Introduction to Tenancy Agreements with Multiple Tenants
A tenancy agreement is a legally binding contract between a landlord (the owner of a residential property who grants a tenancy) and a tenant (a person who occupies residential premises under a tenancy agreement) that sets out the terms and conditions of a tenancy [Source: Residential Tenancies Act 1986, s 13; s 2]. In many flatting situations, multiple individuals are named as tenants on the same tenancy agreement. When one of these flatmates leaves, it has specific implications for rent payments and other tenancy obligations.
Joint and Several Liability for Rent
A key legal principle applicable to co-tenants on a tenancy agreement is joint and several liability. This means that each tenant is individually responsible for the entire rent amount and other tenancy obligations, not just their 'share,' as well as being collectively responsible with all other named tenants [Source: Legal principle applied in New Zealand tenancy law].
This principle has significant consequences when a flatmate leaves. Unless the tenancy agreement is formally varied or ended, the remaining tenants typically remain responsible for ensuring the full rent is paid [Source: Residential Tenancies Act 1986, s 39 (obligation to pay rent); s 44 (tenant’s responsibilities)]. The landlord's right to receive the full rent is from all named tenants, collectively and individually, regardless of any private arrangements between the flatmates regarding their respective shares.
Formal Changes to the Tenancy Agreement
For a flatmate to be legally removed from their rent and other tenancy obligations, the tenancy agreement needs to be formally varied or ended. Simply moving out does not remove a tenant's legal responsibility.
For Fixed-Term Tenancies
A fixed-term tenancy is a tenancy agreement for a specific period of time [Source: Residential Tenancies Act 1986, s 16]. It can generally only be ended early by mutual agreement of all parties (landlord and all tenants) or by an order from the Tenancy Tribunal [Source: Residential Tenancies Act 1986, s 66(1)(a) (variation by agreement); s 60A and s 60B (applications to Tenancy Tribunal to end a fixed-term tenancy)]. If one tenant wishes to leave, all remaining tenants and the landlord must agree to either:
- End the entire fixed-term tenancy.
- Vary the existing tenancy agreement to remove the departing tenant and, potentially, add a new one [Source: Residential Tenancies Act 1986, s 66(1)(a)].
For Periodic Tenancies
A periodic tenancy is a tenancy agreement that continues until either the landlord or tenant gives notice to end it [Source: Residential Tenancies Act 1986, s 17]. If a flatmate on a periodic tenancy wishes to leave, they may give notice to terminate the tenancy [Source: Residential Tenancies Act 1986, s 50A]. However, if multiple tenants are on the agreement, a notice from one tenant often has the effect of ending the entire tenancy for all tenants unless the landlord agrees to continue the tenancy with the remaining tenants under a new or varied agreement [Source: Residential Tenancies Act 1986, s 50A(4) (if 1 of 2 or more tenants gives notice to terminate, the Tribunal may make an order for possession or other appropriate order); s 66 (variation of agreement)].
Adding a New Flatmate
If a new flatmate is to move in to replace a departing one, the landlord's consent is typically required. The new person must then be formally added to the tenancy agreement through a written amendment or by entering into a new agreement with the landlord and existing tenants [Source: Residential Tenancies Act 1986, s 24 (assignment and subletting requiring consent)]. This ensures the new flatmate is legally recognised as a tenant and is also subject to the obligations of the agreement.
Bond Implications
The bond paid for a tenancy is held for the tenancy as a whole, not for individual tenants [Source: Residential Tenancies Act 1986, s 60 (payment of bond)]. If a flatmate leaves while the tenancy continues for others, the bond is generally not released by Tenancy Services. Instead, the departing flatmate typically arranges privately with the remaining tenants (or any new flatmate) for their share of the bond to be paid out, and for the new flatmate to contribute their share to the bond held by the remaining tenants.
It is important for all parties to formally notify Tenancy Services of any changes to the tenants named on the bond record [Source: Residential Tenancies Act 1986, s 22A (information to be supplied by landlord for bond lodgement)]. This ensures the bond record accurately reflects who is legally entitled to the bond when the tenancy eventually ends.
Distinction: Co-Tenants vs. Subtenants/Licensees
This information primarily applies to co-tenants, meaning individuals who are all named as tenants on the main tenancy agreement with the landlord. If a flatmate is a subtenant (renting from a primary tenant) or a licensee (having permission to live there without a formal tenancy agreement), their legal arrangement is with the primary tenant, not directly with the landlord [Source: Residential Tenancies Act 1986, s 24 (distinguishes sub-tenants)]. In such cases, the primary tenant remains solely liable to the landlord for the full rent and other tenancy obligations, regardless of whether their subtenant or licensee leaves or pays their share.
When to Seek Independent Legal Advice
Navigating changes in tenancy agreements can be complex. Tenants and landlords are encouraged to seek independent legal advice if they are unsure about their rights, obligations, or the process for formally varying or ending a tenancy agreement when flatmates leave. Advice can be obtained from qualified legal professionals or from a Community Law Centre for free legal assistance.