Lease transfers and subletting

A lease transfer happens when you transfer your lease (officially called a rental agreement) or your part of it (if you are co-renting with other renters) to a new renter, while you are removed from the lease. It is sometimes called an ‘assignment’.

The information on this page may also be relevant if you are considering joining an existing lease as a co-renter, or if you already live in a share house and want to increase or decrease the number of people in it. When transferring a lease in a co-renting situation, there may be disagreements about finding a replacement renter or who pays the fees for a new lease.

Subletting happens when the person named on the lease (the ‘head renter’) rents out all or part of the property to another person whose name is not on the lease (the ‘sub-renter’). The head renter continues to pay rent to the landlord (officially called the rental provider), while the sub-renter pays their rent to the head renter. For a valid subletting arrangement, the sub-renter must have ‘exclusive possession’ of part of the property (sole use and control), and this can be a complex issue. If you are not considered a sub-renter under the law, you may be a licensee. A licensee does not have the same rights or responsibilities as a renter or sub-renter.

You must receive the landlord’s consent for a lease transfer or subletting arrangement or, if they do not consent, an order from the Victorian Civil and Administrative Tribunal (VCAT), allowing you to do so. If not, and you still go ahead with the transfer or sublet, you may be given a ‘notice to vacate’. However, the landlord cannot withhold their consent unreasonably or due to discrimination.

A private rental is a house, unit or apartment you (or your share house) rent from someone (usually the owner) or through a real estate agent. Find out more on our page about private rentals.

Before you transfer your lease to someone else, you should check whether a lease transfer is the right option for you. If it is, you must get consent from the landlord or an order from VCAT and then transfer the bond to the new renter.

Transferring your lease may be the right option for you if:

• You have a fixed-term lease and want to leave before it ends
• 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 lease (a co-renter)

Note: If you want to leave before the end of a fixed-term lease, first see our page on ending or breaking your lease in case another option is better for you.

You must get the landlord’s written consent for a lease transfer to be legally valid. If you have co-renters, they must also agree to the transfer.

Consent from the landlord is usually given for a specific person and not as a general approval to transfer the lease to anyone. You can advertise that you are looking for a new or replacement renter to join your household, but you should make it clear that this is subject to the landlord’s consent.

Anyone who wants to join the household as a renter will generally need to provide the same information and references as if they were applying for the property directly. However, unlike a standard rental application, if the proposed new renter can afford the rent and isn’t listed on a tenant database, it will be hard for the landlord to argue that not consenting is reasonable.

If a landlord unreasonably refuses to consent to a proposed lease transfer, you can apply to VCAT for an order allowing the transfer. See the information on this page about how to apply to VCAT if consent is not given.

If you believe the landlord is being unreasonable in not consenting to a lease transfer, you can apply to VCAT for an order for the transfer to go ahead. However, you should only do this if you know that the proposed new renter is able to remain available until the hearing happens. A VCAT hearing may take 2 or more weeks to be scheduled.

If the renter has good references and can afford the rent, VCAT is more likely to allow the transfer.

If you believe that the landlord is not consenting due to discrimination – because of your or the proposed new renter’s race, religion, sexual orientation or other attribute protected by the law – you can also apply for compensation. See our page on claiming compensation.

If you receive consent or a VCAT order to transfer your lease, or part of it, the bond (or share of it) should also be transferred.

Before the transfer is officially approved by the landlord:

• You and the new renter should agree that once the transfer happens, the new renter will pay the renter who is leaving their bond (or share of it) directly
• The renter who is leaving will then complete the Residential Tenancies Bond Authority (RTBA) transfer form to change the bond share from their name to the new renter’s name
• A note or receipt should be made of any money exchanged between renters when organising the bond transfer
• No bond money is released from the RTBA during this process

Once the landlord gives written consent or VCAT grants an order allowing the transfer:

• The landlord must update the bond details through the RTBA bond transfer form within 5 days
• The RTBA will then email both the new and outgoing renters to confirm the details and get consent to update the registered bond names
• No money is released from the RTBA because the bond remains until the tenancy has ended for all renters and all renters have moved out

Note: If it is a co-renting situation and your share house is increasing or decreasing in number, it is best to arrange a transfer of money between everyone, so that everyone on the lease has an equal share of the bond. This is not required by law, but it is common practice and helps prevent disputes.

For more information, see our page on bonds.

A subletting arrangement is when you enter into an agreement to rent the property or part of the property from an existing renter whose name is on the lease, with the consent of the landlord (or VCAT). You become a ‘sub-renter’ and the renter whose name is already on the lease becomes the ‘head renter’.

