Sub-letting and Residential Tenancies (NSW)
It is common for a person leasing a residential property to want to sub-let all or part of that property to another person. It is also common for the tenant to seek to transfer the tenancy to another person. In New South Wales, the laws relating to transferring and sub-letting residential leases are contained in the Residential Tenancies Act 2010. This page deals with sub-letting and residential tenancies in New South Wales.
Transferring a tenancy
A person transfers a tenancy to another person when they want to vacate a property before the end of a fixed-term lease. The new tenant is assigned all of the old tenant’s interests in the property under the lease.
Sub-letting a tenancy
A person (the head tenant) sub-lets a tenancy when they want to lease all or part of the property to another person (the sub-tenant), while remaining on the lease. When this occurs, the head tenant remains responsible to the lessor for the property, while the sub-tenant becomes responsible to the head tenant.
This may occur when the head tenant rents out a spare room, when the head tenant rents out the whole property for a period while they go on holiday, or for some other reason.
Landlord’s permission is needed
Under section 74 of the Residential Tenancies Act 2010, the written consent of the lessor is needed to transfer or sublet a residential tenancy.
Under section 75 of the Residential Tenancies Act 2010, the landlord may refuse to give consent whether or not it is reasonable to do so. However, if the tenant is seeking only to transfer the tenancy or partially sub-let the premises resulting in one or more people in addition to the tenant occupying the property, the lessor must not unreasonably refuse to give consent.
A landlord may withhold consent to partially sub-let premises if:
- The number of proposed occupants is more than the number permitted;
- The proposed tenant is listed on a residential tenancy database;
- The lessor reasonably believes that the premises would be overcrowded.
If the landlord is a social housing provider, they may refuse only on the basis that the number of proposed occupants is more than permitted.
Where landlord’s permission is not given
If a tenant sub-lets a property without the consent of the landlord, they are in breach of their tenancy agreement. However, consent is not required for additional occupants to live in the property. However, the maximum number of occupants must not be exceeded.
Applying to NCAT
If a landlord refuses to give permission to transfer or sub-let a tenancy, the tenant may apply to the NSW Civil and Administrative Tribunal (NCAT). This application may be made online, in person or by post. A fee of $54 applies for an individual, $108 for a corporation, or $13 for a person who is receiving legal aid or assistance form a community legal centre. The application must be made within 28 days of the refusal.
After a tenancy application is received, it is listed for conciliation and hearing.
At conciliation, parties will be encouraged to reach an agreement with the assistance of a conciliator who will facilitate open discussion and help parties to identify issues in dispute and come up with possible solution.
If parties cannot reach an agreement at conciliation, the matter will proceed to hearing. At the hearing, NCAT will hear evidence from both parties. If it is satisfied that the landlord’s refusal to consent was unreasonable it may make an order allowing the tenant to transfer or sub-let the property.
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