Depending on the arrangements in your share house, you may be any one of the following categories.
If you and another person are tenants under the same agreement with the landlord, you and the other person are co-tenants. (If you and another person share premises but have separate agreements with the landlord, you are not co-tenants.)
Co-tenants have legal rights and obligations to the landlord under the tenancy agreement, for which they are ‘jointly and severally’ liable. This means that any one co-tenant can be held liable for the actions of any other co-tenant.
Generally, co-tenants also have rights and obligations in relation to each other – for example, about what share of the rent and bills each will pay – under what’s called a ‘collateral contract’. The collateral contract is usually just a spoken arrangement, but it can be enforced in court proceedings.
A co-tenant can, with the consent of the landlord, transfer their share of the tenancy to another person. Alternatively, a co-tenant can terminate their tenancy and liability under a tenancy agreement in accordance with the Residential Tenancies Act 2010(NSW) (the RT Act 2010).
This is changed
The Residential Tenancies Act 1987 (NSW) (the RT Act 1987) made no provision for just one co-tenant terminating their tenancy rights and obligations.
If you are a tenant under a tenancy agreement with the landlord, and let another person occupy the premises for rent, you are a head-tenant. Depending on the arrangements you’ve made, the other person may be a sub-tenant or a lodger. In relation to a sub-tenant, you have all the rights and obligations of a landlord under the RT Act 2010. In relation to a lodger, you have all the rights and obligations of a licensor under the common law of lodging (see the section on Marginal rental for more about lodging). In relation to your landlord, you have all the usual rights and obligations of a tenant.
Generally speaking, if you have a written residential tenancy agreement with a head-tenant to occupy premises with them, you are a sub-tenant (section 10). In relation to the head-tenant, you have all the rights and obligations of a tenant under the RT Act 2010. You have no contractual relationship with the landlord; your ‘landlord’ is the head-tenant.
Generally speaking, if you occupy premises with a head-tenant but do not have a written residential tenancy agreement, you are a lodger (section 10). You are not covered by the RT Act 2010, and in most circumstances you will have the (minimal) rights and obligations of a lodger under the common law. You have no contractual relationship with the landlord.
In some unusual circumstances, however, a share house may fit the definition of a ‘registrable boarding house’ of the Boarding Houses Act 2012 (BH Act). The key requirement is that the premises provide beds for five or more residents, not including the head-tenant or their co-tenants (section 5(2)). If the premises are a registrable boarding house, you will have an occupancy agreement subject to ‘occupancy principles’ set out in the BH Act. The head-tenant, as the ‘proprietor’ of the premises, will also have to register the premises as a registrable boarding house with NSW Fair Trading.
This is new
Prior to the BH Act, there were no ‘registrable boarding houses’ or ‘occupancy agreements’, and lodgers had common law lodging agreements only.
Am I a sub-tenant or a lodger?
Section 10 of the RT Act 2010 introduces a new test for whether an ‘occupant in a shared household’ is covered by the Act (as a sub-tenant) or excluded from the RT Act 2010 (as a lodger). Generally speaking, you must have a written residential tenancy agreement to be covered. (This includes where your share house was established before the RT Act 2010 commenced on 31 January 2011.)
A ‘written residential tenancy agreement’ does not have to be the many-paged document produced by NSW Fair Trading or the Real Estate Institute. It appears that if you have a written document of what is, in substance, a residential tenancy agreement, you will be covered.
This is changed
Under the RT Act 1987, there were no provisions about ‘shared households’, and in particular no special requirement that sub-tenants have a written agreement in order to be covered by the act. Instead, the test was whether or not a person met the common law definition of a lodger, which could turn on a variety of factors – see the discussion of the definition in Marginal rental. This meant that it was often difficult to tell whether a person was a sub-tenant or a lodger. Section 10 makes it clearer – at the expense of excluding more persons from the RT Act 2010.
Note, however, that section 10 does not apply to all share housing arrangements. If the premises are not subject to a written tenancy agreement (that is, there is no written agreement between the landlord and the head-tenant), section 10 does not apply. Also, if the head-tenant (the ‘named tenant’ under the agreement) does not occupy the premises together with you, section 10 does not apply. In these cases, refer to the old common law definition of a lodger to determine if you are covered by the RT Act 2010.