What is a pre-lease tenancy agreement?

Published 18 Dec 2018

Moving doesn't have to be stressful. If you know your tenant obligations when agreeing to rent a property and address any problems with the lease before signing the contract, the process is simple. To make taking a tenancy up even simpler, here is a quick guide to pre-lease tenancy agreements - what they are, how they work and your legal rights.

What is a pre-lease tenancy agreement?

A pre-lease agreement is a legal settlement made between the landlord and future tenant(s) specifying that certain conditions will be observed before a formal tenancy is signed. This arrangement should be made in writing and signed by both parties, to protect the terms of agreement. Breach of this settlement can void a commitment to signing a lease agreement, although often does not incur further financial penalty to either party.

The terms of this legal arrangement are entirely up to the landlord and tenant, and should be drafted with the help of an expert property law solicitor.

What is a pre-lease arrangement used for?

Tenancy agreements are universally required to carry certain stipulations in NSW, such as the amount of rent to be paid on a periodic basis and landlord's safety obligations. A pre-lease document, meanwhile, allows for flexibility when moving into a new property.

The NSW Residential Tenancies Act 2010 specifies that landlords can only ask tenants to pay the following upfront costs:

  • A holding fee.
  • A certain amount of rent in advance.
  • A bond, to be processed through the state Rental Bond Board.

A pre-lease agreement is a protective measure that helps tenants get value for money from these immediate costs. For example, the settlement can be used by tenants to arrange for improvements prior to handing over a bond or to specify the terms of the holding fee. This is useful if a tenant wishes to move into a property that requires immediate maintenance work, such as recovering flood damage or replacing carpets. The property can be held within a legal agreement for the tenant to move into until the repairs are carried out.

A pre-lease tenancy arrangement can also be used to determine a move-in date and keep the property off the market during a specific period of time. Examples of this use includes if:

  • The landlord is going on a holiday.
  • The tenant needs time to relocate.
  • The property is being vacated.

Why should I seek the help of a property law expert?

Following all the proper procedures when taking up a new residential tenancy is crucial to avoid being stung by poor lease terms or unfair costs. A solicitor can help you look over legal documents and ensure your rights are protected. At Malouf Solicitors, we have a dedicated team of experts to help with any legal enquiries. To lodge yours, reach out to us today.

Please call us on 02 8833 2000 to speak with a lawyer

Dear Anthony & Kym. Thank you for all your help and support in our matter. It is a big relief to us that it is over. Please also thank your staff, Myla and Lina etc for all their help. It has been a pleasure working with you all, the subject matter notwithstanding. With best wishes and regards,
Nick of Parramatta

Parramatta Office:

Level 5/146 Marsden Street
Parramatta NSW 2124

PO Box 945
Parramatta NSW 2124

Phone: 02 8833 2000
Fax: 02 9687 3697

mail@maloufsolicitors.com.au