There are a number of ways to share a rented home and each arrangement means you have different obligations and processes to follow.
This involves you entering into a formal agreement with somebody else to rent part of the premises to them (e.g. the garage or granny flat) or the whole premises. In effect you are taking on the role of landlord for the sub–tenant. You remain the landlord's tenant at the same time. There is no contractual arrangement between the landlord and the sub-tenant. For example, the sub–tenant would pay their rent to you not the landlord or agent. You continue to be responsible for the tenancy, including the actions of the sub–tenant. If, for instance, the sub–tenant caused damage to the premises you would need to fix it or pay for the repairs. You may be able to recover the cost from the sub–tenant.
This is different to sub–letting and is where you wish to transfer the whole tenancy to a new tenant or only part of the tenancy (i.e. by taking in a new co–tenant). There is no ongoing landlord and tenant relationship once the tenancy is transferred as there is with sub–letting. The new tenant is either jointly responsible to comply with the lease (in the case of a new co–tenant) or wholly responsible to the landlord if the whole tenancy is transferred. The existing lease agreement, including any remaining fixed term period and the rent payable, is transferred to the new tenant or co–tenant. There is no need to sign a new lease although it is best to put the arrangement in writing to avoid any disputes later on.
This arrangement falls outside the sub–letting and transferring rules. This is where you wish to have somebody stay with you in the premises on an informal basis. This could be a family member, friend or stranger and it may be a temporary or permanent arrangement. Exclusive use or possession of part of the premises is not granted. All areas of the premises are simply shared. The new person is just an additional occupant even though they may be paying you rent to stay there. You are responsible for the actions of any occupants or guests you allow in the premises.
You must first seek the landlord or agent's written consent before you sub–let or transfer any part of the premises. If you do this without consent you are breaching the terms of the agreement. The landlord can apply to the NSW Civil and Administrative Tribunal to order you to comply with the lease.
The landlord has total discretion if you ask to sub–let or transfer the whole premises. If they say no, you cannot apply to the Tribunal.
However, if you want to only sub–let part of the premises or take on a new co-tenant the landlord cannot unreasonably say no. They can ask for information about the prospective sub–tenant or co–tenant such as their name and details of their rental history. They can ask that an application for tenancy form be filled out. They could also meet and interview the person, as they would with a new tenant.
If you just want to have an additional occupant you do not need to tell the landlord or agent who they are, or get their consent. However, you must not exceed the maximum number of permitted occupants stated on the lease.
As mentioned above the landlord cannot unreasonably say no to requests from you to sub–let part of the premises or take on a new co–tenant. The law gives some examples as to when it is reasonable for the landlord to say no. These are:
This is not an exhaustive list. There may be other situations where it would be reasonable to decline your request.
If your request to sub–let part of the premises or to add a co-tenant is refused, and you believe the decision is unreasonable, you can apply to the Tribunal which will arrange for a hearing and consider evidence from you and the landlord before making an order about whether to allow you to sub–let or add a co–tenant.
You cannot be charged by the landlord or agent for allowing a transfer or sub–letting, other than any reasonable expenses incurred. In most situations there is unlikely to be any expense involved.
While the new sub–tenant or co–tenant may mean there is extra income in the household it does not mean that the landlord can automatically increase the rent. The same rules for putting the rent up still apply.
Where a bond has been paid and co–tenants subsequently change, co–tenants can pass bond money between themselves from the incoming to the outgoing person. A Change of Shared Tenancy Arrangement form will need to be signed and lodged with Fair Trading so that the bond records can be updated. You can get a copy of the form from the Fair Trading website, a Fair Trading Centre or by calling 13 32 20.
The need to be reasonable when considering requests to add a co-tenant or sub-let part of the premises does not apply to social housing providers, such as Housing NSW. Who can live in the premises is determined by the social housing provider's own policies and procedures.
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