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tenancy

Flatmate agreements vs. Tenancy agreements

Key Takeaway

In New Zealand, tenancy agreements are governed by the Residential Tenancies Act 1986, granting tenants specific legal rights and obligations with the landlord. Flatmate agreements, however, are not covered by this Act; they are contractual arrangements between existing tenants and their flatmates, relying on general contract law for their terms and dispute resolution.

Flatmate Agreements vs. Tenancy Agreements in New Zealand

When people share a rented home in New Zealand, the legal relationship between the residents and the property owner can take different forms. The two primary arrangements are a tenancy agreement and a flatmate agreement. Understanding the distinction is crucial, as it determines the legal rights and obligations of all parties involved and which laws apply to the arrangement.

What is a Tenancy Agreement?

A tenancy agreement is a legally binding contract between a landlord and one or more tenants, granting the tenant(s) the right to occupy residential premises (any premises intended to be occupied as a place of residence [Source: Residential Tenancies Act 1986, s 2]) in exchange for rent. This agreement is fully governed by the Residential Tenancies Act 1986 (RTA), which sets out the comprehensive rights and responsibilities of both landlords and tenants [Source: Residential Tenancies Act 1986, s 5(1)].

Key characteristics of a tenancy agreement under the RTA include:

  • Exclusive Possession: Tenants typically have the right to exclusive possession of the entire premises, meaning they have the sole right to occupy the property, subject to the landlord's limited rights of entry [Source: Property Law Act 2007, s 207 (definition of 'lease' provides context for exclusive possession)].
  • Parties: The parties to a tenancy agreement are the landlord (the person who grants the tenancy) and the tenant(s) (the person(s) who hold the tenancy).
  • Bond: If a bond (a security deposit) is paid, the landlord must lodge it with Tenancy Services within 23 working days of receiving it [Source: Residential Tenancies Act 1986, s 18].
  • Dispute Resolution: Disputes between landlords and tenants are primarily resolved through the Tenancy Tribunal, a specialist judicial body established under the RTA [Source: Residential Tenancies Act 1986, Part 5].
  • Statutory Protections: The RTA provides strong statutory protections for tenants, including rules about rent increases, maintenance responsibilities, notice periods for ending a tenancy, and compliance with Healthy Homes Standards [Source: Residential Tenancies Act 1986, various sections].

What is a Flatmate Agreement?

A flatmate agreement is an arrangement where a person (the flatmate) lives in residential premises with an existing tenant or tenants, but does not have a direct tenancy agreement with the landlord. The RTA specifically states that it does not apply to an agreement under which a tenant lets premises or any part of the premises to another person who lives on the premises as a flatmate [Source: Residential Tenancies Act 1986, s 5(2)(l)].

Instead, flatmate agreements are governed by general contract law (the body of law that governs agreements) and common law (law derived from judicial decisions rather than statutes). The flatmate is typically considered a licensee, meaning they have permission to occupy the property but do not have the same legal rights as a tenant under the RTA.

Key characteristics of a flatmate agreement:

  • No Exclusive Possession (of entire premises): A flatmate usually has exclusive possession of their bedroom but shares common areas (e.g., kitchen, living room) with the principal tenant(s).
  • Parties: The parties are the existing tenant(s) (often referred to as the principal tenant(s)) and the flatmate. The landlord is not typically a party to this agreement.
  • Bond/Deposit: Any money paid by a flatmate as a security deposit is not a bond under the RTA and therefore cannot be lodged with Tenancy Services.
  • Dispute Resolution: Disputes between a principal tenant and a flatmate are typically resolved through the Disputes Tribunal (for claims up to a certain monetary limit) or the District Court, not the Tenancy Tribunal [Source: Disputes Tribunal Act 1988, s 10; District Courts Act 2016, s 10].
  • Contractual Protections: The flatmate's rights and obligations are primarily defined by the specific terms of their agreement with the principal tenant(s). Without a written agreement, rights and obligations may be less clear and rely on implied terms under common law.

Key Differences: Tenancy Agreement vs. Flatmate Agreement

Feature Tenancy Agreement Flatmate Agreement
Governing Law Residential Tenancies Act 1986 General Contract Law and Common Law
Parties Landlord and Tenant(s) Principal Tenant(s) and Flatmate
Relationship Landlord-Tenant Tenant-Licensee
Exclusive Possession Tenant usually has exclusive possession of the entire premises. Flatmate usually has exclusive possession of their room, shared use of common areas.
Bond Lodgement Must be lodged with Tenancy Services [Source: Residential Tenancies Act 1986, s 18]. Cannot be lodged with Tenancy Services.
Dispute Resolution Tenancy Tribunal [Source: Residential Tenancies Act 1986, Part 5]. Disputes Tribunal or District Court [Source: Disputes Tribunal Act 1988, s 10; District Courts Act 2016, s 10].
Notice Periods Statutory notice periods apply [Source: Residential Tenancies Act 1986, s 50-51]. Determined by agreement, or 'reasonable notice' under common law if no agreement.
Legal Protections Strong statutory protections under RTA. Weaker, contract-based protections, less formal framework.

Important Considerations for Flatmates

It is generally advisable for principal tenants to obtain the landlord's consent before taking on a flatmate, as some tenancy agreements may require this [Source: Residential Tenancies Act 1986, s 42(2) (refers to assignment or subletting, but landlord consent is a common lease condition for occupants)]. The principal tenant(s) remain ultimately responsible to the landlord for rent payments and any damages to the property, even if a flatmate fails to meet their obligations [Source: Residential Tenancies Act 1986, s 39 (joint and several liability if co-tenants)]. A clear, written flatmate agreement can help define expectations and responsibilities between the principal tenant(s) and the flatmate, reducing potential disputes.

When to Seek Independent Legal Advice

Individuals seeking to understand their specific rights and obligations regarding residential tenancies or flatmate arrangements should consult with Tenancy Services, Community Law Centres, or a qualified legal professional. These bodies can provide specific guidance based on individual circumstances. Further assistance is available from Community Law Centres.

Key Resources