In some subletting arrangements, you may rent parts of the home; in others, you may rent the entire home because the head renter does not live at the property. Whichever the case, for a sublet to be legally valid, a sub-renter usually needs ‘exclusive possession’ over part or all of the rental property. See the information on this page about how to identify exclusive possession.

When a legally valid subletting arrangement is made, this means that with the consent of the landlord or VCAT:

• The renter whose name is already on the lease becomes known as the head renter and effectively acts as your landlord, including organising repairs
• You are known as a sub-renter of the property because you are renting from the head renter, instead of directly from the landlord (the property owner)
• The head-renter’s lease with the landlord stays in place, and a sub-lease is created to put the subletting arrangement into writing
• The head renter is responsible for paying and maintaining the main lease, while the sub-renter pays rent under their own separate sub-lease. The 2 leases and rent payments are independent

As a sub-renter, you have renter protections and responsibilities under Victoria’s rental laws, in the same way as other renters. The head renter has the same rights and responsibilities as a landlord. See our page on private rentals, for a list of renter and landlord duties.

Living under a sub-lease, especially when sharing with the head renter, can be both legally and socially complex. Difficulties can arise in relation to shared services or facilities, the minimum standards for rental properties, getting repairs done or what happens if the head renter’s lease ends or they abandon the property (leave without telling the landlord).

For example, if you are the sub-renter and notice that repairs are needed at the property, you report this to the head renter, not the landlord. It is then up to the head renter to arrange with the landlord to get the repairs done. If the repairs are not done, and you want to make a claim for compensation or take further action, you will generally make the claim against the head renter, rather than the landlord.

If the relationship breaks down between you and the head renter, the head renter cannot just ‘evict’ you. They must give you a ‘notice to vacate’, but many of the reasons for giving a notice to vacate can be difficult for a head renter to prove. If you receive a notice to vacate from the head renter, you should seek advice immediately. Tenants Victoria and other organisations can help. See the information on this page about how to get help.

Note: Subletting is also more complex than seeking to transfer a lease in a co-renting situation. Tenants Victoria does not give advice to renters who wish to create a subletting arrangement and become a head renter, as this would mean providing advice to someone who is acting as a landlord. We may assist renters who are sub-renters on a case-by-case basis.

To be considered a subletting arrangement, and for you to be protected by Victoria’s rental laws as a sub-renter, you need to have ‘exclusive possession’ of some or all of the rental property.

Exclusive possession is not clearly defined, but it is often associated with having sole use and control over a particular space to the exclusion of all others, including the landlord and head renter.

Examples of exclusive possession include:

• Renting a room in a rental property that has a lockable door, and you are the person with the key
• 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

Sometimes you may also have to provide other evidence. This may include:

• The head renter gives you exclusive use of the property if they do not live there, or part of it if they share the property with you
• You have a written or oral rental agreement that says that the head renter is not able to enter your part of the property without permission or without following rental laws
• You are not named on the head renter’s lease with the landlord – you are not a co-renter
• The head renter charges you rent on a regular basis, independently of the rent they pay to the landlord

Other factors can include:

• What a reasonable person would assume you and the head renter intended the arrangement to be (not your actual intention)
• How you and the head renter have behaved since the agreement started
• The wording of any advertisement that was used to rent the space to you
• Entry arrangements: whether there is a common entrance or you have a separate entry, and whether there are any locks on the doors that only you can use
• Whether any facilities and services are shared between you and the head renter
• Whether any services, such as laundry pick-up and drop-off, require the head-renter or other people to come into your room
• How long you have lived there, or how long you propose to live there
• The nature of any preexisting relationship between the parties, such as partners, friends, family or cultural connection
• You have paid a bond (or your share of it) to the head renter, whether or not it is lodged with the RTBA
• Whether the head renter has issued a legal notice to you claiming that you have not followed Victoria’s rental laws

Even if you can show exclusive possession, to legally sublet to you the head renter needs the landlord’s consent in writing or an order from VCAT.

A head renter is required to tell you whether they have the landlord’s permission to sublet to you, or an order from VCAT allowing the subletting arrangement.

You should always be cautious about scams or unlawful subletting when looking for a place to rent. We strongly recommend that you get the contact details for the rental property owner (landlord) and confirm directly with them that they have approved the sublet. Direct contact also means the owner can inform you of any issues, for example, if the head renter has not passed your rent on to them, which can affect your tenancy.

If there is consent to the subletting arrangement, make sure there is a written sub-lease in place that clearly states what area you are renting, and which spaces or items are shared, if any. It is important that the landlord, head renter and sub-renter all have the same understanding of the arrangements.

The sub-lease should use the same standard form as any other lease and should comply with Victoria‘s rental laws. For more information, see our page on leases (rental agreements).

