Lease transfers and subletting

The law allows you to transfer, or ‘assign’, your rental agreement (lease), or your part of your rental agreement, to someone else.

However, you must first get either the rental provider’s (landlord’s) written consent [section 81] or an order from the Victorian Civil and Administrative Tribunal (VCAT) [section 82].

Transferring your rental agreement may be a good option for you if:

• You have a fixed term agreement and want to leave before the end of that agreement
• You live in a share house and want to leave, but your co-renters want to stay
• You want to stay and want to add a new person to your rental agreement

If you want to leave before the end of a fixed term agreement also see our Ending your lease page in case one of the options on that page is better for you.

If you are looking for a new renter to transfer your agreement to, you are entitled to advertise the property yourself for this purpose. However, you still need the rental provider’s written consent before you can go ahead with the transfer.

Note that all the sections in brackets on this page, such as [section 81], refer to Victoria’s Residential Tenancies Act 1997. See the bottom of this page for links to all of these.

If you want to transfer any or all of your rental agreement to another person you must first get the rental provider’s consent in writing [section 81].

If you do not get the rental provider’s written consent the transfer may not be valid [section 81]. You could also be given a 14-day notice to vacate the property if you have transferred, or appear to have transferred, your rental agreement, or part of it, to someone else without first getting the rental provider’s consent [section 91ZV].

The rental provider is not allowed to unreasonably withhold their consent [section 81]. If they do unreasonably withhold consent you can apply to VCAT for an order that the transfer can go ahead without the rental provider’s consent [section 82].

Discrimination

Under Victoria’s Equal Opportunity Act 2010 it is unlawful to discriminate against a person because of a personal characteristic that is protected by the law.

If the rental provider has refused to give consent based on a protected personal characteristic of the person wanting to be transferred onto the agreement, their refusal will be considered unreasonable.

The protected personal characteristics are listed in the Equal Opportunity Act 2010. They include:

• Age
• Disability, including physical, sensory or intellectual disability or mental illness
• Employment activity or industrial activity, including union activity
• Legal sexual activity or sexual orientation
• Erased homosexual conviction
• Gender identity or sex or intersex status
• Marital status
• Being a parent or carer
• Being pregnant or breastfeeding
• Race
• Religious beliefs
• Political beliefs or activity
• Any relationship or connection with anyone with the above characteristics

The renter wanting to transfer the agreement, or part of the agreement, to the person being discriminated against can apply to VCAT for an order that consent is not required [section 82].

The person being discriminated against can apply to VCAT for an order for compensation if they have suffered a loss due to discrimination by the rental provider by not consenting to the transfer [section 210AA].

Fees cannot be charged for consent

The rental provider cannot charge you for giving their consent.

It is against the law and an offence for a rental provider to:

• Demand or accept a fee or payment in exchange for giving their consent
• Refuse to give consent on the ground that you have refused to pay a fee or an amount in exchange for the consent [section 84]

You can report offences to Consumer Affairs Victoria (CAV), which can issue an infringement notice on the rental provider or agent if they failed to follow the law.

If you have paid any money in exchange for getting the rental provider’s consent you can apply to VCAT for an order that this be refunded to you [section 84].

Other costs

You can, however, be asked to pay costs for reasonable expenses, reasonably incurred by the rental provider because of the transfer [section 84].

If you are asked to pay costs that you do not believe are reasonable you may be able to challenge this at VCAT [sections 84 and 452].

This happened in the court case of Jupp v Chambers in 2010, where a renter was asked to pay $335.50 for expenses relating to a transfer. The renter objected to the amount and paid it under protest. The renter later applied to VCAT asking for an order that this be refunded to her. VCAT found that the amount the renter was asked to pay was not reasonable for the work done for the transfer and ordered that she be refunded $247.50 of the $335.50 she had paid, reducing the expenses to $88.

If you are asked to pay costs, in Tenants Victoria’s opinion these costs generally should not cost more than around $125.00.

If you are transferring your agreement, or part of your agreement, to another person you also need to arrange for the bond to be transferred.

You and the person to whom you are transferring your agreement, or your part of it, should agree that they pay the bond money directly to you in exchange for your transferring the bond to them.

