19 September 2023

A thorough review of the Residential Tenancies Act is required to address common issues facing co-tenants in Victoria. While the Tenancy Act is regularly amended, it still fails to offer sufficient provisions for when there is a relationship breakdown within a co-tenancy. 

Co-tenant Disputes

Renting a property with housemates offers a cost-effective and social living option; however, under current legislation, it can also leave tenants vulnerable.

A breakdown of a co-tenancy relationship can create a burden that falls on other co-tenants, for example, if one or more tenants refuse to pay rent or repair damages to the property. In our experience, the lack of legal recourse can force many co-tenants to remain in unlivable conditions or face significant financial loss.

The Current Situation for Co-tenants

If there is a breakdown of relations, the most straightforward solution for renters is to negotiate a mutually agreeable solution. Renters can decide to continue the co-tenancy, have one or more tenants move out, or end the tenancy through a lease break.

Removing a housemate from the lease requires an agreement from the co-tenant and the landlord. Therefore, co-tenants can be left in a practical stand-off without an agreement and with little legal recourse.

Additionally, the Residential Tenancies Act does not address other issues that may arise in a co-tenancy. For example, there are no provisions to determine what happens if a co-tenant abandons the property or passes away, despite detailed provisions for a sole renter in those situations. 

Existing Provisions under the Act

There are two rare and limited scenarios in which the current Act may assist in the event of disputes arising from co-tenancy:

  1. Ending the Tenancy Due to Severe Hardship: In this instance, VCAT has to weigh up the hardship suffered by the landlord and any tenants who dispute the application. This threshold has proved difficult to establish, is often heavily contested, and, in practice, rarely used.
  2. Personal and Family Violence Provisions: In cases where one co-tenant has obtained a Personal Safety Intervention Order (PSIO) against another, these provisions allow the affected co-tenant to apply to VCAT to terminate or recreate a new tenancy. However, this also imposes a high barrier and risks escalating an already tense situation. In addition, it can place the PSIO respondent at immediate risk of homelessness. 
Subletting Arrangements

In contrast, tenants in a subletting arrangement can benefit from the full protections of the Residential Tenancies Act. In this situation, the head tenant/subletter arrangement is treated the same as the landlord/renter relationship. Yet, if renters did not seek the landlord’s permission for the sublet, the landlord can issue a Notice to Vacate.

Liability for Unpaid Rent and Property Damage

Co-tenants are jointly liable for unpaid rent and property damage. The only recourse for compensation remains under the family and personal violence provisions, which are not easily accessible without a personal safety intervention order.

Similarly, current tenancy laws have no mechanisms to force a housemate to pay rent. Again, limited options exist under family and personal violence order provisions, but this doesn’t apply broadly. Both of these gaps expose the outdated nature of this legislation.

Implications for Landlords

The lack of legal recourse for co-tenants also affects landlords. When a housemate stops paying rent or damages the property, it leaves their co-tenants powerless and facing the high likelihood of further damage if the housemate refuses to vacate. This can lead landlords to face far worse arrears and property damage disputes.

Legislative reform

With renters encountering escalating costs and a lack of affordable housing, co-tenancy offers a practical solution for many. However, Victoria’s Residential Tenancies Act falls short on addressing the unique challenges that co-tenants experience. It is evident that a review of this Act is necessary to ensure that renters in the state are afforded the same protections as sole renters.

This blog post is based on an interview given by Outreach Lawyer Rebecca Leighton for SBS Australia. Full article available HERE.

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