The Plan? Subletting 101
- Posted By Shelley Bays
Subletting 101
Subletting is when a tenant rents out a room or space in their property to someone who isn't on the lease. While it's not illegal to sublet in Australia, the tenant must get written permission from the property owner. Permission is required because when a tenant signs their lease agreement, they enter into a contractual relationship with the property owner, which includes taking care of the property. Part of this responsibility transfers to the person when a tenant sublets their property.
When can tenants sublet in Australia?
If a tenant gets written consent from the property owner, they can sublet the property. And if you withhold consent and don't provide a valid reason, the tenant may take the case to your relevant civil and administrative tribunal. Consent to sublet cannot be withheld if the reason for objecting doesn't have anything to do with the contractual relationship between landlord and tenant, the tenant is respectable and looks after your property, and the reason for objecting is about the impact on potential investors.
When is subletting illegal?
There are some instances when a landlord can object to subletting. If your tenant has a bad rental history, this can be acceptable grounds to object. Similarly, if the sub-let will result in the number of people living in the property exceeding the number of people permitted under the lease agreement or planning laws, you can also object. A landlord can also withhold consent to sublet in Victoria for tenants that live in public housing as it is considered unfair to people waiting for availability.
Document the sub-let
The sublet agreement between the head tenant and sub-tenant should be in writing. The agreement should include the start and end date of the subletting agreement, the sub-tenant's responsibilities, and details such as the bond required. Agreement templates can be found on the tenants' union websites for the different states and territories.
Bond lodgement
When the sub-let begins, a bond will generally be lodged with the relevant state body. The head tenant must take the bond from the sub-tenant and lodge it. From here, the sub-tenant needs to make sure they know their responsibilities and take care of the property.
Subletting presents a range of risks to both the tenant and landlord. From potential property damage to security and by-law issues, the landlord often has to deal with the consequences, which can be costly. Make sure you understand the subletting laws in your jurisdiction and understand your rights early in your property investing journey. It will help to protect you and be aware of the potential risks if it's difficult to object to a sub-let request where your property is located. Finally, tenancy laws change regularly, so stay updated through your relevant government departments and tenancy bodies.
Remember, this article is general in nature and is not financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.