Room renter recovers $650 of her $1,120 deposit after leaving a share house in three days (ACAT, 2026)

What happened

The renter first contacted the owners in January 2026 about a bedroom advertised on an app. She was overseas at the time, so she inspected the room by video call. She was sent a copy of the agreement, which described itself as a residential occupancy agreement for one bedroom with shared kitchen, bathroom, living areas and laundry in a share house. She was told she could sign when she arrived, and she paid a security deposit of $1,120 to hold the room. The agreement was to run from 6 February 2026 to 25 June 2026, the end of her first semester at the Australian National University.

She arrived at the house on 6 February 2026. She said that when she moved in one of the owners told her they intended to sell the property and that she would need to leave the house during inspections. The next day she messaged the other owner to say she no longer wanted to stay. She asked to remain a few more days because she was unwell. Messages went back and forth, and she moved out on 9 February 2026, staying with a friend for $185 until university accommodation became available on 13 February.

At the hearing she said she left because a window was broken and could not be closed or secured, because there were large cracks in the walls that had not been visible on the video inspection, and because she had not been told the owners planned to sell. The tribunal did not accept the window was broken. It found she probably could not work out how to close that type of window, and that she had not given the owners a chance to show her or to repair it. A fence about a metre from the window, with locked gates, meant the room was not left unsecured. The cracks were visible on the owners' own video of the inspection, and the tribunal was not satisfied they were unsafe or affected her use of the room. It also noted she did not raise the window or the cracks until after she had already said she was leaving.

On the sale, the tribunal accepted the owners had probably formed the view they might sell by the time of the video inspection on 24 January, and that one of them mentioned the possibility when she moved in. It did not accept they had firmly decided to sell or knew when inspections would happen. A building inspection was done on 26 February and a selling agency agreement was signed on 10 March 2026.

What each side wanted

The renter asked the tribunal to declare that the arrangement was a residential tenancy agreement rather than an occupancy agreement, and to declare the agreement void from the start because of the state of the room, what she said was a misrepresentation by the owners' silence about the sale, and because terms of the agreement conflicted with the Residential Tenancies Act 1997. She offered to pay three days' rent, wanted the rest of the $1,120 deposit back, and claimed the $185 she spent on short-term accommodation plus the tribunal filing fee. The owners said the agreement was a valid occupancy agreement, that there was nothing wrong with the window or the cracks, and that they had not decided to sell when she inspected. They said the agreement entitled them to rent from the start date until the room was re-let on 6 March 2026, but they were only claiming three weeks' rent.

What the tribunal decided

The tribunal declared that the agreement between the parties was an occupancy agreement for the purposes of section 71C of the Residential Tenancies Act 1997, not a residential tenancy agreement.

It ordered the respondent to pay the applicant $650. That figure was made up of $1,120 as the return of the security deposit she had paid, less $560 deducted for two weeks' rent, plus $90 for the tribunal filing fee.

The tribunal did not void the agreement, did not order the $185 she spent on short-term accommodation, and did not accept she was justified in leaving because of the window or the wall cracks.

Why the tribunal decided it that way

The first question was what kind of agreement this was. ACT law has two types of residential arrangement: a residential tenancy agreement between a lessor and a tenant, which comes with the detailed standard terms in the Act, and an occupancy agreement between a grantor and an occupant, which only has to meet a shorter set of minimum rules called the occupancy principles. Tenants generally get more protection. Since amendments that commenced in March 2021, the starting point is to ask whether the arrangement fits the definition of an occupancy agreement in section 71C; only if it does not does the tribunal go on to ask whether it is a residential tenancy. Section 6A says an agreement is not a residential tenancy if it is an occupancy agreement.

The renter argued that occupancy agreements of this kind are limited to a bedroom in a boarding house or a bed in a dormitory, which is the example given in the section, and that this ordinary share house was neither. The tribunal rejected that. Under section 132 of the Legislation Act 2001 an example in an Act is not exhaustive and does not limit the provision it illustrates, and nothing suggested a contrary intention here. The explanatory material for the amendments pointed the same way: it accepted there is no clear definition of a boarding house or dormitory and described the test by function, which is the exclusive use of a sleeping space in a building with other sleeping spaces, with related access to shared facilities. This room met that description. The renter had a right to occupy the room for value, as a home, with exclusive use of the bedroom and shared use of the kitchen, bathroom and laundry, and the agreement said it was an occupancy agreement. So it was an occupancy agreement under section 71C.

That classification mattered for the sale issue. Section 46B lets a tenant end a fixed-term tenancy on 14 days' notice where the lessor offers the premises for sale within six months of the start and did not disclose the intended sale before the agreement, and section 46 lets a tenant apply to end a tenancy induced by a false or misleading statement. Neither applies to occupancy agreements. The tribunal looked instead at general contract law and the Australian Consumer Law. At common law, saying nothing is only a misrepresentation where a party had a duty to speak, which the tribunal did not think arose here. Under section 18 of the Australian Consumer Law, which bans misleading or deceptive conduct in trade or commerce, silence can mislead where there is a reasonable expectation that a matter would be disclosed. The tribunal pointed to features suggesting such an expectation existed: the renter was relatively unsophisticated, the owners had been letting rooms for some time, and the agreement was being discussed only shortly before the occupancy was to begin.

Even so, the tribunal said the right answer was not to void the agreement. It said that had the point been argued under the Australian Consumer Law, it would have varied the agreement so that it could be ended on two weeks' notice once the owners signalled they intended to sell. It reached the same place through the occupancy principles, holding that several terms of this agreement were inconsistent with them, including the termination terms, and that the agreement had no mechanism at all for the occupant to leave early. In those circumstances two weeks' notice was reasonable, which is why two weeks' rent of $560 was deducted and the balance of the deposit, plus the filing fee, was returned. The published text stops part way through this last part of the reasoning, so the full explanation of the inconsistent terms is not available.

What this means if you are in a similar position

If you are in a similar position, renting one room in a share house with shared kitchen, bathroom and laundry, this decision shows that the label on the paperwork is not decided by what the parties call it alone, but it does matter. Where an agreement says it is an occupancy agreement and the arrangement really is exclusive use of a bedroom with shared facilities, ACAT can find it is an occupancy agreement under section 71C even though the place is not a boarding house or a dormitory in everyday language. That changes which rules apply: the tenancy protections about sale, bonds and termination do not carry across, and the shorter occupancy principles do.

The decision also shows how tribunals treat complaints raised late. Reasons for leaving that first appear after a renter has already said they are going, and that the other side was never given a chance to look at or fix, carry less weight. The tribunal here preferred the owners' video of the inspection and a later building report over the renter's account of a broken window, and it noted that she had not let them show her how to close it. By contrast, the owners' failure to mention a possible sale before she committed was treated seriously, and it is what produced the two weeks' notice outcome rather than full rent to the end of the term.

In this kind of dispute most people start by putting their claim to the landlord or agent in writing: a letter setting out what was paid, what they accept should be deducted and what they say should be returned, with the photos, messages and dates attached. If that written claim does not resolve it, the next step people usually take is an application to the tribunal.

How to apply: our step-by-step guide to a ACAT application. More decisions: ACAT cases and house rentals and bonds.

Source: MAO v XU & ANOR (Residential Tenancies) [2026] ACAT 29 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.