June 23, 2021

What rental owners and occupiers need to know about sub-letting

In most instances, the process of renting a property is simple. Suitable rental occupiers apply, are accepted and move into the home. But when it comes to sub-letting, things can get a little murkier.

So here’s what rental owners and occupiers need to know about sub-letting.

What is sub-letting?

Sub-letting is when an existing rental occupier rents a room or portion of a property to another party who is not on the rental agreement.

Or as realestate.com.au explains, it is when a rental occupier transfers part, but not all, of their legal interest under the rental agreement to another person.

In the interim, the original rental agreement between the initial rental occupier and the rental owner continues, so the first rental occupier has the legal responsibilities, such as paying the rent.

Sub-letting is a pretty common occurrence, particularly when it comes to cities where rents might be higher, and it is legal in all states and territories of Australia.

That said, sub-letting does come with some rules and general guidelines.

So here’s what you need to know…

Permission needs to be sought

If you are a rental occupier considering renting a portion of a property to a third party, you need to seek permission from the rental owner.

After all, this is their financial asset. In most cases, the rental owner cannot withhold that permission without good reason, but they do need to give you the go-ahead before you bring in an additional resident.

The main reason a rental owner may withhold permission is overcrowding of the property.

It needs to be documented

Although it’s not mandatory, it is best practice to document the arrangement you make with a sub-rental occupier.

Most tenant’s unions have sample documents on their websites that you can refer to.

The bond

If the head rental occupier takes a bond from the sub-rental occupier, it is the head rental occupier’s responsibility to lodge that bond with the relevant authority.

Rights and responsibilities of rental occupiers

Once a sub-letting agreement is in place, the sub-rental occupier has the same rights and responsibilities as all other rental occupiers at the property.

That means they are responsible for a portion of the rent, and they are required to keep the property tidy and in good repair. Their agreement to do this, however, is with the initial rental occupier.

Considering sub-letting?

Sub-letting can make it easier to manage the cost of a rental property, while also allowing you to enjoy the social benefits of a shared living arrangement.

But as a rental occupier, it’s important you understand the responsibilities involved.

Although you may have an agreement with a third party to rent a room or portion of the property, and you may have sought permission from the rental owner, responsibility for the property still lies with you as the initial rental occupier.

In other words, choose your room mates carefully, ensure you have permission, and document the arrangement in writing.

How we can help

Our experienced property managers pride themselves on establishing great relationships with both rental occupiers and owners.

We manage every property as if it were our own and you can learn more about our property management services here.

Alternatively, if you are looking to rent a property, you can view the properties we currently have available here.