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Sub-letting

Information about sub-letting, where a renter lets part of all of their interest in a rental property to someone else.

In a sub-letting arrangement, one individual rents the property then rents out part or all of the property to other/s. The person with their name on the rental agreement is the head renter and the others are sub-renters. The agreement between them is called a sub-rental agreement.

The relationship between the head-renter and the sub-renter/s is the same as that between a rental provider and renter/s, and all the same rights and responsibilities apply. The sub-renter name/s are not usually on the rental agreement.

Must let the prospective sub-renter know

From 29 March 2021 a rental provider (and this includes a head-renter who is sub-letting) must advise a prospective renter if they are not the owner of the property they are renting out.

See s. 30D—Residential Tenancies Act 1997 (Vic)(opens in a new window). and Starting a rental agreement.

Sub-letting and Airbnb

A Supreme Court case, on June 10 2016, held that renters had breached their agreement when they rented out their property on Airbnb. This reverses a VCAT decision earlier that year, which found that renting out a rental property through Airbnb was a licence, not a sub-lease. The judge formed this conclusion because the renters had rented out their entire apartment, not just one room. Under the Residential Tenancies Act 1997, renters must get their rental provider's permission before they sub-let their rental accommodation. This permission cannot be withheld unreasonably.

See:

Sub-letting despite no exclusive possession

In a sub-letting arrangement a sub-renter is able to be covered by the Residential Tenancies Act 1997, even though they do not have a separate entry to their room. This is because VCAT have found that a rental arrangement exists in sub-letting situations, where the right to sub-let is granted by a head-renter. This is despite the common law requirement that a person renting a room have separate entry to be classed as a renter. This enables a sub-renter to fall within the protection of the Act as a renter.

See VLA Learning Hub PLE session—LPE Renting, eviction and homeless services at 3.10.

Responsibility of the head renter (head-tenant)

When the rental provider approves a sub-let arrangement, it is the head renter's responsibility to lodge the bond with the Residential Tenancies Bond Authority within 10 business days of taking the money.

The head renter will also be responsible for all dealings with the rental provider, including the collection and payment of rent and requesting repairs.

The head renter is considered to have made another rental agreement with the sub-renter, while still keeping their original agreement with the rental provider. Agreements can be fixed term or monthly.

See Residential tenancy—Bonds.

Setting up a sub-letting arrangement

Head renters must have their rental provider's written consent to sub-let a rented property. The rental provider can serve a 14-day notice to vacate if the property is sub-let without their permission.

See Residential tenancy—Notices to vacate.

A rental provider must not unreasonably withhold consent to a request to sub-let. It may be reasonable for a rental provider to withhold consent if the sub-renter does not have a good rental history or if they do not have regular income.

If the rental provider is unreasonable, the head-renter can apply to the Victorian Civil and Administrative Tribunal to have the matter decided.

Penalty

A fine of 60 penalty units applies if the rental provider asks for an additional fee for giving consent to sub-let the property.

This matter cannot be dealt with by issuing an infringement notice.

See s. 84—Residential Tenancies Act 1997 (Vic)(opens in a new window).

Sub-letting disputes

Sub-letting disputes between head renters and sub-renter/s can be heard and determined by the Victorian Civil and Administrative Tribunal.

See s. 478—Residential Tenancies Act 1997 (Vic)(opens in a new window) and VCAT—Renting a home.

Can the owner of the property get rid of a sub-renter?

When rental property is sub-let, the owner of the property is no longer the rental provider. The head renter takes on this role. Despite this, the owner may:

  • issue a breach of duty notice
  • issue a notice to vacate, or
  • recover possession of the property.

A notice to vacate issued by an owner is not valid unless it specifies a termination date that is on or after the date when the residential rental provider (that is, the head renter's) interest in the property ends.

See s. 91ZZJ—Residential Tenancies Act 1997 (Vic)(opens in a new window).

More information

Legislation

Residential Tenancies Act 1997 (Vic)

  • s. 30D—mandatory to advise prospective renter if not the owner of the property
  • s. 81—assignment and sub-letting by a renter
  • s. 84—rental provider cannot ask for fee for giving consent to a sub-let
  • s. 91H—termination where rental provider not the owner (that is, when they are the head-renter)
  • s. 91ZZJ—notice by owner
  • s. 221—termination where premises are sub-let
  • s. 91ZV—assignment or sub-letting without consent
  • s. 446—jurisdiction of the tribunal
  • s. 473—powers of the tribunal where 2 or more tenancy agreements affect same premises

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

Tenants Victoria

Tenants Victoria has information about sub-letting.

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:

VLA Learning Hub

Renting, eviction and homeless services

This Legal Practice Essential session has an e-learning module and powerpoint. VLA staff will have to log into the learning hub to access this training. After logging in you will be directed to the relevant page.

See LPE Renting, eviction and homeless services.

Access for Community legal centres

This lecture can be viewed online by Community Legal Centre staff and volunteers. To gain access staff will need to contact the Professional Legal Education team and ask for the link and password. Lecture materials can also be provided on request.

Please email ple@vla.vic.gov.au

Case

Swan v Uecker [2016] VSC 313 (10 June 2016)

This case held that renting out an apartment through Airbnb is sub-letting where the whole apartment was rented out in this way by renters.

See Swan v Uecker [2016] VSC 313 (10 June 2016).

Reference

The Age

See The Age (10 June 2016)—Airbnb: St Kilda landlord succeeds in kicking out tenants over home-sharing agreement.

Updated