Renting

Co-tenancy vs sub-tenancy: the pros and cons

When applying for rental properties you have two options for your lease agreement: co-tenancy vs sub-tenancy. Will you share the tenancy, with all of your names on the one lease? Or rather will you be the sole lease holder? In this case you would sublease one or more rooms to tenant/s who won’t be on the lease agreement.

The choice depends on your personal situation. To what extent do you wish to manage the finances and other concerns relating to your tenancy? If you do decide to sub-lease the property as head tenant then you must have written permission from the landlord. If you do not, the landlord has the right to issue you with 14-days notice to vacate. However, if you do seek approval to sub-lease the property, the landlord must present a valid reason if they do not approve. If you believe it is not a valid enough reason for refusal, you have the right to take the matter up with the Victorian Civil and Administrative Tribunal (VCAT).

Co-tenancy

Pro Con
You share the responsibility of the management of your home with one or more people. You need to be sure that the person in charge of paying fees and rent can be trusted to do so on time.
There is more chance of securing a property’s lease if you can provide enough co-tenants to satisfy the rent. If things go south, it is harder to force someone to leave, and you may have to leave yourself.
It is relatively painless to transfer the tenancy from one person to the next. All individuals on a lease must agree on a potential replacement of tenant. This can prolong the process of finding a new tenant if individuals disagree with one another.

Sub-tenancy

Pro Con
As the tenant on the lease, you have the power to choose those you live with and ask tenants to leave if they do not satisfy your requirements or fall short of rent. A landlord may be less likely to choose an applicant who wants to sublease the property, as they then have less power to decide who takes care of their investment.
It can be a temporary solution before you have a significant other move in with you. As the head tenant you take on the legal responsibilities of the landlord and as such will have to personally deal with any disputes between them and the sub-tenant at VCAT.
You have the option to split the rent however you like, as long as the sub-tenant agrees to it. You have the responsibility to vet potential tenants and as such deal with the consequences of a poor assessment.
You may be left in the dust if a sub-tenant leaves without paying. You do have legal options in this case but the work sits with you.