NSW Lease Agreement with Friend - What are My Property Rights?

Australia's #1 for Law
Join 150,000 Australians every month. Ask a question, respond to a question and better understand the law today!
FREE - Join Now


27 January 2016
Basic rundown:

I owner occupied a 3br house. Around August last year, a friend going through a divorce needed a place to stay. I offered a spare room for $150 per week, including amenities, common areas shared; for a few months until she got on track. Verbal agreement.

Fast forward to November, I started moving into my partner's place. My friend asked what would happen to her once I move out (friend is a licenced real estate agent and property manager). We agreed that if things were working out between myself and my partner by 15th Feb this year, we would enter into a tenancy agreement for the property for her to lease it at $360 a week (which was agreed 10% off market value as 'mates rates', plus in lieu of her being her own property manager. I thought market was $400 by my guess, she agreed this was the case).

I organised a separate agent to do an appraisal which came back later at $420-440. This lease was to be for 3 months at a time - with each of us deciding at the end of 3 months how we were to continue. I requested no Bond payment, allowed pets as she wants a dog, and included the internet (as long as the home phone is not used) - as I have a good deal with the provider. The reason the lease was not to start until February was for me to still retain access to the property as a 'rabbit hole' to move back into in case things didn't work out moving in with my partner. This is in writing.

I advised I would likely leave some items in the house for her to use - i.e. some furniture and appliances. We drew up a rough list of items that I might leave, very clearly saying this list would be changing as I worked things out.

Since I 'moved out' I have continued along the same arrangement until February when a lease agreement may begin - $150 per week, amenities included, for the room and shared use of common areas. I have still been upkeeping the lawns, and have asked permission each time I needed to enter the property as a courtesy in case I walk in on something I'd rather not see!

My friend now has boyfriend who has been living at the house. She has begun moving my effects into the garage and spare room to make way for her new furniture, etc. and requested I move many of my items out last weekend as they were bugging her. Has asked that the remaining items that I wasn't able to move over the weekend be removed ASAP. However, her and the boyfriend would prefer that myself and my partner not access the house when they are not home. This may have to do with us accidentally picking up one of her baking trays along with mine (which I returned within 24 hours with apology).

Around 6 weeks ago, they broke the bed I had provided for her to use, which they requested I replace. I did this within 24 hours of me finding out about it.

She has chosen what items out of my effects she would like to keep and which I must remove. She has also written up a list of maintenance issues (which were present when she moved in, such as the kitchen tap comes a little loose every few weeks) which are to be fixed before the lease begins in February.

Two weeks ago, I asked if I could stay at my house for a couple of days with my dogs (who were there when she moved in) as maintenance was happening at my partner's place and my dogs needed somewhere else to be. She advised this was not suitable as her boyfriend is allergic to my dogs. They might be able to stay outside but I would need to be careful with bringing hair inside. (this is the boyfriend who has not even asked if he can live there).

I had enough over the weekend. I sent an email advising that after the initial three month lease agreement was up, any and all of my personal effects were to be returned to me, and I may or may not renew the lease (and if I did it is likely I would increase the rent). I advised that until the lease agreement begins the property is still owner occupied and that she is only paying for herself to rent a room, and hence I still retain access to the property at any time - but as a courtesy I would advise when I am heading over.

I also wrote up an agreement for the 'furnishings':
"Agreement between xxx (“The Owner”)
and [M] (“The Tenant”)

This agreement covers details for the use of The Owners personal effects at [address], NSW (“The Premises”) by The Tenant for a period of three months during which time a Lease Agreement is in place (separately managed by Century 21 – The Property Shoppe Windsor).


The Owner is not charging The Tenant a price for use of items at The Premises. Use of these items is being provided under certain conditions for free as a gesture of goodwill.

This agreement is valid from now until the end of the initial three-month term of a Lease Agreement which is being drawn up separately, should it proceed. If proceeding, the expected start date of the Lease Agreement is 15/2/2016.

This agreement will not continue past the initial three-month Lease Agreement.

At the end of the initial Lease Agreement, all items remaining at The Premises belonging to The Owner are to be returned to The Owner (if The Tenant is remaining at The Premises under a renewed Lease Agreement) or are to remain at The Premises (if The Tenant is vacating The Premises) in the condition they are in now minus regular wear and tear.

pg. 2


The Owner holds no liability or responsibility for injury or damage to The Tenants personal effects caused directly or indirectly from items included in this agreement.

The Tenant holds no responsibility or liability for replacement or repair of items stolen or broken by way of regular wear and tear or that are stolen.

The Owner holds no responsibility or liability for replacement or repair of items stolen or broken by way of regular wear and tear or that are stolen. The Owner agrees to remove from The Premises any item broken by way of regular wear and tear as soon as reasonable.

The Tenant is liable for replacement or repair of any item broken by way of malicious intent or negligence.

Removal of Items

The Owner may at any time choose to remove any item belonging to The Owner from The Premises with reasonable notice to The Tenant that this item is being removed.

The Tenant may at any time deem any item belonging to The Owner unwanted or unsuitable for The Tenant and request that The Owner remove the item from The Premises with reasonable notice.

If it has reached the end of the initial Lease Agreement and The Tenant is remaining in the property under a renewed or new Lease Agreement, The Owner will remove all remaining items belonging to The Owner over a reasonable timeframe.

The Tenant is to provide access to The Premises to The Owner for removal of items per the above; after reasonable notice has been provided.

Items Included Under This Agreement

The Tenant has provided The Owner with an Inventory of items at The Premises as of 22/1/2015 and a note stating if each item should stay or be removed from The Premises. This is taken as a guide only.

This list may be updated by The Tenant and emailed to The Owner for checking at the time that the Lease Agreement begins and as items are removed from the Premises by The Owner per the prior section “Removal of Items”.

By signing this agreement, I understand and agree to the above conditions

(“The Owner”)

(“The Tenant”)

I also stated in the email:

"If any of the above is deemed unsatisfactory to [M] and [A], and they no longer wish to enter a rental agreement under these conditions then I will request that the current verbal arrangement of [M] renting a room for $150 per week ceases on March 6, 2016 (6 weeks from now) and [M] and [A] vacate the property by this date, returning keys and leaving any of my items at the property in the condition they are in now."

My question is, what property rights do I actually have here? Can I in fact ask her to move in 6 weeks if she doesn't find my terms suitable? Or am I stuck with her and boyfriend living there however long they like for $150 a week, with me paying amenities and replacing everything they break and not being able to access the house?

Have I shot myself in the foot by 'moving out' and essentially allowing her the use of the whole house for the last couple of months (i.e. me being nice)? Can I terminate the whole agreement after the 3 month tenancy agreement is up?


Hi Louise123,

It sounds a though what is in place is a 3 month initial lease. And from what I have read, hopefully correctly, it sounds like you have given yourself an option to move back in after that time, is that correct? You only need to provide 30 days notice to terminate a lease if it is a fixed term lease that it due to expire. If the fixed term has expired and you are just on a month to month tenancy, then the notice period is 90 days.

I think you would be safe issuing an eviction notice 30 days before the end of the 3 month initial lease term.