To transfer the bond you, the new renter, any other renters at the property and the rental provider or agent need to complete a bond transfer form to make sure the new renter is registered on the bond held by the Residential Tenancies Bond Authority (RTBA) [section 425].

If you are arranging the transfer because you are moving out, transferring the bond to the new renter’s name will protect you against any possible future claims made against the bond when the rental agreement ends. The bond transfer form must be completed and lodged with the RTBA within 5 days of the transfer [Section 425].

Bond transfer process

Bonds are mostly managed electronically using the RTBA Online website.

For bond transfers the rental provider, or agent, should prepare the bond transfer form through RTBA Online.

The RTBA will then send an email with a link to the form to all the renters involved in the transfer, who are you, the new renter and any other renters listed on the bond.

The email will ask everyone to review the form and confirm the transfer. If any information is incorrect, there will be an option for you to ‘request changes’ to allow you to edit the information.

Once everyone has confirmed the transfer and the new renter is registered on the bond, the RTBA will email out a confirmation. The transfer is then complete.

Paper and PDF forms

If you do not have internet access and need to transfer the bond using a paper bond-transfer form you can call the RTBA on 1300 137 164 to request one.

You can also download the form at RTBA Online. To do this you first need the bond number. Enter the bond number and your name on the main page. You will then be taken to a page that gives you your bond summary. On this page you will be able to select ‘Transfer this bond’ which will take you to another page where you can generate a bond transfer form in a PDF format.

A, B and C rent a property together and each paid an equal share of the bond. A and B want to stay at the property, but C wants to move out and D wants to move in.

The bond paid by A, B and C at the start of the rental agreement acts as a security over the property until the rental agreement ends. As only C is moving out the rental agreement is not ending so C’s bond will not be refunded by the RTBA.

For C to get their bond back they need to arrange a bond transfer with D, with C paid their share of the bond by D and D replacing C on the bond held by the RTBA.

Renter A, Renter B, Renter C and Renter D and the rental provider or real estate agent complete and sign the bond transfer form.

The transfer form is sent to the RTBA. If the rental provider or real estate agent do this online, the RTBA will email the renters asking them to review and confirm the transfer.

Renter D is registered on the bond and the RTBA sends out confirmation.

This example assumes there are no problems with the property and that C would receive a full refund of their share of the bond if the tenancy were ending.

Infographic

See our infographic on this topic.

Subletting is when a renter, as the ‘head-renter’, transfers part of their ‘interest’ under their rental agreement to another person, the ‘sub-renter’, but not the agreement itself.

Subletting is different from a transfer, where a renter is transferred to an existing rental agreement. It is also different from the much more common co-renting situation, where all the renters are on the rental agreement.

The head-renter’s rental agreement with the rental provider stays in place and the sub-renter enters into an agreement to sublet the property, or part of the property, from the head-renter, not from the rental provider.

The relationship between the head-renter and the sub-renter will be the same as that between the head-renter and the rental provider. All the same rights and responsibilities apply.

For example, if the sub-renter noticed any repairs were needed at the property they report this to the head-renter, not the rental provider. It would then be up to the head-renter to arrange with the rental provider to get the repairs done. If the repairs were not done, and the sub-renter wanted to make a claim for compensation because of this, they would make their claim against the head-renter, not the rental provider.

Consent to sublet

If you want to sublet your rental property, or part of it, to someone else, you must first get either the rental provider’s written consent [section 81] or an order from VCAT [section 82].

If you do not get the rental provider’s written consent the sublet may not be valid [section 81]. You might also be given a 14-day notice to vacate if you have sublet, or appear to have sublet, your rental property, or part of it, to someone else without first getting the rental provider’s consent [section 91ZV].

The rental provider is not allowed to unreasonably withhold their consent [section 81]. If they do, you can apply to VCAT for an order that the sublet can go ahead without the rental provider’s consent [section 82].

The rental provider cannot charge a fee in exchange for giving their consent.

If you are thinking about becoming a sub-renter you should arrange with the head-renter to see the written consent to sublet from the rental provider, or the VCAT order that allows them to sublet the property.

