THE TENANCY AGREEMENT: How binding is it?

12 May 2016

A tenancy agreement is a written agreement between a tenant and the owner/s of a property that outlines the terms, conditions, obligations and expectations of both parties.

When a tenancy agreement is signed by all parties the agreement becomes binding.  The rent is outlined, the start and end date and tenancy term are formalised.

Following the signing of a tenancy agreement many landlords feel at peace and relaxed knowing that rent will be paid for the set term of agreement.

At a point of law the agreement is binding, however there are circumstances that can result in the tenancy term being terminated before the end of the tenancy, such as:

  • The tenant fails to remedy a breach of the agreement
  • The property is deemed non-livable
  • The tenant requests to break their agreement
  • By mutual agreement of all parties
  • The tenant encounters financial hardship

In addition to the above, there are five ways a tenancy agreement can be terminated

  • The tenant gives notice in accordance with legislation requirements
  • The landlord agent gives notice in accordance with the legislation requirements
  • The property is abandoned and notice is issued or a court order made
  • By mutual agreement of all parties
  • A court order is made

To minimise a tenancy being terminated before the end of the term it is important that we are thorough and strategic with our tenant selection process to ensure that they can maintain the rental payments, show stability of employment and income, have a record of secure long-term tenancies in the past and provide references.  However, we can never guarantee that unexpected situations will not arise.


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