report, signed
- The Bond Lodgement form
- A copy of relevant by-laws if the property is in a strata complex
- A set of keys
- A new tenant checklist - issues, tasks, and information that should be addressed
If you don't provide copies of these, you'll be in non-compliance according to the Residential Tenancies Act 2010.
9. Understand the rules on rental tax income
You’ve got all your paperwork signed, you’ve met compliance, your tenant has moved in, and now you can kick-back, relax, and wait for your money to come in each month.
With that out of the way, it's crucial you understand the rules on rental tax income.
According to the Australian Tax Office (ATO), all rental money you receive is considered to be taxable income.
That being said, you're able to claim tax relief on a few things such as repairs and maintenance, contents insurance, loan interest, beds, or sofas.
Extra: Re-do this checklist if your tenant wants to break the lease early and transfer to a replacement tenant
Sometimes your tenant needs to vacate the property before the current lease has ended.
Instead of them breaking a 12-month lease six months in, they are allowed to find an alternative tenant to take over the remaining six months of their lease if they so choose.
That being said, it’s not as simple as finding someone else to simply pay the remaining rent for them. What is referred to as ‘assignment’, your tenant is only allowed to transfer (assign) the lease to someone else with your written consent.
A few preliminary steps need to be taken before the transfer of the lease:
- You need to ensure your current tenant has complied with all responsibilities and obligations in the rental agreement to date
- You then need to ensure the new tenant (aka the assignee) can comply with the same obligations. They need to apply for the property as normal with an application form and give all supporting documents for screening.
- Once they are approved, they will need to sign the agreement and bond lodgement form (which will also need to be transferred)
If you're transferring a lease, don't assume that the new tenant will be just as good as the old one. You should conduct background checks and screening just like any applicant. Landlords often assume that the good tenant will recommend another good tenant, but this isn't always true.
Once the relevant documents have been signed, the lease transfer is complete. The old tenant, new tenant, and you (the landlord) should all have receipts and copies of the old and new agreement, and bond lodgement form.
Of course, if you or the tenant doesn't wish to find a replacement tenant, the tenancy needs to be terminated just like usual.
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