Now let's consider another aspect of share housing life – the comings and goings of housemates – and how these are dealt with under the new Residential Tenancies Act. As with the question of whether you're covered, the new Act makes important changes to the law relating to coming and going.
(The Secret Life of Us. By the end of the fourth series, only Kelly and Simon the barman were left.)
A typical share house might start out with a couple of persons who have a tenancy agreement with the landlord (let's call them Alex and Evan), to whom are added one or more persons who don't (Kelly, and others). We'll use variations on this example to consider a couple of ways of coming and going under the new Act:
Subletting
As discussed last time, one way for Kelly to take occupation with all the rights and responsibilities of a tenant (rather than a mere lodger) is if she is a sub-tenant under a written residential agreement with Alex and Evan (s 10(b)). This is called a subletting.
To pull-off a lawful subletting, Alex and Evan will need the consent of the landlord (s 74). Because Alex and Evan are remaining at the premises and just subletting a spare room – what the Act refers to as a 'partial' sublet – the landlord must not unreasonably refuse consent (s 75(2)). The Act helpfully indicates what might be a 'reasonable' refusal (s 75(3)): in particular, where the sublet would result in overcrowding, or where Kelly is listed on a tenancy database. If the landlord refuses consent and Alex and Evan believe it is unreasonable, they can apply to the Tribunal to resolve the dispute (s 75(4)).
As a sub-tenant, Kelly still has no contractual relationship with the landlord: her contractual relationship is with Alex and Evan. They are, legally, Kelly's landlord.
Transfers
Next thing you know, Alex is moving out and Evan and Kelly are looking for a new housemate (and they find one: Marnie). They could do another sublet, but Alex is not interested in being landlord to a couple of sub-tenants in a place where she no longer lives. Instead, Alex might consider a 'transfer' of her tenancy to Marnie.
A transfer - or 'assignment', as the old Act called it - is different from subletting, much in the way that 'duplicate' is different from 'cut and paste'. While subletting creates a new agreement between Alex & Evan and Marnie, a transfer takes the rights that Alex enjoys under her's and Evan's agreement with the landlord and gives those very rights to Marnie, such that Alex does not have them anymore. Under the old Act, there was a problem with assignment: Alex could assign the benefits of the contract, but not it burdens, so if things later went wrong the landlord could still sue Alex. The TU is not yet sure whether the new Act's provisions about 'transfers' clear up this problem, so it's probably a good idea if you're doing a transfer to also arrange for an 'indemnity' to be signed between you (ie Alex) and the transferee (ie Marnie). See a Tenants Advice and Advocacy Service for more about this.
In another respect, transfers are similar to sublets: you need the landlord's consent to lawfully do one. Likewise, if it's a partial transfer - ie just Alex's tenancy rights are being transferred, while Evan remains - the landlord must not refuse consent unreasonably.
A final word on sublets and transfers. Say Alex and Evan were going to move out together (and didn't we all hope they would?). They might consider either subletting or transferring the whole of their tenancy to Kelly (that is, not just a 'partial' sublet or transfer). To do either, they will need the landlord's consent – and this time, the landlord may refuse unreasonably (s 75(1)) and there's no recourse to the Tribunal. In other words, the landlord may refuse to hear any suggestion of a whole sublet or transfer out of hand ('I'm not listening, I can't hear you, la la la') or refuse for a daft reason (doesn't like the colour of Kelly's socks) or simply not give a reason at all. If, however, the refusal is discriminatory (eg doesn't like the colour of Kelly's skin, or her gender, or that she's a young person, etc), Kelly might have a complaint under State or Federal anti-discrimination legislation.
Subletting
As discussed last time, one way for Kelly to take occupation with all the rights and responsibilities of a tenant (rather than a mere lodger) is if she is a sub-tenant under a written residential agreement with Alex and Evan (s 10(b)). This is called a subletting.
