Form 18a residential tenancy agreement fast facts

Industry News, Investors, Property Management, Tenants,  Buyers and sellers,  Property Managers

Can a minor sign a residential tenancy agreement?

Yes, under section 28 of the RTRA Act a minor can enter into a tenancy agreement as tenants do not have to be 18 years of age.

Property managers need to exercise caution during the tenancy selection process, as they should not decline a person the opportunity to apply for a property simply because they are not 18 years of age.

However, property managers do need to exercise the same due diligence they would in any tenancy selection procedure and assess the selection criteria. The same questions apply – “can the applicant provide evidence they have the ability to pay the rent?” or “can the applicant provide evidence they can meet the tenancy obligations?”

In some instances, applicants may be unable to satisfy the criteria on their own, so they apply with other tenants who have a higher capacity to meet the criteria.

This means that all the tenants are jointly and severally liable, which provides broader protection to property owners in the event the tenants fail to meet their obligations under the agreement.

I have heard some property managers use the term “guarantor”.

To protect the owner, the other party must be listed as a co-tenant on the agreement NOT as a guarantor.

 Can a company enter into a residential tenancy agreement?

Yes, but the property manager still needs to undertake the same due diligence they would in any tenancy selection process.

For example:

  • complete an ASIC search for registration and company directors;
  • confirm the company can pay the rent with their history of earnings via BAS, tax returns or an accountant letter; and
  • check trade account references.

To give the owner broader protection, a director should also apply and meet the same tenancy selection criteria. Directors should also be listed as co-tenants, alongside their company.

Below is a link to a QCAT Appeal order, which provides a good overview on what to consider when a tenant is a company.

https://archive.sclqld.org.au/qjudgment/2018/QCATA18-057.pdf

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