5 Clauses Tenants Should Look Out For In A Lease

Signing a lease is one of the most financially significant things most people do each year. Under lease contract law in Australia, you are bound by the terms once you sign. Yet most tenants sign without reading the full agreement or understanding the clauses that could cost them hundreds or thousands of dollars later. The five clauses explained in this guide are the ones our tenancy lawyers see cause the most disputes in any lease and agreement. Read this before you sign, not after.

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What Are Clauses in a Lease Agreement?

A lease clause is a specific provision within a tenancy agreement that sets out a right, obligation, or condition applying to the landlord or tenant during the tenancy. Rental agreement clauses and tenancy agreement clauses serve the same purpose in residential leases.

Lease clauses in a tenancy agreement are legally binding. Once you sign, you are bound by them regardless of whether you read them. A standard residential tenancy agreement in NSW includes mandatory clauses under the Residential Tenancies Act 2010 (NSW), plus any additional clauses negotiated between the landlord and tenant.

Understanding the main clauses and lease provisions of a lease agreement before you sign gives you the opportunity to negotiate changes, ask questions, and know exactly what you are agreeing to.

Clause 1: The Rent Clause

The rent clause, sometimes called a rental clause or rent agreement clause, is the foundation of any tenancy agreement. It covers the rent amount, how and when it must be paid, what happens if you pay late, and whether and how rent can be increased during the lease.

What to Check in the Rent Clause and Rent Agreement Clauses

  • The exact weekly or monthly rent amount and the date it is due each period
  • Accepted payment methods: not all landlords accept all payment types
  • The amount of bond required and how it will be held (in NSW, bonds must be lodged with NSW Fair Trading)
  • Whether the lease is fixed term or periodic, and how long the fixed term runs
  • The rent increase procedure in NSW, rent can only be increased once in any 12 months, with the required notice

Clause 2: The Wear and Tear Clause in Your Tenancy Agreement

The wear and tear clause is the most frequently misunderstood and disputed clause in any residential lease. Understanding it clearly before you sign can protect your bond when you move out.

What is the wear and tear clause?

The wear and tear clause in a tenancy agreement sets out the standard of cleanliness and condition in which you are required to return the property when your tenancy ends. It governs how the landlord can apply your bond if the property is not returned in the agreed condition.
In most Australian residential leases, tenants are required to return the property in the same condition as when they moved in, allowing for fair wear and tear. This is a critical distinction.

What is normal wear and tear in a rental property?

Normal wear and tear in a rental property refers to the ordinary and reasonable deterioration of a property that occurs through everyday living over time. It is the natural result of living in a property and is not the tenant’s financial responsibility.

Normal wear and tear is different from damage. Damage is something a tenant caused through carelessness, accident, or misuse. The landlord can claim the cost of repairing damage from your bond. They cannot claim the cost of normal wear and tear.

 

Normal Wear and Tear (Tenant NOT responsible)

Damage (Tenant IS responsible)

Carpet worn thin in high-traffic areas after years of use

Burns, stains, or tears in the carpet from misuse

Paint is fading or becoming slightly marked over time

Large holes in walls from nails, anchors, or impacts

Minor scuffs on the walls from furniture

Deep gouges, graffiti, or significant wall damage

Worn door handles or hinges from regular use

Broken doors or handles from rough treatment

Loose tiles from natural settling

Cracked or broken tiles from impact

Faded curtains or blinds from sun exposure

Torn, stained, or broken blinds

Light scratches on the floors from regular foot traffic

Deep scratches or gouges from furniture dragged without protection

Aged or discoloured grout in the bathroom

Mould caused by poor ventilation during the tenancy

Normal wear and tear in carpets

Normal wear and tear in carpet is one of the most common points of dispute between landlords and tenants. Carpet has a finite life expectancy, and tribunals generally consider the age and expected lifespan of the carpet when assessing bond disputes. Carpet depreciation may reduce the amount a landlord can recover, as it would not be fair to charge a tenant for replacing a carpet that was already significantly worn at the start of the tenancy.

If a carpet was already significantly aged when you moved in and shows general wear after your tenancy, a tribunal may reduce or disallow a bond claim for full replacement. The amount recoverable depends on the carpet’s age, its condition at the start of the tenancy, and the nature of the wear. This is assessed on a case-by-case basis.

Normal wear and tear in an apartment

In an apartment, normal wear and tear follows the same principles. Minor scuffs, small nail holes from hanging pictures, slightly worn kitchen surfaces, and faded paint are all considered ordinary results of living in a property. They are not damaged.
What is considered wear and tear in an apartment depends partly on how long you have lived there. A mark that would be acceptable after a 3-year tenancy might be questioned after a 3-month one. The longer the tenancy, the more latitude is generally given.

Do tenants have to pay for wear and tear in Australia?

No. Tenants in Australia are not required to pay for normal wear and tear. The fair wear and tear clause in Australian tenancy law protects tenants from being charged for ordinary deterioration that occurs through reasonable use of a property over time.
If a landlord attempts to withhold your bond for items that constitute normal wear and tear rather than actual damage, you can dispute the bond claim at the relevant state tribunal. In NSW, this is the NSW Civil and Administrative Tribunal (NCAT).

