Sharing a residential rental property

Key information

• There are 3 key ways to share a rental property. Each has different requirements for tenants.
• A tenant must get a landlord’s written permission to sub-let or transfer any part of the property.
• A landlord cannot unreasonably say no to requests to sub-let part of the property or to add one or more co-tenants to the tenancy. 
• The only costs a landlord or agent can charge for a sub-let or co-tenancy are the landlord's reasonable costs of giving consent.
• Co-tenants can share and manage rental bonds using Rental Bonds Online through the principal tenant. 
• There is a form to update the bond records if there are any shared tenancy changes.

Types of shared arrangements

There are 3 key sharing arrangements for a rental property. Each arrangement has different requirements.

Sub-letting

In a sub-letting arrangement, the tenant can rent part or all the property to another person. The tenant remains the landlord's tenant and is still responsible for the tenancy, including the actions of the sub-tenant.

Transferring or assigning the agreement

If a tenant transfers or assigns the tenancy agreement, they are inviting someone to be added to or take over the agreement. The existing agreement transfers to the new tenant or co-tenant. This includes any remaining fixed term period and the rent payable. There is no need to sign a new agreement, but it is best to put the arrangement in writing to avoid any disputes later.

Additional occupants

An additional occupancy arrangement is when a tenant informally invites someone to stay with them. This could be a family member, friend or stranger and it may be a temporary or permanent arrangement.

Consent from the landlord

A tenant must get a landlord’s written permission to sub-let or transfer any part of the property.

If a tenant does this without consent, they are breaching the terms of the tenancy agreement.

Having an 'additional occupant' does not need permission, but a tenant must not exceed the maximum number of permitted occupants stated on the tenancy agreement.

In a social housing arrangement, the social housing provider's own policies and procedures apply.

When can a landlord say no?

A landlord cannot say no unreasonably to requests to sub-let part of the property or to add one or more co-tenants to the tenancy.

Examples of when it is reasonable for a landlord to say no include, but are not limited to, if:

• the total number of occupants permitted under the agreement would be exceeded
• the total number of occupants would exceed any local council rules and regulations
• the person being proposed is listed on a tenancy database
• they reasonably believe it would result in the property being overcrowded.

If a tenant’s request is refused, and they believe the decision is unreasonable, they can apply to the Tribunal to hear their case.

A landlord can refuse consent to a request to sub-let the whole property or transfer the whole tenancy, regardless of whether the refusal is reasonable.

Costs to tenants

A landlord or agent cannot charge a tenant for a sub-let or co-tenancy, other than for the landlord's reasonable expenses of giving consent.

A landlord can only charge a tenant for a reasonable expense that the landlord has paid for.

The principal tenant in a shared tenancy

If more than one tenant is on the bond (2 or more co-tenants), the tenants must decide who will be the 'principal tenant'.

The principal tenant acts on behalf of all tenants. They must:

• register with Rental Bonds Online and pay the bond money to NSW Fair Trading
• provide all co-tenants' contact details to keep them informed of any changes to the bond
• at the end of the tenancy, respond to or submit a claim for refund of bond money on behalf of all the tenants
• distribute any bond refund to the other tenants.

The other tenants may view details and receive copies of notifications sent to the principal tenant, but they cannot log on to Rental Bonds Online or do any bond transactions.

The principal tenant may log on to Rental Bonds Online at any time. They can do this to:

• view the status of the bond
• view any notifications
• create or respond to transactions that a landlord or agent makes
• update their co-tenants' contact details
• change other details, including the bank account that a refund will be made to
• submit a refund claim at the end of the tenancy.

A principal tenant can reuse their Rental Bonds Online account to pay their bond for any future property they may rent, if the managing agent or landlord is registered to use the service.

Ending a shared tenancy

The landlord or the tenant usually ends a tenancy by giving notice to the other party. The tenant vacates the property by the date specified in the termination notice. Minimum notice periods will apply for different tenancy agreements or reasons to end a tenancy. There may also be break fees or other costs if a tenancy is ended early.

Changes to a shared tenancy

It is important to tell NSW Fair Trading of any changes to co-tenants for a shared tenancy with a residential online or paper bond by completing and lodging a change of shared tenancy request form.

Download the change of shared tenancy request form.

Co-tenant moving out

If a co-tenant moves out of a shared tenancy and requests their share of the bond, the remaining tenant/s must pay it back – less any rent owed to them by the co-tenant or other reasonable costs relating to the rented property – within 14 days of the request.

This does not apply if the former co-tenant:

• has debts that exceed the amount of bond money they paid
• has been excluded from the premises by a final apprehended violence order.

Change of principal tenant

• If the principal tenant is changing, the remaining co-tenants need to nominate a new principal tenant.
• The agent or landlord needs to send the new principal tenant a link to accept the role.

When the new principal tenant is in place, a change of shared tenancy arrangement form should be completed and signed by all parties.

Claiming the rental bond at the end of a shared tenancy

A claim can only be made on a bond once the tenancy agreement for that property has ended. This is the case even if a co-tenant moves out, but other tenants remain in the property under the tenancy agreement.

A co-tenant moving out of a shared tenancy can request their share of the bond from the other co-tenants (as per the process outlined above).

For shared tenancies (2 or more tenants on the bond), only the principal tenant with a Rental Bonds Online account can submit the claim on behalf of the other tenants.

The principal tenant who acts on behalf of all co-tenants for the shared rental should:

• submit or respond to a claim for refund of bond money at the end of the tenancy
• distribute the bond refund to the other tenants.

Log in to Rental Bonds Online if you are the principal tenant and need to claim the bond.

Learn more about getting your bond back at the end of a tenancy, at the end of a tenancy, including how to claim back a paper bond.

Help and support

You can get information and support from the NSW Tenants' Union about some of the key legal issues for people living in shared tenancies.