NSW Residential Leasing Guide

1. Who pays each cost?

Cost	Landlord	Tenant	Practical note
Council rates	Yes	No	Residential council rates remain the landlord’s responsibility.
Strata levies	Yes	No	Residential strata levies are paid by the landlord.
Land tax	Yes	No	Residential land tax cannot simply be passed on as a tenant charge.
Landlord insurance	Recommended	No	Not mandatory, but strongly recommended for investment properties.
Electricity	No	Yes	The tenant generally opens and pays their own account.
Gas	No	Yes	Usually paid by the tenant where separately metered.
Internet	No	Yes	The tenant arranges and pays for the service.
Contents insurance	No	Recommended	Protects the tenant’s personal belongings.
Water supply charges	Yes	No	Fixed supply and service charges are paid by the landlord.
Water usage	Conditional	Conditional	The tenant may be charged only when legal metering and water-efficiency requirements are met, evidence of the bill is provided, at least 21 days is allowed to pay, and payment is requested within 3 months of the bill.

Important distinction

An initial payment equal to two weeks’ rent is not a two-week holding fee. Under NSW law, the holding fee itself is capped at one week’s rent. Any additional amount must be handled lawfully, such as rent in advance when the tenancy agreement is entered into.

2. Residential and commercial leasing

Item	Residential tenancy	Commercial lease
Strata levies	Landlord responsibility	Depends on the lease
Council rates	Landlord responsibility	May be negotiated
Land tax	Landlord responsibility	May be dealt with by the lease, subject to law
Repairs	Regulated by residential tenancy law	Primarily governed by the lease

This guide concerns residential tenancies only. Commercial leasing operates under a different legal and contractual framework.

3. Landlord repair responsibilities

The landlord must provide premises that are reasonably clean, fit to live in, reasonably secure, compliant with health and safety requirements, and maintained in a reasonable state of repair.

Roof leaks
Plumbing and drainage
Electrical systems
Hot-water systems
Structural defects
Doors and windows not damaged by the tenant
Fixed appliances supplied with the property, such as an oven, dishwasher or air conditioner
Smoke alarms
Walls, ceilings and fixed fittings

Where damage is caused by the tenant, an occupant or a visitor, the tenant may be responsible for repair or compensation.

4. Tenant responsibilities

Keep the property reasonably clean
Report damage and repair issues promptly
Do not intentionally or negligently damage the property
Obtain written consent before alterations or fixed installations, except where the law provides otherwise
Take responsibility for damage caused by the tenant, occupants or visitors

5. Fair wear and tear

Fair wear and tear is deterioration caused by ordinary use and the passage of time, rather than negligence or deliberate damage.

Usually fair wear and tear

Carpet worn through ordinary long-term use
Natural fading of wall paint
Minor wear to timber flooring
Door handles loosening with age
Paint wearing naturally around frequently used switches

Usually tenant-caused damage

Holes in walls
Burn marks on flooring
Pet scratches to floors or door frames
Broken glass
Carpet damaged by an overflowing bath
Paint torn off by tape or adhesive products

6. Urgent repairs

Urgent repairs include failures that create an immediate safety, security or essential-service problem.

Gas leak
Dangerous electrical fault
Burst water service
Serious water leak
Serious roof leak
Flooding or serious flood damage
The only toilet is blocked or unusable
Failure of essential hot water, electricity or gas services
A serious security risk or inability to secure the premises

The tenant should contact the property manager or agent immediately.

The agent should notify the landlord and arrange appropriate action promptly.

The landlord should act quickly to limit damage and restore essential services.

7. Landlord insurance

Landlord insurance is not generally compulsory, but it is strongly recommended for investment properties.

Malicious tenant damage, subject to policy terms
Loss of rent or rent default, where covered
Loss following abandonment or early departure
Public liability
Certain additional repair and legal costs

8. Rental payment process

Initial two-week payment

Once the applicant confirms the rental property and accepts the tenancy terms, B&C will generally request an initial payment equal to two weeks’ rent.

How the initial payment works:

One week is treated as the Holding Deposit after the tenancy application has been approved.
The Holding Deposit confirms the applicant’s intention to proceed and temporarily holds the property during the agreed holding period.
The Holding Deposit is paid into the B&C International trust account and held by the company.
The second week is treated as rent in advance when the tenancy agreement is entered into.

Accordingly, the total initial payment is generally two weeks’ rent: one week Holding Deposit plus one week rent in advance. If the landlord decides not to proceed, the Holding Deposit must be returned. If the tenant decides not to proceed, the Holding Deposit may be retained only in the limited circumstances permitted by NSW law. The rent-in-advance component must be handled in accordance with the tenancy agreement and applicable law.

Signing the agreement

At the start of the tenancy, the tenant may be required to pay a rental bond of no more than four weeks’ rent and rent in advance of no more than two weeks.

Rental bond

The bond is lodged through Rental Bonds Online or another lawful NSW Fair Trading process. It is not rental income.

Ongoing rent collection

Once the tenancy begins, the tenant must pay rent on time in accordance with the tenancy agreement. For properties managed by B&C International, tenants generally pay rent every two weeks into the B&C International trust account. After receipt is confirmed, the property management team processes the rent and completes one landlord disbursement each month.

Landlord rent disbursement process

After the tenant’s rent is received, the property management company will complete the disbursement in accordance with the management agreement.

Where the following expenses are to be paid on the landlord’s behalf, they will be paid first with the landlord’s authorisation:

Water charges
Council rates
Strata levies
Repair expenses approved by the landlord
Other expenses agreed by both parties

If there are no expenses to be paid on the landlord’s behalf, the rent will be disbursed directly to the landlord.

After the disbursement is completed, the remaining balance will be transferred to the landlord’s nominated bank account. Generally, rent received during the current month is transferred to the landlord’s Australian bank account at the beginning of the following month.

The landlord will also receive the Rental Statement for the relevant period, showing:

Rent received for the period
Management fees
Expenses paid on the landlord’s behalf
Repair expenses, if any
Other deductions, if any
Amount actually paid to the landlord

The Annual Statement for the current financial year is generally sent to the landlord at the beginning of the second month of the following financial year, usually in early August.

Why the net payment differs

The amount deposited to the landlord may differ from the tenant’s rent payment because authorised expenses and management fees have been deducted and itemised.

Important distinction

A holding fee and a rental bond are different. A holding fee is connected with reserving an approved application; a rental bond is security for the tenancy and is lodged under the NSW bond system.

Official NSW sources

NSW Fair Trading — Rent increases NSW Fair Trading — Ending a tenancy NSW Fair Trading — Pets in rentals NSW Fair Trading — Costs at the start of a tenancy NSW Fair Trading — Access and notice periods NSW Fair Trading — Water charges

General information only — not legal advice

This guide is general information only and does not replace the Residential Tenancies Act 2010, the tenancy agreement or legal advice. Rules and forms may change. For a specific matter, contact NSW Fair Trading or a qualified legal adviser.