The Residential Tenancies Act 1997 (ACT) (‘the Act’) is legislation that governs renting within the ACT.
The Act balances the rights and interests of residential landlords and tenants, whilst also providing for resolution of disputes through the ACT Civil and Administrative Tribunal.
In addition to residential tenancy agreements, the Act also governs occupancies, and has recently introduced amendments with respect to the minimum contractual requirements for occupancy agreements within the ACT.
Occupancies are an alternative form of housing arrangements than a residential tenancy agreement. They can include student accommodation, crisis accommodation, mobile home parks, and boarding house arrangements.
Occupancy agreements are between two parties, the owner of a property (the ‘grantor’), and the person who pays money to live in the premises, but does not sign a residential tenancy agreement or lease (the ‘occupant’).
The rights and obligations of the grantor and occupant are dependent on the minimum guaranteed rights as expressed by the Act, and the individuals’ occupancy agreement.
On 3 March 2021, amendments were introduced into the Act to improve protections for occupants and grantors. The amendments clearly define what an occupancy agreement is and the circumstances in which one may be used, as well as introducing minimum occupancy principles that are mandatory to all occupancy agreements.
The mandatory occupancy principles are set out in section 71EA of the Act, and outline;
An occupancy agreement can contain terms in addition to the above mandatory principles, so long as the additional term is not inconsistent with a mandatory principle set out by the Act.
Security Deposit Framework
The amendments to the Act also introduced a security deposit framework for occupancy agreements within sections 71EC – 71EF of the Act.
This framework provides that if a grantor were to request a security deposit from their occupant, this must be lodged with the ACT Rental Bonds Office.
In order for the release of the security deposit, occupants and grantors must agree to any deductions from the deposit. In the event that there is a dispute in relation to a deduction of a security deposit, this dispute will be directed to the ACT Civil and Administrative Tribunal.
The amendments have introduced a limit of one security deposit per occupancy agreement, as well as limits on the amount of a security deposit dependant on the length of the occupancy.
Impact of the Amendments
Prior to 3 March 2021, the above occupancy principles were not mandatory, meaning less certainty was provided around the minimum requirements owed under occupancy agreements.
By making all occupancy principles mandatory, essential protections are afforded to all occupancy agreements.
If you are looking to enter into an occupancy agreement, or have any enquiries in relation to your obligations under the mandatory principles for occupancy agreements, please do not hesitate to contact the BAL Lawyers Property Team on 02 6274 0999.