Subletting / Assignment
Roommates / Shared Accommodation
Living with a Roommate
The Residential Tenancies Actdoes not address the rights and obligations that tenants have to one another. It is common for roommates to enter into roommate agreements so that each tenant knows their rights and obligations.
A roommate agreement can include things like:
- how rent is to be split and paid to the landlord;
- how bills will be split;
- how the rental property will be shared;
- when notice to move out must be given to the other roommate(s);
- how the security deposit will be handled if one roommate leaves; and
- how chores will be split in the rental property.
Roommates can add other terms as long as all roommates agree on them. A sample roommate agreement can be downloaded here.
For further information, see our tip sheet on Shared Accommodation and the LawNow article Co-Tenants and Co-Responsibilities.
Living with the Landlord
If a tenant shares living space with the landlord, then the Residential Tenancies Act does not apply. A common example of when the Residential Tenancies Act does not apply is when a tenant rents a room in the landlord’s home and shares the kitchen and living room with the landlord.
Since the Residential Tenancies Act does not apply, if the tenant did not pay rent one month, the landlord is under no obligation to give the tenant a 14-day notice to end the tenancy. The landlord could ask the tenant to leave immediately for failing to pay rent. Tenants who live with their landlords do not have the same protections as tenants who are covered by the Residential Tenancies Act.
If the landlord and tenant share living space, it is a very good idea to have a written contract setting out the rules that both the landlord and tenant must follow to provide some basic protections. For tenants, a sample “Living with Your Landlord Agreement” can be downloaded here.
Roommates – Frequently Asked Questions
How many people can live in a house or apartment?
Does each roommate need to sign the lease?
If a roommate has not signed the lease, are they still responsible for conditions in the lease like shoveling snow?
If a roommate moves out, does the landlord have to return part of the security deposit?
NEW One of my roommates is moving out and we don’t have anyone new to move in right away. Is he still responsible for his share of the rent?
NEW I live with my landlord and we keep arguing about everything. What can I do?
NEW What can I do if I have a problem with my roommate?
When a rental property is sublet, the original tenant moves out of the rental property and a new tenant (the subtenant) moves in to take his or her place but the original lease stays in place. Often, the original tenant expects to move back into the unit. For example, students commonly sublet their rental units for the summer from May to August with plans to return in September.
The original tenant is still legally responsible for all of the obligations under the lease and under the Residential Tenancies Act. For example, if the new tenant fails to pay rent, the landlord can collect unpaid rent from the original tenant. The new tenant who sublets is also responsible for the obligations of the lease.
Before subletting, the original tenant must receive consent from the landlord to sublet the property. The landlord can only refuse to consent to the sublet if there are reasonable grounds to refuse. For example, if the prospective tenant does not pass a credit check, the landlord may refuse to sublet. If the landlord refuses to sublet, the original tenant must receive written reasons for the refusal within 14 days. If the landlord does not respond to a request to sublet within 14 days, the law says the tenant can assume the landlord consents to the request. The landlord cannot charge the tenant a fee for consenting to the sublet.
The original tenant may want to enter into a fixed term agreement with the tenant who sublets the property. The agreement should include all of the obligations from the original lease, which ensures that the new tenant is aware of all of those obligations. The new tenant can either pay rent to the original tenant or, if the landlord consents, pay the landlord directly.
Assignment is when a tenant finds someone to take over his or her lease agreement. It is a good option if a tenant does not plan on returning to the property.
If a tenant finds someone who wants to take over the lease agreement, the tenant must get written permission from the landlord to assign the lease. A landlord can only refuse the request to assign the lease if there are reasonable grounds (i.e. the new tenant refuses to fill out an application form or cannot pay the rent). If the landlord refuses the request, written reasons for the refusal must be provided to the tenant.
A landlord must respond to the request to assign within 14 days. If the tenant does not hear from the landlord within 14 days, the law says the tenant can assume the landlord consents to the request. The landlord cannot charge the tenant a fee for consenting to the assignment
If a tenant gets permission to assign the lease, a release should be signed between the landlord and tenant. A release is a new agreement that discharges the tenant from all of his or her obligations to the landlord. For example, a signed release would protect the tenant from having to pay rent if the new tenant didn’t pay it in the future.
The benefit of assignment is that the tenant is no longer responsible for anything to do with the rental unit once the lease has been assigned and a release has been signed.
Question: What is the difference between assignment and subletting?Answer:
Assignment and subletting occur in instances when an existing lessee (tenant) wishes to abandon his lease before the date specified in the lease agreement.
An assignment of a lease is the transfer of the entire property and giving over of proprietary rights under the lease to a new tenant. A sublease only transfers a part of the interest in the property. So when you assign a lease you give up your rights in relation to the property and the lease, when subletting you retain these rights and share them with the sublessee.
A sublease can apply to a physical part of the property, or for a period of time within the existing lease. This might happen when an existing tenant, the ‘head tenant’, wishes to rent out a part of the property such as a room or a basement to another person, the ‘sub-tenant’, without giving up the entire property, OR if they wish to rent out the entire property for a period of time within their fixed-term lease. The sub-tenant treats the head tenant as their landlord, as the head tenant retains his tenancy agreement with the actual landlord and assumes liability on behalf of the sub-tenant for any loss or damage they may cause.
You will need the consent of the landlord in order to assign lease or sublet – before you do so, speak directly with your landlord or consult a leasing lawyer.
Answered by Emma Jervis
Emma is an experienced franchise lawyer and litigator who has successfully helped many clients achieve commercial and workable solutions to their legal problems. With over 10 years legal experience, Emma has run many cases in all tiers of the NSW Court system and Family Court of Australia, as well as having many years experience in advising clients of their legal rights in both the commercial and family law spheres. Emma is also experienced in drafting a range of documents, including franchise documents and complex commercial contracts.