Share Housing Month - are you in or out?

Ah, February: the bright summer sun; the shrill of cicadas in the trees and the click of leather against willow on the cricket grounds; the smell of cut grass and fresh paint as landlords get ready for the turnover of rental properties at the start of another academic year (ha!). At the Brown Couch, it's Share Housing Month.

(Share housing.)

At the last Census, about nine per cent of all renter households were, in the ABS's terms, group households. That's about 3 per cent of all households, which seems, to be honest, surprisingly small. But it seems that way because share housing looms so large in tenancy culture and, indeed, in life generally. Social life runs on share housing stories. For so many of us, share housing was the place where we learned – sometimes painfully – our first lessons as adults in when to trust, when to risk it, how to love, and how to hate.

*

The first order of business for Share Housing Month is the new Residential Tenancies Act 2010 (NSW), which commenced yesterday, 31 January 2011, and the question of whether you, the share house occupant, are covered by the Act. The new Act makes some important changes to the law in this regard, particularly where – as is often the case in share houses – an occupant does not have a written tenancy agreement with the landlord or with another occupant who has a written tenancy agreement with the landlord.

To illustrate the changes, we'll use a very simple example of a typical share house of two persons: Ernie, who has a tenancy agreement with the landlord, and Bert, who does not.

(Share house occupants, Ernie (at left) and Bert.)

In the old 1987 Act there was no express mention of share housing, and whether a share house occupant was covered by the Act depended on the nature of the arrangements in their particular share house. In our example, Ernie would clearly be covered (he's a tenant of the landlord). Bert might be covered: possibly as a sub-tenant of Ernie; possibly as a sub-tenant of some other person on the agreement with Ernie (I don't know, let's say Elmo) who has since moved out. Or Bert might not be covered: he might be merely Ernie's lodger.

In the absence of a written agreement that sets out Bert's status, the question of whether Bert is a sub-tenant (covered by the Act) or a lodger (not covered) would be determined by a variety of factors, such as whether Bert has a lock on his room (tends to show he's a sub-tenant), whether Ernie supplies meals or linen, or performs services like cleaning (tends to show Bert's a lodger), or whether Ernie sets 'house rules' or otherwise controls the premises (lodger).

The new Act changes that. It makes answering the question simpler – at the expense of excluding many share house occupants from the Act. See s 10 on 'shared households':

10 Application of Act to occupants in shared households

A person who occupies residential premises that are subject to a written residential tenancy agreement, is not named as a tenant in the agreement and who occupies the premises together with a named tenant is a tenant for the purposes of this Act only if:

(a) a tenant under that agreement transfers the tenancy to the person or the person is recognised as a tenant (see Part 4), or

(b) the person is a sub-tenant of a tenant under a written residential tenancy agreement with that tenant.

So, to use our example, Bert's covered if he has a written residential tenancy agreement with Ernie (s 10(b)) (or if Ernie's former co-tenant Elmo transferred his share of the tenancy to Bert (s 10(a)). Otherwise, Bert's not covered, regardless of those other factors.

In almost all of the share house arrangements we at the TU have dealt with, there are no written agreements between occupants. This will have to change, if share house occupants want to be covered by the Act.

Note, however, some qualifications on s 10.

First, it applies only where the premises are subject to a written residential tenancy agreement. So if Ernie's tenancy is on the basis of a handshake with the landlord and nothing more, s 10 does not apply, and Bert's status will be determined according to the old tests. There would be a few share houses like this, especially where the landlord is a family friend or relative of one of the occupants, or where a landlord has said to a mate, 'move in and see what you can do with the place,' and the mate starts running it as a boarding house. These occupants might still be excluded as lodgers, but not by operation of s 10.

Second, s 10 applies only where a share house occupant occupies 'together with a named tenant'. In other words, if Ernie does not occupy the premises (maybe he just pops in from time to time), Bert's status will be determined by the old tests. This sort of arrangement is becoming quite common: a person rents a house or flat, doesn't live in it themselves but lets it out to students – often international students – who are stacked several to a room. As above, these occupants might be lodgers and excluded for that reason, but not because of the s 10 test.

Perhaps the most positive way to view s 10 is as an opt-in provision. If you're an occupant in a share house – whether a new share house or one from way back before the new Act commenced – consider making a written agreement with your fellow occupants in order to get in on the Act.