Sharing a home can no doubt save a tenant a hefty chunk of rent money. It is considered a smart and very practical option and has become increasingly popular especially among young renters these days. However, tenants in this arrangements should be aware of their legal rights and their responsibilities, and the lessor/agent’s rights and responsibilities as well.
There are provisions directly affecting people in this kind of living arrangement as contained in the Residential Tenancies and Rooming Accommodation Act 2008.
Living arrangements that can be made under the RTRA Act 2008 are:
Co-tenancies – In this legal arrangement, all of the occupants’ names appear on the lease as tenants. The co-tenants who are named on the tenancy agreement are individually and jointly responsible for the home and the rent and at the same time, each of them is liable for the losses the lessor might incur during the course of the tenancy.
The names of each co-tenant must be stated in the tenancy agreement.
Sub-tenancies – The lease names one or more applicants as tenants, who in turn enter into a sub-tenancy agreement with another person or persons to occupy part of the home. This agreement is only between the sub-tenant and the head tenant and does not involve the lessor/agent.
In this arrangement, only the head tenants (those whose names appear on the tenancy agreement) are liable for losses caused under the tenancy agreement. Despite this, the sub-tenant may still be liable to the head tenant if a loss has been incurred in the event the sub-tenant breaches the sublease agreement.
A separate written tenancy agreement must be completed. In this agreement, the head tenant should be named as the lessor and the sub-tenant as tenant. The sub-tenancy agreement must comply with the Act and the standard term. The length of term of the sub-tenancy must not exceed the length of the term of the head tenancy agreement.
Boarding and Lodging – This is where a provider/agent retains head control over the resident’s use of the premises. In which case, it is the provider/agent who provides services such as meals, cleaning and laundry. Sometimes, each occupant has a separate agreement for a right to occupy certain parts of the property.
This arrangement may be covered under the rooming accommodation provisions of the Act, or may not be covered under any tenancy law. Even if the Act does not cover the boarding and lodging agreement, the bond provisions still apply. The relevant forms have to be completed and the bonds for boarders and lodgers must be lodged with the RTA.
Permission from the lessor – It is the right of the lessor to approve of the people residing in their property, let alone be informed about it. Tenants should consult the lessor/agent regarding any changes they plan to make. The lessor/agent will ask prospective co-tenants or sub-tenants to complete an application form for rental. If the lessor/agent approves the application, it must be given in writing.
If the lessor/agent is not informed of the presence of unapproved tenants (tenants whose names are not on the agreement) and they eventually find out about it, conflicts and disputes may likely arise. It is very important that the lessor/agent be notified every time a change occurs.
Bond – The receipt for the bond money must be given by the lessor to the tenants. This is done so the tenants can check the name of each co-tenant in the receipt as well as the amount paid by each.
A Bond lodgement (Form 2) must be secured. Together with the rental bonds, these should be lodged with the RTA within days of being received.
The Bond Lodgement must include:
(a) The names of all people contributing to the bond
(b) The amount of money paid by each co-tenant
(c) The signature of all contributing parties
These bonds must be lodged with the RTA in the same way as other bonds.
Lessor/agents and the head tenants may be prosecuted by the RTA for failing to lodge the bonds of tenants, sub-tenants, boarders and lodgers.