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Sub-letting a rented home

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Welcome to our new look format for The Letterbox! This edition focuses on sub-letting and the relationship between the landlord, head-tenant and sub-tenant.

As the head-tenant becomes a landlord to the sub-tenant, it's important a head-tenant is informed about their responsibilities to both their landlord or agent and sub-tenant.

Read on below for answers to your questions on seeking permission to sub-let, taking a bond from a sub-tenant and sorting out utility bills.

Answers to your questions on sub-letting

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Q: I have rented out part of the house I'm renting to another person and have taken a bond from them. Am I required to lodge the bond with Fair Trading?

A: This depends on the type of arrangement you entered into. If you sign a tenancy agreement with another person to sub-let part of the house, you take on the role of the landlord to the sub-tenant. As a landlord to the sub-tenant, you are bound by the Residential Tenancies Act 2010 which includes the requirement to lodge the bond with NSW Fair Trading.

If no tenancy agreement was signed between you and the person renting part of the house, then the tenancy laws may not apply. This means that the person you are renting to may be considered a lodger and the rules about taking and lodging bonds would not apply.

You can contact Fair Trading for further clarification on what deems a person a sub-tenant or lodger.
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Q: The tenant in my investment property has told me they want to rent out a room to another person to help with the rent payments. Can they go ahead and do this, or do they need to ask my permission to sub-let?  

A: This depends on how they want to go about it. To formally sub-let, they will need to enter into a standard written tenancy agreement with the person who rents the room. If your tenant wants to do this, they must first seek your written consent before they sub-let the room. You cannot unreasonably decline the tenant’s request, however you can ask for information about the sub-tenant, such as their name and rental history.

If the tenant wishes to rent the room out informally (i.e. without signing a tenancy agreement), they do not need to let you know or ask your permission, unless it will exceed the number of occupants specified on the agreement.

If a formal sub-letting agreement goes ahead, your tenant will become the head-tenant and will be responsible for the actions of the sub-tenant. You can read more about sub-letting requests on our website.
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Q: I am a sub-tenant and my landlord (the head-tenant) has asked me to pay half of the electricity bill, however I don’t believe I owe half. Can my landlord ask me to pay half of the electricity bill?

A: No. Where a head-tenant sub-leases, they cannot split utility bills proportionately. Your landlord (the head-tenant) must be able to tell you how much electricity you used to be able to recover the cost from you directly.

They can, however, set rent to cover utility costs such as electricity without explaining what portion of rent this covers.
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Q: I am a sub-tenant and am vacating the home I rent. The head-tenant has advised me that upon vacating, they will claim money from my bond for carpet cleaning due to a stain from something I spilled. Can they do this?

A: Yes. If you were given a property condition report when you entered into the tenancy and have damaged the property in any way that isn't from fair wear and tear, you are responsible for the damages.

Ensure the head-tenant has supplied you with a quote or invoice for the carpet cleaning. If you are disputing the charges, you can lodge a complaint with Fair Trading's free tenancy complaint service.
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If you can't find an answer to your question, you're welcome to call us on 13 32 20.

If you have a problem with a tenant, landlord or agent that you can't resolve, remember you can lodge a complaint online to use our free tenancy complaint service.

Tenancy Tales from the tenancy complaint service

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A sub-tenant lodged a complaint with Fair Trading about an ongoing infestation of cockroaches in their home. The sub-tenant received a termination notice so that the property could undergo renovations to fix the issue, and they requested compensation for moving costs.

Upon Fair Trading intervening in the matter, it was discovered the sub-tenant's bond had not been lodged with Fair Trading.

Fair Trading contacted the head-tenant to notify them of their obligations under the Residential Tenancies Act 2010, including the requirement to lodge the bond with Fair Trading, as they were the sub-tenant’s landlord. The Fair Trading officer negotiated with the landlord (the head-tenant) who agreed to a full refund of the bond and reimbursed the sub-tenant $100 in moving costs.


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Draft Strata Bills now released

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If you own, live or work in a strata-titled apartment or lot, check out the draft Strata Bills. You can have your say until 12 August 2015.

Plus, access our fact sheets spelling out the major changes designed to improve daily life in strata communities. Read up on the changes at our Reform of strata laws page.

Upcoming events

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NSW Fair Trading offers free community education seminars across NSW. Stay informed with Fair Trading's events and seminars on tenancy topics for Real Estate Agents, Self-managing Landlords and Strata.

Events are coming up for Self-managing Landlords in Taree (22 July) and Wellington (28 July). 

Book now