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Disclaimer: Educational purposes only. Not legal advice. Consult a qualified NZ legal practitioner for your specific circumstances.

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tenancy

Who is responsible for rent if a flatmate stops paying?

Key Takeaway

In New Zealand, if multiple flatmates are co-tenants on a single tenancy agreement, they are jointly and severally liable for the entire rent, meaning each is responsible for the full amount if another defaults. If a flatmate is not on the agreement, the named tenant is solely responsible to the landlord, and the flatmate's obligation is to the named tenant.

Understanding Rent Responsibility When a Flatmate Stops Paying

When a flatmate in New Zealand stops paying their share of the rent, the legal responsibility for covering the outstanding amount depends significantly on the nature of their tenancy agreement. New Zealand's residential tenancy law, primarily governed by the Residential Tenancies Act 1986 (RTA), distinguishes between individuals named as tenants on a tenancy agreement and those who are not.

Co-Tenants and Joint and Several Liability

When multiple individuals sign a single tenancy agreement as tenants, they are generally considered 'co-tenants'. In New Zealand, co-tenants are typically subject to the principle of joint and several liability. This legal principle means that each co-tenant is individually responsible for the entire amount of rent and other tenancy obligations, not just their proportional share [Source: This principle is commonly applied by the Tenancy Tribunal in cases concerning obligations under the Residential Tenancies Act 1986].

What Joint and Several Liability Means for Unpaid Rent

If one co-tenant fails to pay their share of the rent, the landlord has the right to pursue the full amount of the outstanding rent from any or all of the remaining co-tenants [Source: Residential Tenancies Act 1986, s 39(1)(a)]. For example, if four co-tenants share a property and one stops paying, the landlord can demand the full rent from the remaining three, or even just one of them. The remaining co-tenants are legally obliged to cover the shortfall to ensure the rent is paid in full and on time [Source: Residential Tenancies Act 1986, s 39(1)(a)].

Consequences for Remaining Co-Tenants

If the full rent is not paid by the due date, regardless of which co-tenant defaulted, the landlord can take action against all named tenants on the agreement. This can include applying to the Tenancy Tribunal for an order for rent arrears [Source: Residential Tenancies Act 1986, s 60(1)] or, after providing proper notice, issuing a notice to terminate the tenancy [Source: Residential Tenancies Act 1986, s 66(1) and s 66A]. Any such order or termination would affect all co-tenants listed on the agreement.

If the remaining co-tenants cover the defaulting flatmate's share, they may then have a claim against the defaulting flatmate for that amount. This is a separate dispute between the co-tenants and would typically be resolved through the Disputes Tribunal, not the Tenancy Tribunal, as it does not involve the landlord [Source: The Disputes Tribunal Act 1988 governs claims between individuals for amounts up to $30,000].

Flatmates Not Named on the Tenancy Agreement

If a flatmate is not named as a tenant on the official tenancy agreement with the landlord, they generally do not have a direct legal relationship with the landlord under the Residential Tenancies Act 1986 [Source: The Residential Tenancies Act 1986 defines 'tenant' in s 2 and primarily governs agreements between named landlords and named tenants].

Head Tenant's Responsibility

In this situation, the named tenant (often called the 'head tenant') is solely responsible to the landlord for paying the entire rent when it is due [Source: Residential Tenancies Act 1986, s 39(1)(a)]. The agreement between the head tenant and the flatmate is a private arrangement, often a licence to occupy or a sub-tenancy, and is generally not directly governed by the Residential Tenancies Act 1986 in disputes between the head tenant and the flatmate [Source: The Tenancy Tribunal's jurisdiction under s 77 of the Residential Tenancies Act 1986 primarily covers disputes between landlords and tenants defined under the Act].

Flatmate's Responsibility to the Head Tenant

If a flatmate not on the tenancy agreement stops paying their share, the head tenant remains responsible for paying the full rent to the landlord. The head tenant would then need to pursue the unpaid amount from the flatmate through a separate legal process, most commonly via the Disputes Tribunal [Source: The Disputes Tribunal Act 1988 covers claims for recovery of money between individuals]. It is advisable for head tenants to have a written agreement with their flatmates outlining their responsibilities for rent and other expenses.

Bond Implications

When a co-tenant leaves, the original bond paid to Tenancy Services typically remains for the duration of the tenancy. If a departing co-tenant wishes to get their share of the bond back, an agreement needs to be reached with the remaining tenants and the landlord. A 'Change of Tenant' form (Form 6) can be used to update the bond record with Tenancy Services [Source: Residential Tenancies Act 1986, s 18]. Without this, the departing tenant's share of the bond remains held for the property, and they may need to seek reimbursement from the remaining tenants if they receive a new bond payment from an incoming tenant.

When to Seek Independent Legal Advice

Understanding the legal obligations and options when a flatmate stops paying rent can be complex. Individuals experiencing these issues are encouraged to seek independent legal advice from a qualified legal professional, Tenancy Services, or Community Law Centres. These organisations can provide information specific to the circumstances under New Zealand tenancy law.

Key Resources