Sharing a house or flat with other people can either be a co-tenancy, when all tenants have equal status, or sub-letting, when there is a head tenant and sub-tenants. Problems often occur when you share with other tenants. One of the main reasons for this is that the Residential Tenancies Act 1997, which sets out the rights and responsibilities of tenants and landlords, does not account for co-tenancy situations, and does not cover the rights and responsibilities of co-tenants to each other.

Co-tenancy or sub-letting
Sub-letting is when one person rents a property from a landlord and, in turn, rents out part of the property to someone else. They may rent out part of the premises (eg one room) or may rent out the whole place to someone else for a part of the time that they have the lease (eg renting the property to someone else for 2 months of their 12-month lease). The person who has the agreement with the owner is called the head tenant and those who rent from a head tenant are called sub-tenants. The tenancy agreement between the head tenant and the sub-tenant may be for a fixed term or periodic (month to month). The head tenant may or may not live at the rented premises. The head tenant is considered to have made another tenancy agreement, where they are seen to be acting as the landlord, but they have also kept part of the lease with the owner to themselves. This means that the head tenant has kept the right to take back the room or property which they have sub-let, provided that they act according to the law.

Note - a sub-letting situation is different to an assignment, where the original tenant transfers the tenancy agreement to someone else. See the Assignment and sub-letting leaflet for more information.

It is not always clear when you are in a sub-letting or co-tenancy situation; this is a complicated area of the law. Circumstances which may indicate a sub-letting situations are

• the rent or bond receipts are in the name of one tenant only
• one of the tenants collects the rent from the others and pays it to the landlord
• one of the tenants is responsible for all the dealings with the landlord (eg repair requests, giving notices)
• one tenant moved in before the other and the later tenant paid bond to the first tenant
• one tenant signed a written agreement and the other did not

None of these circumstances alone will prove there is a sub-letting or co-tenancy situation, as the legal situation depends on the facts in each particular situation.

While it is not always clear when a sub-letting situation exists, the difference between this situation and a co-tenancy can be important if a dispute arises between yourself and another person you live with. A dispute between a head tenant and a sub-tenant can be taken to the Victorian Civil and Administrative Tribunal and the Residential Tenancies Act 1997 applies. The Tribunal cannot, however, deal with disputes between co-tenants; people in these situations may need to take action in the Magistrates' Court, which is much more expensive, time consuming and risky.

Many of the problems in sub-letting or co-tenancy situations can be prevented by following a few simple steps at the start of the tenancy.

Names on the lease
You should ensure the names of all tenants are on the lease, or that the landlord or agent has been informed in writing of any changes in the occupants of the premises (keep a copy of any correspondence). Tenants sharing a property are 'jointly and severally liable' under a tenancy agreement. This means that in a co-tenancy any one individual can be held responsible for the actions of all the tenants and for the total amount of rent owing. Alternatively, the landlord can hold all of the tenants responsible. If the names of all the tenants are included on any written agreement, or are known by the landlord, it is more likely the landlord will take action against all the tenants, rather than any one individual having to take full responsibility.
If someone new moves in after the tenancy has commenced, you should notify the landlord or agent and obtain their agreement, in writing if possible. This is important for two reasons.

The Residential Tenancies Act 1997 states that tenants cannot assign or sub-let rented premises without the landlord's consent. If the tenant does not get that consent, the landlord can give the tenant a 14-day Notice to Vacate. If this happens, you should contact the Tenants Union or a tenant advice service immediately. If the landlord unreasonably refuses consent, you can apply to the Tribunal for an order that the landlord's consent is not required. The landlord or agent cannot charge a fee for consenting to an assignment or sub-letting.

If one tenant is leaving and another is taking over the tenancy, the outgoing tenant can continue to be held responsible under the lease, unless the landlord's permission for the assignment is obtained. In this situation, you should make sure the name of the tenant who is leaving is taken off the lease and replaced with the name of the new tenant, and that the Residential Tenancies Bond Authority is notified of the change of tenants. This may involve asking the landlord or agent to inspect the property at the time of the changeover to determine if there is any liability on the part of the outgoing tenant for damage. You may also want to request that a new Condition Report be filled out. When bond money is paid by the new tenant to the old tenant, the old tenant should provide a letter to the new tenant stating this is the case, and notifying the landlord that this has been done.

Rent and bills
You need to develop a system for the payment of rent and bills. Often one person in a shared household will take responsibility for the payment of rent or bills. Problems can then arise when that person fails to make the payment or other householders fail to pay their share. If you have paid your share of the rent, but someone else has not, the landlord can start proceedings to have all of you evicted if the rent is more than 14 days in arrears, ie the landlord will not just take action against the person who has not paid.
Leaving a shared household

Make an agreement about how much notice is to be given if someone wants to leave or is being asked to leave. Once again, the Residential Tenancies Act 1997 does not cover co-tenants in these situations. However, if a tenant's name is on a fixed-term lease, that tenant will continue to be held responsible under the agreement, even if not living in the property, until the tenancy is properly terminated and everyone leaves. This is one of the most difficult areas in shared households and tenants should make an agreement about how to deal with these issues at the start of the tenancy.

Getting advice
Unfortunately, the Tenants Union cannot help in co-tenancy disputes because we are not able to take sides between tenants. One way of resolving disputes is through the Dispute Settlement Centre on % (03) 9603 8370 or toll free % 1800 658 528, but both parties to the dispute must agree to go. If you need legal advice you can contact the Federation of Community Legal Centres on % (03) 9602 4949, who can refer you to a legal centre in your area. Community legal centres provide free legal advice to eligible clients.
For more information, contact the Tenants Union on % (03) 9416 2577