Busting 5 myths about the Form 18a General Tenancy Agreement

You have to be 18 to sign a Form 18a General Tenancy Agreement

Incorrect, section 28 of the RTRA Act, clearly states a minor can enter into a Tenancy Agreement.  To refuse an application based on age would therefore be considered discriminatory.  Naturally as like any tenancy application the same selection criteria would apply to all applicants regardless of their age.

A Company cannot be listed as a tenant on the Form 18a General Tenancy Agreement

Incorrect, Under the Corporations Act (Section 124), a company is considered a legal entity and can enter into a contract. Property managers need to exercise the same due diligence in their tenancy selection criteria and procedures in this situation as they would if an individual applied for a residential property.

A property manager should consider the following points:

• Request the corporate tenant provide a current ASIC search for a new tenancy and before entering into a new Fixed Term Agreement. This will ascertain who the director(s) of the company are and confirm who has the legal capacity to enter into agreements on behalf of the company.
• If you have concerns about the currency or validity of the search provided by the corporate tenant, conduct your own ASIC search if the owner is agreeable and the PO Form 6 has authority for you to incur this expense for the owner.
• Independent evidence such as an accountant’s letter or copies of taxation assessments will support the company’s ability to meet the financial obligations of the proposed tenancy terms.
• Check trade account references for the company and/or the individual director/s.
• Rental references for the company and or the individual director/s should also be checked.
• Seek to have a director(s) of the company or the intended occupant as a co-tenant. This provides the lessor greater protection if the company goes into liquidation.
• Form 18a Item 1 – you do not need to include the Lessor name in 1.1 where it states Lessor as either they or the agency do not want the tenants to know who owns the property.

Additionally, the approved number of occupants should be clearly stated on the General Tenancy Agreement Form 18a, and the special terms of the agreement should contain provisions in relation to the occupation and use of the premises. Below is a link to a QCAT Appeal relating to a corporate tenant which highlights the importance of due diligence for both an initial tenancy and a subsequent new fixed term agreement. Find out more here.

Form 18a Item 1 – you do not need to include the Lessor name in 1.1 where it states Lessor as either they or the agency do not want the tenants to know who owns the property.

Incorrect, the Form 18a is between the Lessor and Tenant.  Item 1.1 the address can be stated as c/- the agent so this informs the tenant to communicate with the Lessor via the Managing Agent.  This becomes a critical consideration in the event of the tenant being an Applicant associated with a QCAT claim and the named Respondent.

Additionally, if Item 3, the agent changes during the course of a tenancy, eg change of management, sale of rentroll, a Section 206 Notice must be provided to the tenant to provide the new managing agent the Authority to appear at a QCAT hearing on behalf of the Owner.

You do not need to list the tenant email addresses in Item 2 or Item 4.1 as you do not want the owner to have these details in case they contact the tenant direct.

You do, if you wish to issue Notices to the tenant via email as per Standard Term 44 (3) (d). The tenants email address for service needs to be stated in Item 2 and consent provided via Item 4.1 if the email address they wish notices to be sent to is different to the email address provided in Item 2 then the specified email address for notices is to be inserted in 4.1.  Also note Standard Term 44 (4) the tenant can withdraw the consent for notices to be issued by email.

You can have a Guarantor for a Residential Tenancy Agreement

Incorrect, if a party has offered to “guarantee” the performance of a tenancy agreement this person should be subject to the same selection criteria as any other listed tenant, and they should be included on the agreement as a listed tenant.  Listed tenants are joint and severally liable as per Standard term 3 (3) (a) (b).

Find out how Realworks GTA annexures can help property managers here.

Browse our property management articles for more helpful tips and advice.