In this blog I thought we would clarify what it actually means to pay rent in advance. As such I have kept this to three scenarios which seem to be questioned on a regular basis at the commencement of a new tenancy.
Weekly rental payment v’s fortnightly or monthly.
When a tenant signs a tenancy agreement it clearly states how the rent will be paid, for example $600 per fortnight paid fortnightly in advance. Therefore, if a tenant wishes to pay their rent weekly, because this is their pay cycle, they still have to ensure the rent remains a fortnight in advance to adhere to their tenancy agreement. If a tenant requires a particular rental period such as monthly in advance, then they should advise the landlord and/or agent before signing the tenancy agreement, so the agreement can be set up that way. Simply put a tenant can’t just decide what frequency they want to pay rent without consultation with the landlord and/or property manager as it could affect the rental arrears status.
Rent paid to date.
When a tenant pays rent their receipt will advise them when their rent is paid up to. It is critically important then for the tenant to ensure the rent is paid/receipted by the landlord and/or the property manager on the due date. This means the tenant must ensure the rent is received in the nominated bank account on the day it’s falls due. The due date is not the date to transfer the money, otherwise in most cases the tenant becomes in arrears immediately. Some banks or credit unions can take up to 48 hours, and maybe longer if it is a weekend or public holiday, to process money between the financial institutions. Our recommendation is for tenants to set up bank transfers to the nominated bank account a couple of days prior to the due day.
Rent paid in advance.
Property managers are used to hearing from some tenants at the end of the lease “…but didn’t I pay two weeks in advance at the beginning of the tenancy, where is this?” As mentioned above the tenancy agreement will state what frequency the rent is required to be paid in advance. This commences at the beginning of the tenancy; however, the tenancy agreement will then state the next date the rent is due to be paid and thereafter. Simply put the tenant pays rent for a fortnight and no more rent needs to be paid until the period has finished. I reckon it to staying at a motel where you pay for three days accommodation, stay, then leave or pay for additional days in advance. In reflection to the first comment in this paragraph a tenant needs to pay rent up to the end of their tenancy as they haven’t the original two weeks paid advance in reserve.