This website is for use by legal professionals (lawyers and law practices) only. If the information is used incorrectly, you could risk losing money or your legal rights. If you are a member of the public looking for free advice about your legal problems please visit legalaid.vic.gov.au, or contact our Legal Help advice line on 1300 792 387, Monday to Friday from 8 am to 6 pm. 

If you decide to use or rely on the information or make decisions based on the information in this website (which VLA does not recommend) VLA is not liable to you or any third party in any way for any loss, damage, costs or expenses you or they may suffer or incur as a result.

Co-rentals

Information about co-rental (co-tenancy) arrangements in share house situations, including what happens if a renter leaves before the agreement ends.

A co-rental (formerly co-tenancy) is created when 2 or more renters share a rented property and sign a residential rental agreement (lease) together. Each renter's name will appear on the rental agreement and the 'Bond lodgement' form. If all renters are not on the rental agreement then it may be a sub-tenancy or licence agreement.

Responsibilities

Co-renters are equally responsible for paying the bond, rent and household bills. This is because the Residential Tenancies Act 1997 is written as though there was only one rental provider (formerly landlord) and one renter. The legal relationship is between the rental provider and the renter. Therefore, co-renters are indivisible. Sometimes co-renters do not realise the importance of this legal relationship that they are entering into between the rental provider and renter/s. Apart from situations of family or personal violence, there is no provision for disputes between renters at VCAT in the Residential Tenancies List. This causes many problems, an important one being that services like Tenants Victoria will not assist co-renters who are in dispute because they don't want to take any action which may harm another renter.

Renters are jointly and individually responsible under a residential agreement. An individual renter can be held responsible for the actions of all the renters, for example, if rent is owing or there is damage to the property. Alternatively, rental providers can hold all renters jointly responsible. Generally rental providers will do whatever is the easiest way to recover their losses.

All other rights and duties of rental providers and renters of share houses are outlined in the Residential tenancy topic.

Changing co-renters

When the members in a co-rental are changing, it is important to let the rental provider know. The rental provider should vary the agreement, that is take the names of the people leaving off the rental agreement and put in the names of the new renters. This should be done in writing.

The rental provider should come and inspect the property and fill out a condition report. This protects the renters who leave from being liable for any damage done after they leave, It also protects the new renters if damage was done to the property before they began living there. It is a good idea to take photos and to keep them as a record of the condition of the property at that point in time.

See Condition reports.

Bonds

If one housemate moves out before the end of a rental agreement, they can still be held responsible by the rental provider for any claims (such as outstanding rent or property damage). The bond initially paid by all the housemates is held for the entire term of the rental agreement.

However, the other housemates or the replacement renter can agree to pay the outgoing renter their share of the bond. This leaves the outgoing renter vulnerable as they may be held responsible for damage done after they leave. The incoming renter is also vulnerable as there is no formal record of them having paid bond.

If they agree to transferring the bond, they must send a 'Tenant transfer' form to the Residential Tenancies Bond Authority (RBTA) within 5 days of the change. The rental provider must also sign this form. This is an important step. If the Bond Authority is not informed in this way, it may be difficult to get the bond refunded if the person who originally paid bond cannot be found when the rental agreement ends.

See Bond repayments.

Apply for a bond repayment order

From 29 March 2021, any person with an interest in a claim for bond may apply to VCAT for an order that requires the bond authority to repay the bond. This includes a previous renter in a rental agreement. The former renter will need evidence that they made a bond payment.

The person must apply within 14 days of the end of the rental agreement.

See Bond repayments.

Assignment if all interest in a property is transferred

If a co-renter transfers their whole interest in the property to another person it is known as an assignment. The new renter has all the rights and responsibilities of the original renter.

See Residential tenancy—Assignment and sub-letting and Bonds.

If a new renter moves in

The remaining housemates need to get the permission of the rental provider when another person is moving in. Housemates can also request that the rental provider conduct a property inspection and fill out a new condition report. This will protect the incoming renter from being held responsible for damage caused before they moved in.

See Residential tenancy—Condition reports.

Disputes against co-renters

The Residential Tenancies Act 1997 only covers disputes between a renter and a rental provider—not between co-renters. Most co-rental problems cannot be resolved by Victorian Civil and Administrative Tribunal.

Co-renancy disputes can be referred to the Dispute Settlement Centre or the Magistrates' Court of Victoria.

See Dispute Settlement Centre of Victoria(opens in a new window).

One renter wants to leave

A common area of dispute is if one renter wants to leave and the other renters do not want to make that easy for them.

Where there is no fixed term rental agreement

The rule goes back to an English decision of Monk, which held that it would be unfair to expect one co-renter to remain on a rental agreement forever unless their co-renter allows them to leave. The practical approach that VCAT can take is to allow the person who wants to leave to give notice to the rental provider and any other renters.

