9th November 2019
9th November 2019
A rent receipt is a simple document which a landlord (the owner of the property) may provide to a tenant (the person renting the property), to confirm that the tenant has paid rent.
Rent receipts can give tenants evidence that they have submitted payments to the landlord as required. They also give landlords a way to track incoming payments and monitor late payments or bounced cheques. For tenants who pay their rent in cash, a rent receipt is often the only written proof they have to show that they paid rent at all. Often, both landlords and tenants choose to save copies of rent receipts for these reasons.
Rental properties are legislated at a state and territory level. Some jurisdictions require landlords to provide rent receipts, while others do not. This article will summarise the situation in each jurisdiction.
Even if rent receipts are not required by law, it is a good idea for the tenant to request one, to make sure that they are able to keep track of all rental payments that they have made. In some cases, if a landlord alleges that the tenant has not paid rent, this could lead to the landlord taking action to evict the tenant which is obviously an extremely stressful and challenging situation. For example, the landlord might do this by providing a Late Rent Notice to the tenant. Having a clear set of rent receipts, which the landlord themself has prepared, is a good way to protect against this sort of situation.
In some cases the landlord might use a property manager. This is a person or organisation that deals with the tenant on behalf of the landlord, including by collecting rent and conducting inspections. If the landlord is using a property manager, then the property manager may provide the rent receipt to the tenant.
A Rent Receipt includes important information, including the amount of the rent payment, the date the payment was received, and the manner in which the payment was made (eg cash, cheque, electronic funds transfer etc). A Rent Receipt also allows the landlord to confirm whether the payment was a full or partial payment. If the tenant made a partial rent payment, the landlord can describe any late charges that the tenant may then be required to pay in relation to any remaining payment which is overdue.
A Rent Receipt should be given to the tenant when they pay rent to the landlord. In some circumstances, and in some states and territories, it must be provided immediately. In some other circumstances, it may be provided within a few days of rent being paid. Usually, it can be provided electronically or in hard copy. See our discussion below for further details of when it must be provided in each state and territory.
Each state and territory in Australia has legislation and/or regulations which deal with residential properties. These laws create certain standards for residential properties which cannot be avoided by the parties.
Therefore, if these laws impose certain requirements regarding rent receipts, then those requirements will apply, even if the residential lease says something different.
The specific rules in each state and territory are set out below.
In the ACT, the landlord (or property manager, if there is one) does not need to give the tenant a rent receipt if rent is paid electronically. However, if the rent is paid in person (for example, in cash or by cheque) then a rent receipt must be provided immediately. If rent is paid by any other means (for example, by cheque and mailed to the landlord), then a receipt must be provided within one week.
In NSW, the landlord (or property manager, if there is one) must provide a rent receipt if rent is paid in person (for example, in cash or by cheque). If rent is paid in some other way (for example, electronically), then the landlord does not need to provide a rent receipt.
In the NT, the landlord (or property manager, if there is one) must immediately provide a rent receipt if rent is paid in cash. If rent is paid by cheque, and the tenant requests a rent receipt, then the landlord must give the tenant a receipt within three business days. The landlord does not need to give the tenant a rent receipt if rent is paid electronically.
In QLD, the landlord (or property manager, if there is one), must provide a rent receipt at the time that rent is paid, if rent is paid in cash. If rent is paid by cheque, and the tenant requests a rent receipt, then the landlord must give the tenant a receipt within three business days. The landlord does not need to give the tenant a rent receipt if rent is paid electronically.
In SA, the landlord (or property manager, if there is one), must provide a rent receipt within 48 hours of payment, for all forms of rent payment except electronic bank transfers. Therefore if rent is paid by cash or by cheque, a receipt must be given to the tenant within 48 hours of payment.
In TAS, the landlord (or property manager, if there is one), must provide a rent receipt as soon as possible after payment of rent, for any rent which is paid in cash or by cheque. The landlord does not need to give the tenant a rent receipt if rent is paid electronically.
In VIC, the landlord (or property manager, if there is one), must provide a rent receipt immediately if payment is made in person (for example, in cash or by cheque). The landlord must also provide a receipt within five business days if rent is paid in any other way and the tenant requests a receipt. Therefore, if the tenant pays electronically and requests a receipt, the landlord must provide a receipt within five business days.
In WA, the landlord (or property manager, if there is one), must provide a rent receipt within three business days for all forms of rent payment except when rent is paid online or by an automated payment. Therefore the landlord does not need to give the tenant a rent receipt if rent is paid electronically.
These are two different kinds of lease which may be used for commercial properties (in other words, for non-residential properties). However, there are some important differences between commercial leases and retail leases.
Each state and territory in Australia has specific legislation which says that some types of commercial property can only be rented through a "retail lease" (rather than a general commercial lease). The law also imposes more restrictions on retail leases than it does for commercial leases.
The exact requirements for retail leases vary from one state or territory to the other, but it is often a question of the size of the property being leased and/or what it is going to be used for. In general, retail shops and similar businesses are likely to be affected by "retail leases". Other commercial property such as scrap yards or warehouses may not be affected.
Landlords who have property that fits within this retail tenancy legislation must only rent the property out using a retail lease. They are likely to face penalties if they fail to do this.
Therefore, it is important to determine whether or not the property being rented is going to be affected by the retail tenancy legislation in the relevant state or territory. Each state and territory government has an office or department that deals with fair trading or small business matters, (such as the "Small Business Commissioner" or the office of "Consumer Affairs and Fair Trading"). This is usually a good place to go for information about retail leases in the relevant state or territory.
In the case of both commercial leases and retail leases, regardless of whether or not any applicable tenancy legislation requires rent receipts, it is best practice that the landlord provides rent receipts to the tenant.
In both cases the primary use for the property is going to be some kind of business or commercial purpose. For example, the property might be used as a cafe or restaurant, a retail shop, a mechanic, a medical clinic, an office space, a warehouse or a show room (to name a few examples).
In any case, as the property is being used for commercial purposes, the rental payments are going to be a crucial part of the tax reporting for both the landlord and the tenant.
Furthermore, if the landlord is registered or is required to be registered for Goods and Services Tax ("GST"), then the landlord is also going to be liable for GST on any rent.
The tenant on the other hand, may be able to claim a tax deduction for any rent they have paid for the property. In addition, the tenant may be able to claim GST credits for the GST included in the rent, provided that both the tenant and the landlord are registered or required to be registered for GST.
In most cases, the parties are required to keep evidence of their tax reporting for five years. Either party may face penalties if they are unable to substantiate the claims made in their tax returns. Therefore, both parties are likely to benefit from having rent receipts to support these claims. For these reasons, it is best practice that the landlord gives rent receipts to the tenant.
If in doubt about any tax related matters, the parties should seek advice from an accountant.
A rent receipt is a simple yet valuable document which a landlord may provide to a tenant, to confirm that the tenant has paid rent.
While there are a few cases in which a landlord is not required to provide a rent receipt, there are many other cases in which it is required. Furthermore, even in those cases in which it is not strictly required by law, a rent receipt still serves as a valuable resource for both parties.