An agency agreement is created every time one party instructs another to act on their behalf. In the case of rental property, the deal is usually between the landlord and the agent authorised to act on the principal's behalf. This may be limited to finding a tenant to rent the property or extending to the complete management of the property, creating and signing a tenancy agreement.

An agency agreement may be created verbally, including the authorisation to sign the tenancy agreement, unless the tenancy is for more than three years. In this case, the tenancy must be in writing and must be created by deed. If the tenancy is by deed, the agent must be authorised by deed to sign on the landlord's behalf. This is known as a Power of Attorney created under the Powers of Attorney Act 1971.

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