Subletting or flatmate situation?

Question from Andrew updated on 16th February 2016:

We have a tenant who has not lived at the property for some months, but still has most of his personal belongings stored at the property. He has a flatmate that lives at the house full time and pays the total rent to our tenant who in turn pays us. The flatmate has no written agreement with our tenant.

The flatmate has made contact with us, asking if she can pay rent to us directly, and asking what we can do to remedy the situation from her perspective - i.e. the tenant is not living there, but still has all their belongings at the property, and is paying nothing toward the weekly rent.

* Is this a subletting situation, or does the fact the tenants belongings are still at the property and he has not "officially" moved out, mean he could still be considered as living there?

* If subletting, would we still require to give 90 days notice (after 14 days notice to remedy)?

* Morally, the flatmate has got herself into a bad situation, is there anything we can do to help her cause?

Our expert Allan Galloway responded:

Under the Residential Tenancies Act, there is a difference between a tenant subletting and a tenant having flatmates. Subletting is where tenants who rent a property move out, and enter into a subsequent tenancy agreement with other people to rent the property. In effect, they become sub-landlords and their tenants are sub-tenants. Similarly under the Act, a tenant cannot sublet the premises without the agreement of the landlord, and this should be documented in writing in the tenancy agreement.

Tenants who have not moved out of the property and have people living with them who are not listed on the Tenancy Agreement would normally be considered a flatting arrangement, and not a subletting arrangement. Where a tenant is in breach of their responsibilities under the tenancy agreement by subletting the premises without consent, a landlord can serve the tenant with 14 days’ written notice requiring the tenant to remedy the breach. If the tenant does not comply with the notice the landlord can apply to the Tenancy Tribunal to terminate the tenancy (which may include any sub-tenancies).

A template for 14 days’ notice and information about service times can be found on the Ministry’s website at www.tenancy.govt.nz. If the tenancy agreement is a periodic agreement (an agreement with an agreed start date, but no end date), a landlord can give 90 days’ notice to terminate the agreement. Where the landlord has consented to subletting, a landlord can also give a copy of that notice to the sub-tenant. This notice would also terminate any sub-tenancy covered by the Act. Where 90 days’ notice is given to terminate an agreement, no reason needs to be included in the notice, and a 14 day letter to remedy does not need to have been served.

The Act states that subletting without the landlord’s permission is deemed an unlawful act and any application to the Tenancy Tribunal could include a claim for “exemplary damages” of up to $1000.00. We are unable to advise on how you might assist the ‘flatmate’ (the possible sub-tenant), as under the Act, you have no direct contractual relationship with this person. You may wish to try and resolve the issues you have raised directly with your tenant.

To discuss your situation further you can call 0800 TENANCY (0800 836 262) to speak with a member of our Tenancy Advice team. You can also visit our website at www.tenancy.govt.nz/tenancy-index.

The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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