Pop quiz!

Q. You answer the door to a woman who identifies herself as your landlord's estranged wife and co-owner of the premises. Until now, you had no idea such a person even existed. The woman demands entry to the premises.

Do you:
(a) stoutly refuse her entry – she's trespassing; or
(b) pull out the sofa bed – you've got a new housemate.

If you answered (a), good on you for sticking up for yourself, but legally you're wrong. The law says the correct answer, bizarrely, is (b).

(And if your landlord's estranged wife and co-owner looks like settling in for an extended stay, consider investing in a Tent Sofa – yes, they do exist.)

In a case like this, the law says each of the co-owners starts off with a right to possession of the premises (but not to the exclusion of the other), and when one of the co-owners enters into a residential tenancy agreement, that co-owner's right is passed to the tenant – and the other co-owner's right remains with that co-owner. Under the terms of the residential tenancy agreement, the tenant's right is exclusive of the co-owner who granted it, but it is not exclusive of the third party co-owner (it wasn't exclusive in the first place – that is, when it was in the hands of the first co-owner – and it cannot be now).

The third party co-owner's right is not exclusive of the tenant either; but they don't owe the tenant any obligations as far as the tenant's quiet enjoyment of the premises are concerned. Not being a party to the residential tenancy agreement, the third party co-owner cannot terminate it either (nor, for that matter, are they entitled to any of the rent paid by the tenant – that goes just to the co-owner who granted their own right to occupy to the tenant).

This pop quiz scenario has actually occurred once that we know of: the strange, sad case of Catanzariti v Whitehouse, where a landlord's estranged wife and co-owner really did move in with a tenant. (As the Federal Court records, 'initially against [the tenant's] will.' However, the tenant, 'being uncertain of his legal position, agreed to allow her to return to the house and occupy one of its rooms. She made certain re-arrangements to the disposition of the furniture and other chattels in the premises to enable her to do this.) The case ended up in court when these 're-arrangements' went as far as the tenants' sheets and crockery being thrown into the backyard, where the dog got at them. And the Court held: the estranged wife had a right to occupy the premises, and she owed no obligation to the tenant in relation to his quiet enjoyment. (The tenant was awarded some compensation for the damage to his linen and crockery as a matter of tort law – not anything to do with his tenancy).

This sort of thing, it must be said, would be a very rare occurrence, but the precipitating circumstances – that is, a co-owner getting left off an agreement – are probably a lot more common, so the potential for a Catanzariti v Whitehouse-style showdown may be quite widespread. To reduce this potential, the Tenants' Union is asking, in its submission on the draft Residential Tenancies Regulation 2010, recently circulated by Fair Trading NSW, for a requirement that landlords disclose all third party interests in rental premises. We expect that this would not actually result in very many third party co-owners being disclosed – rather, the effect would be that landlords would take greater care to ensure that all the co-owners are included in the tenancy agreement.

The TU will be commenting on more besides that – and to make your own comment, click on that link.