Managing a shared tenancy - Real estate industry bulletin 269
6 September 2023
Managing a shared tenancy
Shared tenancies occur when part or all of a property is rented by two or more independent tenants. It is important to maintain proper administration of shared tenancies, as they can be more complex. Shared tenancies are becoming more common with Western Australia’s changing property market.
This bulletin summarises what considerations to make when managing a property with shared tenancy.
Variations of shared tenancies
The type of the shared tenancy in place determines how you will need to manage it.
As a general rule, in a sub-letting arrangement, the letting tenant, or ‘head tenant’, takes on the responsibilities of the landlord with respect to the sub-tenant.
Lodging the correct bond
The requirements relating to bonds are different for each shared tenancy arrangement. For a co-tenancy, you should lodge one bond listing the names of the co-tenants on the tenancy agreement. For rooming arrangements, you should lodge individual bonds for each of the tenancy agreements, identifying which part of the property is being rented (Room A, B, or C etc.).
Rent and bills
It is important that tenants in rooming arrangements receive separate invoices and receipts reflecting their individual share of rent and bills. Co-tenants can be given joint invoices and receipts, as they are jointly responsible for the payments. Responsibility for how they collect that payment is by private agreement between the co-tenants.
Repairs and maintenance
Liability for repairs and maintenance can be difficult to determine in shared tenancies. Regular property inspections can assist.
If the tenants are in rooming arrangements and there is damage to a common area caused by negligence, only the tenant responsible for the damage is liable for the cost of necessary repairs. If this is uncertain, the onus is on the property manager to determine which tenant is responsible. It may assist to consult with each tenant. Liability for repairs and maintenance in private rooms/areas, however, resides with the tenant renting that area.
In a co-tenancy, all co-tenants are jointly liable for any damage.
Changes in tenancy during the term of a lease
Given the nature of shared tenancies, tenants may wish to move during the term of the tenancy agreement. They must obtain the lessor’s permission to do this except in certain circumstances.
If a tenant takes over a lease from another tenant, you must issue:
- an outgoing property condition report (PCR) for the departing tenant within 14 days of the end of the tenancy; and
- an ingoing PCR for the new tenant within seven days of their occupancy the property.
The property will likely not be vacant when you conduct an inspection, so determining any changes in condition is best achieved by working cooperatively with the vacating and remaining tenants.
Any costs for cleaning, repairs and maintenance found to be the responsibility of the vacating tenant may need to be recovered from their bond contribution.
You will need to lodge a Variation of Security Bond form to update the tenant details, and vary the tenant names on the tenancy agreement so it reflects the change.
Bond monies can be settled privately between tenants when necessary.
Problems in shared tenancies
While co-tenancies provide less administrative burden for property managers, they also restrict your ability to address a breach of the tenancy agreement caused by the behaviour of one co-tenant because of the joint liability of all co-tenants. Rooming arrangements provide a sound alternative to co-tenancies for this reason.
If you have a question, call our Contact Centre on 1300 30 40 54 or email email@example.com.
Share this page: