Sub-tenancy or sub-letting is when one tenant (known as the ‘head-tenant’) transfers part (but not all) of a tenancy to another person. A room may be sub-let, or an entire property may be sub-let for a set period that is less than the duration of the head-tenant’s own lease.
Sub-letting arrangements are covered by the Residential Tenancies Act 1997: the head-tenant becomes the landlord; the sub-tenant is the tenant. The head-tenant can be held responsible for any loss that the property owner suffers because of the actions of the sub-tenant. At the same time, the head-tenant has the same responsibilities to the sub-tenant that a landlord has.
Factors that may indicate a sub-tenancy as opposed to a co-tenancy are as follows:
- the sub-tenant has ‘exclusive possession’ of a room or part of the property
- the rent and/or bond receipts are in the name of one tenant only
- one tenant collects the rent from the other(s) and pays it to the landlord
- one tenant is responsible for all dealings with the landlord
- one tenant moved in before the other(s) and the later tenant(s) paid bond to the first tenant
- one tenant signed the tenancy agreement with the property owner or agent and the other(s) did not
A tenant must not sub-let all or part of the rented premises without the landlord’s written consent. Without the landlord’s written consent, the sub-lease is invalid. However, the landlord must not unreasonably withhold consent and a tenant can apply to the Victorian Civil and Administrative Tribunal seeking an order that the premises can be sub-let if they believe that the landlord is being unreasonable.