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Rent is the money that the agreement states must be paid by the tenant or resident so that they can stay at the premises they are renting and use the service and facilities provided. The agreement will state if the rent is to be paid weekly, fortnightly, monthly or at another agreed period.
The rent is paid to the landlord or agent, an owner or operator of a rooming house (a building where one or more rooms are available for rent, and four or more people in total can occupy those rooms) or caravan park, or a site owner. The parties involved should agree upfront how and when the rent is to be paid. Rent may be paid:
- in person
- using cash
- using direct debit or funds transfer
- by credit card, cheque, or another method, including rent payment card.
If a landlord or owner requests payment by direct debit, they must state this before the tenant or resident signs the lease.
You must pay the rent when it is due and using the method agreed.
Fees or fines for late rent
It is illegal for a landlord or agent to charge any sort of ‘administration’ fee’ or ‘late fee’ to process rent payments, even if the rent is late or in arrears. However, they may be able to recoup a dishonour fee imposed by a bank. Landlords or agents cannot:
- charge tenants ‘administrative’ or ‘late’ fees if they fail to pay their rent on time. Doing so is illegal, even if the rent is in arrears
- apply or include late payment fees as clauses within leases. If such clauses have been included as part of a lease, they are void.
For example, a landlord or agent advises you that you will be charged an additional $10 if your rent is three days late, and $20 if it is more than three days late. This practice is not allowed.
See new temporary renting rules at Coronavirus (COVID-19) Victoria.
An ‘incentive’ clause (to encourage prompt payment of rent) is acceptable, provided the amount charged for not paying on time does not exceed the sum stipulated as the rent amount in the lease.
For example, you agree to rent a property for $300 per week. The lease may state that if you pay your rent on time, you are entitled to a discounted rent of $280. If you do not pay your rent on time, you must pay the full amount of rent for that period – $300. The amount you are required to pay if the rent is late cannot be more than this figure.
It is in both parties’ interests:
- to ensure such an arrangement is written into the lease, and
- when an agent makes an offer, they have the landlord's permission before doing so.
Rent in advance in a tenancy agreement
If the rent is to be paid weekly, the landlord or agent cannot ask for more than 14 days’ rent at the beginning of a tenancy.
In any other case, provided the rent is $350 a week or less, the landlord or agent cannot ask for more than one month’s rent in advance.
The landlord or agent may be fined if they do not follow the above.
If the rent is more than $350 a week, the landlord can charge rent in advance for the full term of the lease (unless the lease term is more than five years).
Rent in advance in a caravan park
In a caravan park, rent is the money charged for the site. Hire charges are for a caravan.
Residents are often asked to pay one fee for both the site and the caravan, which is then called rent.
The owner cannot charge more than:
- 14 days’ rent in advance for renting the site
- 28 days’ rent in advance for caravan hire.
A caravan park owner or caravan owner can be fined if they do not follow the above.
Rent in advance under a site agreement
Rent is the money charged for a site in a park. A site owner cannot charge a site tenant more than one month’s rent in advance.
Extra rent for services in a rooming house
If a rooming house owner offers services such as cooking and room cleaning at an additional cost, they must give the resident a list of the services offered and costs before they move in.
If the resident accepts these services and agrees to pay the extra rent, the owner must put in writing:
- a description of the extra services
- how much the rent will increase
- the date the rent increase will start.
The owner and resident must both sign the agreement.
Extra charges in a caravan park
In addition to their rent, caravan park residents may need to pay other charges.
The owner must give residents details of these charges at the start of the residency.
The caravan park owner must give the resident a statement setting out:
- extra rent or hiring charges for visitors as set by the caravan park owner or caravan owner
- any fees the caravan park owner may charge to store or remove a caravan
- commission applying to the sale of a caravan by a caravan park owner
- any fees for giving a resident a key to provide vehicle access to the caravan park.
Extra charges under a site agreement
In addition to their rent, site tenants may need to pay other charges. Details of these charges must be included in the site agreement and site owners must not ask for payments that are not part of the site agreement.
A site agreement should:
- include details of all charges to be paid
- include how payments are calculated, their purpose and how they may be changed or reviewed
- provide details of any commission an owner may charge for selling the site tenant’s dwelling.