What Makes a Furnished Rental Different
A furnished rental agreement includes furniture, appliances, and chattels (movable items) as part of the tenancy. This creates additional legal obligations beyond a standard residential lease. The key difference is that landlords must document all provided furniture and its condition, protect items against damage and theft, and clarify liability for wear and depreciation.
Types of items typically covered in furnished rentals:
- Major furniture: Beds, sofas, dining tables, wardrobes, desks, office furniture
- Kitchen appliances: Fridge, stove, dishwasher, microwave, kettles
- Lounge room items: TV, entertainment units, bookcases
- Laundry items: Washing machine, dryer (if in unit or provided)
- Bedding and linens: Pillows, sheets, blankets, towels (sometimes)
- Curtains and fittings: Curtain rods, blinds, hooks (if provided by landlord)
In Australia, furnished rentals can command higher weekly rent but also attract different tenant profiles (corporate transfers, international workers, short-term students). Bonds can be up to 8 weeks' rent instead of 4 weeks' for furnished properties in some states.
Chattel Schedules & Inventory Documentation
A chattel schedule is a detailed list of all furniture and movable items provided in the furnished property, along with their condition and estimated value. This is essential because it protects the landlord from tenant claims of pre-existing damage and protects the tenant from excessive deductions at bond return.
A proper chattel schedule must include:
- Item description: Specific item (e.g., "Samsung 55-inch TV" not just "TV")
- Condition at start: Good, fair, worn, damaged (with photos for high-value items)
- Estimated value: Replacement or resale value at lease start
- Location in property: Which room each item is in
- Signatures and date: Both landlord and tenant must sign acknowledging the inventory
Best practice: Take high-resolution photos of all furnished items, especially TV, appliances, and furniture in good condition. Include dated photos in the bond record. If a dispute arises about damage later, photos provide clear evidence of the item's condition at move-in.
Depreciation & Wear and Tear
One of the most contentious issues in furnished rentals is distinguishing between normal wear and tear (not the tenant's responsibility) and damage caused by tenant negligence (the tenant's responsibility). Depreciation is crucial here.
Understanding depreciation in furnished rentals:
- Depreciation is the normal loss of value over time. An item that depreciates over 5 years loses 20% of its value per year. A $100 toaster loses $20 in value per year due to age and normal use.
- Bond deductions must account for depreciation. If a tenant damages a sofa in month 18 of a 24-month lease, the landlord cannot deduct the full cost of a new sofa — only the depreciated value.
- Most states follow Fair Trading guidelines on depreciation. NSW Fair Trading publishes depreciation schedules suggesting lifespans for common household items (e.g., furniture: 7 years, appliances: 3-5 years).
Example: A landlord provides a $1,200 sofa. After 2 years (of a 3-year lease), a tenant stains it beyond repair. The sofa's depreciation is approximately 40% (2 years of a 5-year lifespan). The landlord can deduct ~$480 from the bond, not the full $1,200.
Damage Liability & Insurance Implications
Furnished rental agreements must clearly define what damage the tenant is liable for versus normal wear. The agreement should also address contents insurance — typically the landlord maintains insurance on the building structure, but the furnished items may need separate contents cover.
Typical liability clauses in furnished rentals:
- Damage beyond normal wear: Tenant liable (e.g., stains, breakage from misuse, burnt-out appliances from abuse)
- Normal wear and depreciation: Landlord's responsibility (e.g., fade on curtains, wear on upholstery, minor scratches)
- Accidental damage: Often covered under the tenancy agreement clause stating "tenant responsible for accidental damage" (varies by state)
- Contents insurance: Agreement should specify whether landlord maintains contents insurance and what it covers, and whether tenant can opt out
Contents insurance implications: Furnished rental properties often require separate contents insurance on the chattels. The agreement should clarify: Does the landlord's insurance cover theft by the tenant? Is accidental breakage covered? What's the excess (deductible)? Tenants should be aware that they may be liable for damage that insurance doesn't cover.
Higher Bonds & Additional Conditions
Because furnished rentals carry higher risk (damage to expensive items, theft), landlords typically charge higher bonds and may impose additional conditions.
Common provisions in furnished rental agreements:
- Higher bond amount: Up to 8 weeks' rent in most states (vs. 4 weeks' for unfurnished)
- No pets clause: Many furnished rentals prohibit pets due to damage risk
- No smoking: Smoke can damage furniture and requires expensive cleaning/replacement
- Mandatory professional cleaning: At move-out, tenant must pay for professional cleaning of all furniture
- Right of access for inspections: Landlords often reserve the right to inspect more frequently to check on furniture condition
- Restricted use of chattels: Agreement may specify that furniture must not be moved between rooms or out of the property
Information to Include Before Generating
- Property address and bedrooms/bathrooms
- Landlord and tenant full names
- Rental amount (furnished rentals typically cost 10-15% more)
- Bond amount (usually 8 weeks' rent for furnished)
- Detailed list of all furniture and chattels provided: Break it down by room (living room, bedrooms, kitchen, laundry)
- Depreciation schedule: How you'll value items if damaged (e.g., following NSW Fair Trading guidelines)
- Contents insurance policy details: Who maintains it, what's covered, excess amounts
- Damage liability and depreciation policy: How tenant damage will be assessed and deducted from bond
- Additional conditions: Pet policy, smoking policy, furniture moving restrictions, inspection rights