Rent payments and rent in advance

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A rental agreement (lease) must state how much the rent is and how often it must be paid.

Rent must be paid to the rental provider, who might be an agent or an owner, a site owner, or an operator of a rooming house or caravan park.

Rent must be paid by renters according to the rental agreement. Rental providers must provide a range of payment methods to help renters do this.

There are rules about requesting rent in advance, providing receipts, and requesting additional fee payments from renters.

On this page:

Other pages have information about late or unpaid rent, rent increases and challenging a rent increase.

Methods of payment

The renter and rental provider should agree on how rent is to be paid before they start the rental agreement.

Before they agree, the rental provider must tell the renter about any costs they will have to pay for the method they have chosen.

The rental provider must:

  • provide at least one payment method where the renter doesn’t have to pay a fee (other than the renter’s own bank fees)
  • allow the rent to be paid via the Commonwealth ‘Centrepay’ bill paying service or another form of electronic funds transfer
  • make the renter aware of any fees that may be incurred by using the agreed payment method (such as dishonour fees)
  • not require the renter to pay by cheque with a date in the future on it (a post-dated cheque).

Neither the renter or the rental provider can ask the other to pay them back the costs of setting up accounts to make or receive rental payments, or for expenses related to making or receiving payments (such as bank fees).

Any changes to how rent is paid must be agreed between the renter and rental provider.

Illegal fees and charges

The rental provider cannot charge fees or fines for:

  • issuing a rent payment card
  • establishing or using direct debit facilities
  • processing rent payments
  • late payment of rent.

Rental providers cannot add clauses to rental agreements that say these kinds of fines or fees must be paid. This is illegal.

How often and when to pay

The rental agreement states whether the rent will be paid weekly, fortnightly, calendar monthly or at another agreed time. Once a rental agreement has started, rent is due on the agreed date by the agreed payment method.

Renters paying by electronic funds transfer should leave enough time (at least 24 hours) for the money to go into the rental provider’s account, otherwise the rent may be considered late.

Charging rent in advance

When a renter starts renting, they are usually required to pay rent in advance before they can move in. There are rules for how much advance payment a rental provider can ask for.

A rental provider can ask for a maximum of one month’s rent in advance, unless:

  • rent is paid weekly, in which case they can only ask for 14 days’ rent in advance
  • the rent is above $900 a week, in which case there are no limits up to the full value of the rental agreement.

Rent in advance in rooming houses, caravan parks and residential parks and villages

Special rules apply to rooming houses, caravan parks and residential parks and villages that have Part 4A site agreements. Find out what kind of properties fall under Part 4A site agreements. The rules say:

  • rooming house operators cannot charge more than 14 days’ rent in advance.
  • caravan park owners cannot charge more than 14 days’ rent in advance for site rental.
  • caravan owners cannot charge more than 28 days’ hiring charge in advance for caravan rental.
  • Part 4A site owners cannot charge more than one month’s rent in advance.

Stopping rent payments

Renters must not stop paying rent until they agree with their rental provider on a date to stop. Renters must keep paying rent even if:

  • the rental provider or owner refuses to do repairs
  • it is the last month of the rental agreement
  • they have given notice to end the rental agreement and leave the property
  • they have received a notice to vacate.

Offering incentives for early payment

A rental provider can provide an incentive to encourage renters to pay on time.

For example, an agreement where the rent is $300 per week might include a clause that the renter can pay $280 if the rent is paid on time. If the renter does not pay on time, they can only be charged the full amount ($300) and no more.

Incentives should be written into the rental agreement. Rental provider representatives, such as real estate agents, should ask for the owner’s permission before offering incentives.

Providing rent receipts

Rental providers, or their agents, must provide renters with receipts for rent payments:

  • immediately if rent is paid in person
  • within five business days of a request.

Rental providers must also keep rent records for at least 12 months.

A receipt must contain:

  • the rental provider’s name and signature
  • the property address
  • the payment date
  • what period the payment was for
  • how much was paid
  • a clear statement that it is a rent receipt.

Rental providers can be fined for not following the rules for rent receipts.

Renting law reforms

Victoria made significant changes to renting laws in 2021.

Some of the major changes to laws about paying rent include:

  • the rental provider must provide at least one reasonably available fee-free method of paying rent (not including any bank fees or account fees on the renter’s bank account)
  • the rental provider must allow the renter to pay rent using the Centrepay bill paying service
  • the rental provider cannot charge more than a month's rent in advance unless the rent is above $900 a week. 

Some language also changed:

  • landlords are now called rental providers
  • tenants are now called renters
  • leases are now called rental agreements.

You can read about these and other changes in a summary of the reforms or in detailed fact sheets and guides.

Sections of the Act

If you want to know what the law says about rent payments and rent in advance, you can read these sections of the Residential Tenancies Act 1997:

  • Sections 39–49 – Rents (residential rental agreements)
  • Sections 99-107 – Rent (rooming houses)
  • Sections 150–160 – Rents and hiring charges (caravan parks)
  • Sections 206S-206ZC – Rents and other charges (Part 4A sites)