To do this, the person who is in a periodic (or month by month) agreement and who wants to leave gives 28 days notice to the rental provider, and also notice to the other co-renter/s that they are leaving. They then hand their keys back and leave at the end of the 28 days. The remaining co-renter/s can decide to stay or also give 28 days notice.

If the other renters stay, VCAT will decide that this is either:

  • an implied variation of the rental agreement (if the remaining co-renters pay rent), or
  • a new rental agreement.

The more common is an implied variation to the rental agreement. They will find that the outgoing renter is no longer liable for any damage to the property. Remaining renters can ask that a property inspection and condition report be filled in.

If it turns out later that there is a problem, say the rental provider is claiming that the property has been damaged, or if rent falls behind, the person who has given appropriate notice and left may be named and called to the VCAT hearing. It should be sufficient to prove that they gave 28 days notice to the co-renters and the rental provider to argue that they should not be responsible for later damage or money owed.

If fixed term rental agreement exists

If the co-renters are on a fixed term agreement, the party who wants to leave cannot do so unless they have the agreement of the other co-renters and the rental provider. The legal term used for changing the names of the renters on a fixed term rental agreement is an assignment.

The renter who wants to leave can assign the rental agreement to a third party with the approval of the other renters and the rental provider (consent cannot be unreasonably withheld), or they can assign their share to the other co-renters. If the other renters don't agree or the rental provider doesn't agree, then the person who wants to leave is just stuck with the obligation for the duration of the fixed term.

Where there is an intervention order

There is an exception in relation to family violence or personal safety issues, then despite the fixed term agreement, either the perpetrator, or protected person can make an application to VCAT to end the rental agreement. If perpetrator is excluded from the property under the intervention order, they can apply to have their name taken off the agreement, or the protected person can apply to have the agreement transferred into their name.

See Protections from violence when renting.

Breaking the rental agreement

If one of the renters just moves out anyway and stops paying their share of the rent then (while all renters are between them responsible for the full amount of the rent, (because they are all jointly and severally liable), the renters remaining are usually the ones from whom rent will be sought. If the remining renters fall behind in rent, then the rental provider may issue a notice to vacate based on rent arrears. The rental provider can still pursue the outstanding rent from all of the renters, including any who have left. If an amount is left outstanding at the end of the agreement, then a renter who left can still be pursued for this amount.

In practice, the rental provider will usually just pursue the renter who is easier to find, that is the existing renters/s. The usual scenario is that the remaining renters will fall behind in their rent and the rental provider will issue a notice to vacate based on rent arrears.

Co-renters can sue each other in the Magistrates' Court, in relation to agreements made about how to divide their obligation, but VCAT tenancy list will not get involved.

Dispute Settlement Centre of Victoria

The Dispute Settlement Centre of Victoria helps people resolve disputes through communication and negotiation, which can help to reduce costs, delays and legal action.

See Dispute Settlement Centre of Victoria(opens in a new window).

Magistrates' Court of Victoria

If the matter cannot be settled using dispute resolution, it may be possible for one co-renter to take action against another in the Magistrates' Court.

There are risks involved in following this course of action because of the potential costs involved. This would usually only be considered if the amount of money is significant. Before doing this, renters should get legal advice.

The Magistrates' Court hears matters relating to claims for debts, damages for breach, of contract, damage to property or for injury. If the dispute is about money or property, the court will accept cases up to an amount of $100,000.

For information about starting proceedings in the Magistrates' Court see Magistrates' Court—Starting a civil matter(opens in a new window).

Legislation

Residential Tenancies Act 1997 (Vic)

  • s. 26—rental agreements to be in standard form
  • s. 35—condition report
  • s. 36—condition report is evidence of state of repair
  • s. 81—assignment and sub-letting by a renter
  • s. 91G—termination of rental agreement where premises are sub-let
  • s. 91H—termination where residential rental provider not owner of premises
  • s. 91ZV—assignment or sub-letting without consent
  • s. 91E—termination after notice to vacate
  • s. 419A—person with an interest in claim for bond may apply to VCAT
  • s. 446—jurisdiction of the tribunal

See Residential Tenancies Act 1997 (Vic).(opens in a new window)

Tenants Victoria

Tenants Victoria has a number of publications with information on share houses.

See Tenants Victoria—Share houses(opens in a new window).

Consumer Affairs Victoria

Consumer Affairs Victoria has information about shared households, forms and rental transfers.

See:


Magistrates' Court of Victoria

The court site has information to help people who are starting or defending a civil matter in the Magistrates' Court.

See Magistrates' Court—Starting a civil matter(opens in a new window).

Updated