Your bond should also be lodged as a new bond, independent of the head-renter’s bond, with the Residential Tenancies Bond Authority (RTBA). See our page on bonds to learn more.

Other arrangements or situations may apply to you:

• If you are not found to be a sub-renter, you may instead be a licensee
• If there are 4 or more sub-leases in the one property, it may be a rooming house
• What you need to know if you do not receive permission to transfer your lease
• If you are a sub-renter and the head renter’s lease with the landlord ends there are important things to consider
• Disputes are resolved in different ways, depending on your circumstances

You are a licensee if:

• Your name is not on the lease, and
• A renter whose name is on the lease allows you to live at the property, and
• You are not a sub-renter because either you cannot show ‘exclusive possession’ over some or all of the property, even if the landlord consents to you living there, or the landlord has not consented to a subletting arrangement. See the information on this page about how to identify exclusive possession

Licensee arrangements are not covered by Victoria’s rental laws, the Residential Tenancies Act 1997. This means you will not have the rights, responsibilities and protections renters usually have under those laws.

However, you may have some protection under the Australian Consumer Law and Fair Trading Act 2012 (Vic) if the person you are paying rent money to is carrying on a business. Even if you are renting from someone who is not carrying on a business, you may still have rights under contract law, but these will vary from situation to situation. If, as a licensee, you have a dispute with a renter or the landlord, you can consider going to mediation. Mediation is a free, confidential and voluntary process, where people resolve their issues with the help of a mediator, a trained professional who doesn’t take sides. All renters in the dispute must agree to go to mediation. Call the Dispute Settlement Centre on 1300 372 888 or visit the Dispute Settlement Centre of Victoria website.

Note: Tenants Victoria does not usually provide advice to licensees. 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 the FCLC website.

For more information on licensees, see our page on private rentals.

If 4 or more people on separate sub-leases live in the same property it may be considered a rooming house. Rooming houses should be registered with the local council and run by a person licensed to do so. However, even if there is no registration or licence, you will usually be protected by rooming house rental laws until Consumer Affairs Victoria can resolve the issue. To learn more, see our page on rooming houses.

If you find yourself living in an unregistered rooming house, you have not done anything wrong. However, you should seek legal advice as soon as possible. Tenants Victoria and other organisations can help. See the information on this page about how to get help.

If the head renter’s lease is about to end or they abandon the premises (leave without telling the landlord), it is important to know what could happen. The outcome of a head renter being evicted or abandoning the premises will depend heavily on the whether the sub-lease was properly created with the consent of the landlord (who is usually the owner).

If you learn that the head renter’s lease is ending soon, and you are unsure of your legal status – whether you are a sub-renter, licensee or resident of a rooming house – seek advice immediately. Tenants Victoria and other organisations can help. See the information on this page about how to get help.

While the landlord gives consent to the sublet, they will generally not assist where there is conflict between you and the head renter. If you have a dispute with the head renter, and you cannot resolve this on your own, you can make an application to VCAT in the same way as any other dispute between renters and landlords.

For example, if the head renter has not followed a ‘duty provision’ (special sections of the Residential Tenancies Act that set out the duties a landlord must carry out), you can send a ‘breach of duty’ notice to the head renter, instead of going straight to VCAT. This notice asks them to fix the problem in their role as your landlord. If they fail to respond or fail to get the landlord to fix the problem within the required time, you can apply to VCAT. See our page on going to VCAT to learn more.

For a full list of the landlord duties that apply to the head renter in their role as your landlord, see our page on private rentals.

Tenants Victoria does not give advice to head renters, because while they are renters, in their role as a head renter they are acting as a landlord. Head renters seeking advice about sub-renters should contact Consumer Affairs Victoria. See the information on this page about how to get help.

Tenants Victoria does not give advice on disputes between co-renters, with the exception of family or personal violence.

VCAT generally cannot resolve disputes between co-renters, except in cases involving family or personal violence, or in exceptional cases such as serious wrongdoing by one co-renter, for example arson.

If a dispute has come up between you and your co-renters, first try to resolve it between yourselves with good communication. If that fails, you can try mediation through the Dispute Settlement Centre of Victoria. Mediation is a free, confidential and voluntary process where people resolve their issues with the help of a mediator, who is a trained professional who doesn’t take sides. All renters in the dispute must agree to go to mediation. Call the Dispute Settlement Centre on 1300 372 888 or visit the Dispute Settlement Centre of Victoria 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 the FCLC website.

For more information on co-renting, see our page on private rentals.

Bonds
Ending or breaking your lease
Landlord breaches and other notices
Leases (rental agreements)
Notices to vacate and eviction
Private rentals