Senin, 14 Februari 2011

When co-tenancies end

Last time we talked about the law as it relates to comings and goings in share housing; this time, it's just plain goings. In particular, if you're a co-tenant – that is, you and one or more other persons are both tenants under the same agreement – and you want to sever ties with your housemate/s, the new Residential Tenancies Act 2010 makes some important changes that are worth knowing about.

To help illustrate the changes, let's refer to a co-tenancy with two co-tenants, Will and Cate.

(Will Wales and Cate Middleton – a share house romance.)

Without putting the mozz on real-life Will and Cate, let's pretend Cate wants out. She might physically move out but, until the commencement of the new Act, ending her legal liability was not so easy. In fact, under the old 1987 Act, there was no straightforward way for a co-tenant to unilaterally terminate his or her liability while another co-tenant stayed put. True, under the old law Cate could transfer (assign) her co-tenancy to her erstwhile housemate, or to some new person moving in, and get them to indemnify her in the event of loss, but all these things would require the consent of all the parties and hence a degree of co-operation that is all too often absent when co-tenants split up. Cate could even go as far as giving a notice of termination to the landlord, but if Will dug his heels in and didn't move out, there would be no vacant possession given to the landlord and the tenancy – and Cate's liability – would continue.

That was the old Act; the new Act, fortunately, includes s 101, which allows Cate to give 21 days' notice to both the landlord and Will, and then move out, with her tenancy terminating on the date on the notice, while Will's continues. Note that this does not apply during the fixed term of an agreement – Cate and Will are legally stuck with one another for the fixed term – but after that, if Cate's partnership with Will ends, so too can her liability as a co-tenant. She can also require Will to pay her, within 14 days, her share of the bond (s 174).

Here's a twist: what if Cate wants to end the co-tenancy, but also wants to stay put – that is, she want Will to be put out? The new Act provides for that too. Under s 102, a co-tenant may apply to the Tribunal for an order 'terminating the tenancy of the co-tenant or another co-tenant under the residential tenancy agreement' (my emphasis).

Does this mean that disputes between housemates about whose turn it is to wash up might now be prosecuted as termination proceedings in the Tribunal? We think not: s 102(2) qualifies the Tribunal's power by providing that it 'may make an order under this section if it is of the opinion that it is appropriate to do so in the special circumstances of the case' (my emphasis). So, something special is required before the Tribunal will make such an order. The TU has already heard of a likely case in what we believe is probably the first use of s 102: it's being brought by a woman whose ex-husband agreed to be a co-tenant to help her get the tenancy, but now he wants to move in to the premises with her. With respect to the Tribunal, there's a good argument that these amount to 'special circumstances'. Still, it will be interesting to see where the Tribunal draws the line.

Here's hoping no 'special circumstances' disturb the happy union, forged in share housing, of real-life Will and Cate. Cheers, kids!