Clause 3: The Maintenance and Repairs Clause

The maintenance and repairs clause defines who is responsible for maintaining the property and carrying out repairs during the tenancy. This is one of the most important lease clauses for tenants to understand before signing.

Landlord's maintenance obligations in NSW

Under the Residential Tenancies Act 2010 (NSW), landlords are required to provide and maintain the rental property in a reasonable state of repair. This applies regardless of what the lease says. Key landlord obligations include:

  • Ensuring the property is fit for habitation at the commencement of the tenancy
  • Maintaining the structure of the property including the roof, walls, and plumbing
  • Repairing urgent defects such as broken hot water systems, gas leaks, or security breaches promptly
  • Keeping common areas (in apartment buildings) safe and maintained

Tenant's maintenance responsibilities

Tenants are generally responsible for keeping the property clean and in good condition, notifying the landlord promptly of any damage or required repairs, and paying for repairs caused by their own negligence or misuse. Tenants are typically not responsible for repairing general wear and tear.

Clause 4: The Posting Clause and Signage Provisions in Your Lease

A posting clause or signage clause in a lease is a provision that deals with the display of signs, notices, or other materials at or on the property. It may specify whether the landlord can display for-sale or for-lease signs, whether you as the tenant can put up signs, and how formal notices are to be given between the parties.

What does the posting clause mean in a tenancy agreement?

The term posting clause is used in different ways in Australian property law and its meaning can vary depending on the lease. In some leases, a posting clause refers to provisions about displaying signs or notices at the property, such as for-sale boards, letting signs, or public notices. In other contexts, it may relate to how formal notices or communications are served between the landlord and tenant.
If your lease contains a clause described as a posting clause, read it carefully to understand exactly what it permits or restricts. If the wording is unclear, seek advice from a tenancy lawyer before signing.

Can the Landlord Display Signs at Your Rental Property?

If the landlord intends to sell the property during your tenancy, they may ask to display a for-sale or for-lease sign. Whether you must permit this depends on what the lease says and what rights the Residential Tenancies Act 2010 (NSW) provides in your specific circumstances. If the lease includes a clause requiring you to permit signage, review whether this is consistent with your statutory rights before signing.
For guidance on landlord access rights and inspection notice requirements, which are separate from signage provisions, seek advice from a tenancy lawyer or NSW Fair Trading. Notice requirements differ depending on the type of inspection and the circumstances.

Clause 5: The Break Clause and Early Termination

The break clause (or early termination clause) in a tenancy agreement sets out what happens if you need to leave before the fixed term of your lease ends. This is one of the most financially significant lease clauses for tenants who may need to relocate for work, family, or other reasons.

What to look for in the break clause

Before signing, check whether the lease includes any right to terminate early without penalty. Standard NSW residential leases for fixed terms do not automatically include a break clause, meaning the tenant may be liable for rent until the landlord finds a new tenant or the lease expires, whichever comes first.

The break clause or early termination clause in your lease should specify:

  • The amount of notice required to exercise the break clause
  • Any fee or break cost payable (in NSW, this is regulated under the Residential Tenancies Act 2010 and depends on where you are in the fixed term)
  • Whether the landlord must take reasonable steps to relet the property to minimise your losses

Break fees in NSW

Under the Residential Tenancies Act 2010 (NSW), if you break a fixed-term lease, the break fee that applies depends on the stage of the lease:

When You Break the Lease

Break Fee (NSW, Fixed Term)

In the first 25% of the fixed term

6 weeks rent

25% to 50% of the fixed term

4 weeks rent

50% to 75% of the fixed term

2 weeks rent

In the last 25% of the fixed term

1 week rent

5 Clauses Tenants Should Look Out For In A Lease
Understand Your Rights Before Signing A Rental Agreement
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Lease agreements can contain terms that significantly affect your rights and responsibilities as a tenant. Pay close attention to clauses relating to rent increases, maintenance obligations, bond deductions, termination conditions, and renewal options. Understanding these provisions can help you avoid disputes and make informed decisions before signing.

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Additional Clauses in Tenancy Agreements to Watch Out For

Beyond the five main clauses above, there are several additional clauses tenancy agreement documents commonly include that tenants should review carefully. These common rental lease terms are often where unexpected costs and disputes arise.

Pets clause

The pets clause sets out whether you are permitted to keep a pet at the property. NSW tenancy laws around pet permissions have been subject to ongoing reform, and the current position should be verified with NSW Fair Trading or a tenancy lawyer at the time of signing. Regardless of the current legal framework, always ensure the position on pets is addressed in writing in the lease before you sign, rather than relying on a verbal agreement.

Subletting clause

Most residential tenancy agreements in NSW prohibit subletting or assigning the lease without the landlord’s written consent. If you sign a lease without reading this clause, you may be in breach if you later need to sublet the property. Check whether the lease requires consent and whether the landlord is likely to grant it.

