In a Continuing Professional Development course, I was made aware of a situation that had confronted an agent. It is probably illustrative of the time but raised different questions than we had considered previously.

The facts of the matter are:

  • The landlord had managed the property personally;
  • The landlord had entered into a contract with the tenant under a Standard Residential Tenancies Agreement, which identified that four persons could live in the premises;
  • The tenant has lived in the property since 2015 and was on a Periodic Continuing Tenancy Agreement;
  • The tenant, at some time, put another person in the second room as a subtenant;
  • The tenant gave notice and moved out of the premises;
  • The subtenant did not leave;
  • The tenant and the subtenant went before the tribunal and agreed that a tenancy arrangement was in place between them;
  • The subtenant has now indicated to the agent that they have a 12-month lease from the tenant;
  • The subtenant is refusing to provide access to the agent because he has no agreement with the landlord;
  • The landlord has lost all their paperwork and no paperwork exists; and
  • The subtenant has advised the agent that if they attend, he will barricade them from the premises.

What a shemozzle! It does however provide a number of interesting issues.

  1. People do not take seriously enough the concept of how many people are going to live in a premises. It appears that a habit exists in many agencies where it is accepted that two persons per room is appropriate. Therefore, they place four people on a Residential Tenancies Agreement. This demonstrates a problem in itself, because the tenant was able to place a subtenant in the premises, without being in breach of the lease. If a person has applied for themselves, the maximum should only be one person. If they then wish to extend it to other people, the agent has to be informed that they wish to place a subtenant in place. This is a greater protection to the landlord.
  2. Apropos to the issue above, your routine inspections should always look to see how many people are in the premises. It is a bit like looking for a pet, if there are more people on the premises than what the lease provides, they are technically in breach. Taking steps to ascertain what really happened, and to place the tenancy on a proper legal fitting, is therefore important.
  3. The tenant purportedly gave a subtenant lease to the subtenant. This is impossible. A tenant cannot provide any greater term on a lease than they are entitled to have. If it was on a Continuing Agency Agreement, the best term the tenant could give is 90 days. This is arguable in that a tenant can walk away with three weeks’ notice. A subtenancy is only as strong as the tenancy and therefore the twelve months will be a clause which is rendered void.

This is the second problem we have spoken about in two years regarding subtenants. The only control an agent or a landlord has is when granting the tenancy at first instance. Don’t allow any more persons to be on the lease than the tenant has told you is going to live there. If more move in, they are in breach and the landlord and the agent have greater control.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au