Subletting and bonds

A head-renter essentially becomes a rental provider when they sublet a property and must follow all the laws relating to bonds if a bond is paid by the sub-renter. This includes preparing a bond lodgement form and making sure the bond is lodged with the Residential Tenancies Bond Authority.

For more information see our page on Bonds.

Subletting examples

One example of a subletting situation is when a head-renter rents out a room or rooms for the ‘exclusive possession’, or exclusive use, of another person, the sub-renter.

Another example is when a head-renter rents out the entire property to another person, the sub-renter, for a couple of months, such as when they are going on an overseas trip.

If only part of the property is being sub-let, and the head-renter is also living at the property, for it to be a valid sublet it must be very clear that the sub-renter has ‘exclusive possession’ of at least part of the property.

There can be confusion about whether a renter is a co-renter, sub-renter or a licensee.

It is important to know what rental arrangement you have, especially if you are not on the rental agreement, as not all arrangements fall under the Residential Tenancies Act 1997.

Co-renting

Co-renting is the most common type of shared housing arrangement. This occurs when 2 or more renters enter into a rental agreement with the rental provider, and everyone’s name is on the agreement.

The rental agreement falls under the protections of the Residential Tenancies Act 1997, which sets out the rights and responsibilities of renters and rental providers. Any disputes between the renters and the rental provider that cannot be resolved can be decided by VCAT under its Residential Tenancies List.

Subletting and ‘exclusive possession’

If a person is sharing part of a rental property with another person, without a rental agreement with the rental provider, they are not necessarily subletting. If they are not subletting they may not have the renter protections of the Residential Tenancies Act 1997.

Legally speaking, to be a renter who is subletting you must have ‘exclusive possession’ of all or part of the rented property.

Examples of ‘exclusive possession’, include:

• Renting a room in a rental property that has a lockable door when you are the person with the key to that room
• Renting a separate part of a rental property, such as an outside studio, when you are the only person who accesses and uses that space

If you have ‘exclusive possession’ of a property, or part of it, that you are renting from another renter, who is the ‘head-renter’, rather than from the rental provider, you are considered to be a renter under the law and have all the rights, responsibilities and protections of the Residential Tenancies Act 1997.

Any disputes between you and the head-renter that cannot be resolved can be decided by VCAT under its Residential Tenancies List.

Other circumstances that may indicate a subletting arrangement include:

• One renter signed a written rental agreement with the rental provider and the second renter did not
• One renter moved in first, and had the bond is registered in their name, and the second renter paid their share of the bond to the first renter
• One renter collects the rent from the second renter and pays it to the rental provider
• One renter Is responsible for all dealings with the rental provider, such as reporting repairs or giving notices

However, none of these circumstances alone will prove that there is a subletting arrangement, as the legal situation depends on the facts in each individual case.

Licensee arrangements

You may be considered to be a ‘licensee’ if you do not have a rental agreement with the rental provider and are not subletting – you do not have ‘exclusive possession’ of the property you are renting, or part of that property.

Licensee arrangements are not covered by the Residential Tenancies Act 1997, so you will not have the rights, responsibilities and protections renters usually have under those laws.

Any disputes between you and the person you are renting from could be decided by VCAT under the Australian Consumer Law and Fair Trading Act 2012 (Vic) in its Civil Claims List. You would not have the same rights that renters have under the Residential Tenancies Act 1997. 

If you share a house with the rental provider, you are presumed to be a licensee, unless you can show you are subletting – that you have ‘exclusive possession’ over the part of the property you are renting.

Disputes between renters

Tenants Victoria is unable to give advice on disputes between co-renters as we cannot take sides between renters.

VCAT can decide disputes between sub-renters and head-renters, but cannot deal with disputes between co-renters.

One way of resolving disputes is by mediation through the Dispute Settlement Centre of Victoria. However, all renters in the dispute must agree to go to mediation. Call the Dispute Settlement Centre on 1300 372 888 or visit its website.

If you need legal advice the Federation of Community Legal Centres (FCLC) can refer you to a legal centre in your area. Community legal centres provide free legal advice to eligible people, but not all of them are able to advise on rental matters or disputes between co-renters. Call the FCLC on 9652 1500 or visit its website.

Bonds
Share houses
Ending your lease
Lease breaking
Notice to vacate
Eviction