Rent agreement clause: water charges

In NSW, landlords can pass on water usage charges to tenants only if the property meets certain water efficiency standards. The lease should specify whether you are responsible for water usage charges. If it does, the property must have a compliant water meter and meet the efficiency requirements prescribed under the Residential Tenancies Act 2010.

Home buying clause in a lease

Some tenancy agreements include a home buying clause or right of first refusal, giving the tenant the option to purchase the property before it is offered to other buyers. This is more common in commercial leases but can occasionally appear in residential agreements. If present, read the clause carefully to understand the conditions, the timeframe for exercising the option, and how the purchase price is determined.

What to Look For in a Rental Agreement Before Signing

Before signing any tenancy agreement, work through this checklist. These are the lease agreement important clauses and things to look for that most tenants miss.

 

  • Confirm the weekly rent, bond amount, and payment method are correctly stated
  • Check the start and end dates of the fixed term, or whether it is a periodic tenancy
  • Read the wear and tear clause carefully and understand what condition the property must be returned in
  • Identify who is responsible for what repairs and maintenance
  • Check what notice the landlord must give before inspections or entry
  • Understand the early termination provisions and what break costs apply
  • Check the position on pets, subletting, and alterations to the property
  • Review any additional clauses the landlord has added beyond the standard form
  • Ask for clarification on anything you do not understand before signing

Key Clauses in Commercial Lease Agreements for Business Tenants

Business tenants renting commercial premises face a different and more complex set of lease clauses. The Residential Tenancies Act 2010 does not apply to commercial leases in NSW. Commercial tenants have fewer automatic protections, making it even more important to review the lease carefully.

The best commercial lease clauses for a business tenant to negotiate include options to renew, rights to sublet or assign, make-good obligations (returning the premises to original condition), permitted use clauses, and rent review mechanisms.

Frequently Asked Questions

The main clauses in a lease agreement include the rent clause (amount, due date, and increase process), the wear and tear clause (condition of the property at end of tenancy), the maintenance and repairs clause (who is responsible for what), the posting clause (landlord access and signage), the break clause (early termination rights), and any additional clauses relating to pets, subletting, water charges, or alterations.

The wear and tear clause sets out the standard of condition in which you must return the property at the end of the tenancy. Under Australian tenancy law, tenants are only responsible for returning the property in the same condition as when they moved in, allowing for fair wear and tear. Landlords cannot charge tenants for ordinary deterioration from reasonable everyday use.

Normal wear and tear in a rental property is the ordinary, reasonable deterioration of a property that occurs through everyday living. Examples include carpet worn thin in high-traffic areas, minor scuffs on walls, faded paint, worn door handles, and sun-faded curtains. These are not damaged. Tenants are not financially responsible for fair wear and tear when they vacate.

Normal wear and tear for carpet in a rental includes general flattening in high-traffic areas, minor dulling of colour over time, and light surface marks from regular foot traffic. These are expected over a tenancy. Damage, such as burns, tears, or permanent stains from misuse, is different and may be claimed from the bond. Carpet has a finite useful life and age must be considered in any claim.

No. Tenants in Australia are not required to pay for normal wear and tear. This is protected under tenancy legislation in all Australian states and territories. If a landlord withholds bond for items that are ordinary wear and tear rather than actual damage, tenants can dispute the claim at the relevant state tribunal, such as NCAT in NSW.

The posting clause in a lease agreement or signage clause deals with the display of signs or notices at the property and how formal communications are served between parties. If your lease includes such a clause, read it carefully. Notice requirements for different types of landlord entry in NSW are set out in the Residential Tenancies Act 2010 and vary by purpose. Always verify current requirements with NSW Fair Trading or a tenancy lawyer.

A home buying clause (or right of first refusal clause) in a lease gives the tenant the option to purchase the property before it is offered to other buyers if the landlord decides to sell. It is more common in commercial leases but can appear in residential agreements. The clause should specify the notice period, how the option is exercised, and how the purchase price is determined.

The most important clauses in lease agreement documents to protect tenants are: the rent clause, the fair wear and tear clause, the maintenance clause, the break clause, and any additional clauses relating to pets, subletting, or alterations. Each clause in lease agreement terms should be reviewed before signing.

Additional clauses in a tenancy agreement are provisions added by the landlord beyond the standard terms required by the Residential Tenancies Act 2010. These might include specific pet conditions, mandatory professional cleaning requirements, restrictions on subletting, or requirements around alterations. Not all additional clauses are enforceable if they contradict your statutory rights.

Key clauses in a commercial lease agreement include: rent and review mechanisms, option to renew, permitted use (what business activities you can conduct), make-good obligations, subletting and assignment rights, outgoings (who pays for rates, insurance, and maintenance), and demolition or relocation clauses. Commercial tenants have fewer automatic protections than residential tenants and should always have a commercial lease reviewed by a lawyer.

Before signing a rental agreement, check the rent amount and increase provisions, the bond amount and lodgement requirements, the wear and tear obligations, the maintenance responsibilities, the early termination or break clause, the notice requirements for landlord access, any pet or subletting restrictions, and all additional clauses beyond the standard form. If anything is unclear, seek legal advice before signing.

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