To pull-off a lawful subletting, Alex and Evan will need the consent of the landlord (s 74). Because Alex and Evan are remaining at the premises and just subletting a spare room – what the Act refers to as a 'partial' sublet – the landlord must not unreasonably refuse consent (s 75(2)). The Act helpfully indicates what might be a 'reasonable' refusal (s 75(3)): in particular, where the sublet would result in overcrowding, or where Kelly is listed on a tenancy database. If the landlord refuses consent and Alex and Evan believe it is unreasonable, they can apply to the Tribunal to resolve the dispute (s 75(4)).
As a sub-tenant, Kelly still has no contractual relationship with the landlord: her contractual relationship is with Alex and Evan. They are, legally, Kelly's landlord.
Transfers
Next thing you know, Alex is moving out and Evan and Kelly are looking for a new housemate (and they find one: Marnie). They could do another sublet, but Alex is not interested in being landlord to a couple of sub-tenants in a place where she no longer lives. Instead, Alex might consider a 'transfer' of her tenancy to Marnie.
A transfer - or 'assignment', as the old Act called it - is different from subletting, much in the way that 'duplicate' is different from 'cut and paste'. While subletting creates a new agreement between Alex & Evan and Marnie, a transfer takes the rights that Alex enjoys under her's and Evan's agreement with the landlord and gives those very rights to Marnie, such that Alex does not have them anymore. Under the old Act, there was a problem with assignment: Alex could assign the benefits of the contract, but not it burdens, so if things later went wrong the landlord could still sue Alex. The TU is not yet sure whether the new Act's provisions about 'transfers' clear up this problem, so it's probably a good idea if you're doing a transfer to also arrange for an 'indemnity' to be signed between you (ie Alex) and the transferee (ie Marnie). See a Tenants Advice and Advocacy Service for more about this.
In another respect, transfers are similar to sublets: you need the landlord's consent to lawfully do one. Likewise, if it's a partial transfer - ie just Alex's tenancy rights are being transferred, while Evan remains - the landlord must not refuse consent unreasonably.
A final word on sublets and transfers. Say Alex and Evan were going to move out together (and didn't we all hope they would?). They might consider either subletting or transferring the whole of their tenancy to Kelly (that is, not just a 'partial' sublet or transfer). To do either, they will need the landlord's consent – and this time, the landlord may refuse unreasonably (s 75(1)) and there's no recourse to the Tribunal. In other words, the landlord may refuse to hear any suggestion of a whole sublet or transfer out of hand ('I'm not listening, I can't hear you, la la la') or refuse for a daft reason (doesn't like the colour of Kelly's socks) or simply not give a reason at all. If, however, the refusal is discriminatory (eg doesn't like the colour of Kelly's skin, or her gender, or that she's a young person, etc), Kelly might have a complaint under State or Federal anti-discrimination legislation.
Hi,
ReplyDeleteI don't know how often this gets checked, but I have a question:
Once you have transferred part of your tenancy to someone else, is the new person now an "original lease holder" on the new lease? I.e, if Alex and Evan both wanted to move out, could Alex do a partial tenancy transfer, and then Evan do another one once a new housemate was on the lease? Thus, essentially transferring the whole lease without being able to be unreasonably refused...
Hi Lucy,
ReplyDeleteGood question. The short answer is "I don't really think so..."
The new tenant is probably not an "original lease holder". But that does not mean what you've suggested could not, in theory, happen.
The obstacle for tenants wanting to do this would be the landlord's consent to transfer.
If an original tenant remains party to the agreement, the landlord may not unreasonably refuse consent. But if no original tenant was to remain, the landlord could refuse the transfer, and could be entirely unreasonable about it if they wanted to.
Might the new tenant become an "original lease holder" on the new lease, especially if all of the old tenant's rights are transferred to them?
ReplyDeleteThat's unlikely.
ReplyDeleteThe provision (section 75(2)) refers to an "original tenant under the residential tenancy agreement", which might be read differently to a "tenant under the original residential tenancy agreement".
But then, even if a transferee were to become an "original tenant", the landlord might still object to further transfers, and claim that their refusal is not unreasonable in the circumstances.
(Sorry, that's a mouthful, but I am trying to follow the language of the law...)
Cheers,
N.C.