Tenant freed from a share-house lease, but tribunal had no power to award him compensation (ACAT, 2026)

What happened

The apartment, a three-bedroom unit in the ACT, had been run as a share house since 2022, with tenants coming and going under a series of back-to-back leases (the Act calls these "consecutive tenancy agreements" — one lease ends and a new one starts with at least one of the same people staying on). Two of the three current tenants were already living there but were not part of the original 2022 group. The third tenant was new when the group signed a five-month fixed-term lease in November 2024, followed by a 12-month fixed-term lease in April 2025. He was given a copy of the condition report the original 2022 tenants had signed. No one had done an exit or entry inspection, or prepared an updated condition report, since 2022.

In early September 2025 the newest tenant's personal circumstances changed and he needed different accommodation. The other two tenants agreed he should be able to leave, and the group started looking for someone to take his room. He signed a lease on another property, moved out, and so was effectively paying rent twice. On 11 September 2025 he emailed the managing agent asking for the landlord's consent to be removed from the lease and telling the agent they were looking for a replacement housemate.

The agent refused the next day. The reason given was that none of the original 2022 tenants were on the April 2025 lease, that the April 2025 lease should never have been signed, and that the tenants would have to move out when the fixed term ended in April 2026. On 19 September the tenant said he had an interested person ready to go if the landlord consented. The agent replied that past tribunal cases supported keeping at least one original tenant on the lease for accountability, but gave no case references, and asked whether the tenants would break the lease instead. On 25 September the tenant repeated both requests, pointed out that the room was now empty so there was no overcrowding issue, and asked what reasonable grounds the landlord relied on. He did not give the name or details of the proposed replacement. The landlord kept refusing, and he kept paying rent on both properties up to the hearing.

The landlord's underlying worry was that no inspections had been done between the consecutive leases, so the condition of the unit at the end would be judged against the 2022 report. To fix that, the agent suggested either ending the existing lease and signing a new one, or having the tenants move out for 24 hours so a full inspection and updated condition report could be done.

What each side wanted

The tenant asked the tribunal for an order removing him from the lease and for the landlord to reimburse the rent he had paid. He accepted that, because his proposed leaving date fell inside the fixed term, the landlord was allowed to refuse consent to his removal for any reason at all. His argument was about the separate request: a landlord must not unreasonably refuse consent to add a new co-tenant, and he said the blanket refusal here was unreasonable and entitled him to compensation for the rent he paid after that refusal. The landlord, represented by its managing agent, said its concern was that no inspections or updated condition reports had been prepared between the consecutive leases, which it feared would affect its ability to claim against the bond or seek compensation for damage at the end.

What the tribunal decided

At the hearing, the tribunal ordered that the tenant be removed from the tenancy agreement with immediate effect, using its power under section 35G(1)(a) of the Residential Tenancies Act 1997. By that point the landlord had agreed with the two remaining tenants to add a replacement co-tenant, so the tribunal did not need to decide whether the refusal to add someone was unreasonable. The tribunal reserved its decision on compensation.

The formal order made on 29 June 2026 was: "The first applicant's claim for compensation is dismissed." No money was ordered to be paid by either side.

In removing the tenant immediately, the tribunal took into account that the remaining housemates supported his departure and understood they would have to cover his share of rent and utilities until a replacement was found or the lease ended; that his reasons for leaving were genuine, unavoidable and backed by evidence; that he faced significant financial hardship paying rent on two homes; and that the landlord had by then agreed to a replacement. The risk to the others was minimal, and any risk to the landlord was far outweighed by the hardship to him.

Why the tribunal decided it that way

The tribunal can only do what an Act allows it to do. The Residential Tenancies Act sets out specific situations where it can order a landlord to pay a tenant compensation — for example wrongful eviction, or loss caused by the landlord breaching the tenancy agreement under section 83(1)(d). An unreasonable refusal to add a new co-tenant is not, on its own, a breach of the tenancy agreement, so that compensation power did not apply. The tenant pointed to section 83(1)(m), which lets the tribunal make "any other order the ACAT considers appropriate". The tribunal held that this general power has to be read in the context of the Act as a whole: where Parliament had written a detailed scheme for adding and removing co-tenants, and had separately listed when compensation can be ordered, it could easily have added a compensation power here if it meant to. The tribunal also noted that Part 4 of the ACT Civil and Administrative Tribunal Act 2008 gives no separate general power to award compensation in tenancy disputes. The claim was dismissed for that reason alone.

The tribunal was careful to say the dismissal was not an endorsement of the landlord's conduct, which it described as generally unreasonable. It made several general observations. The Act treats the two requests differently: if the leaving date falls inside a fixed term, the landlord and remaining tenants can refuse to release a departing co-tenant for any reason (section 35A(3)(a)), but a landlord must not unreasonably refuse consent to add a new co-tenant (section 35C(5)(a)), must give written reasons to the other tenants and the proposed new person, and must do so within 14 days or be treated as not having responded at all — in which case consent can be taken to have been given.

On the condition report point, the tribunal said a refusal to add a co-tenant to a consecutive tenancy simply because no updated condition report exists is unlikely to be reasonable, unless there are genuine concerns about the state of the property or some other factor. Section 29 of the Act expressly allows consecutive tenancies to run on from an earlier report, and section 30AA sets out how the condition of premises is worked out at the end where no later report exists. Arranging inspections and preparing reports is the landlord's job, and sections 77 and 78 of the Standard Residential Tenancy Terms give the landlord the right to do routine inspections. Here the gap appeared to be an oversight by the landlord or agent, and, as the tribunal put it, the landlord's failure to plan should not become the tenants' emergency. There was also no evidence of overcrowding, since the tenant had already moved out and his room was empty.

The tribunal raised two further concerns. The agent's suggestion of briefly ending the lease, or making the tenants clear out for 24 hours so an inspection could be done, could have exposed the landlord to breaches: termination without cause during a fixed term has been abolished in the ACT, a lease can only be ended for a prescribed reason and by the prescribed process, and section 52 of the Standard Residential Tenancy Terms says a landlord must not interfere with the tenants' reasonable peace, comfort or privacy. Separately, the tribunal observed that on a proper reading of section 35C a landlord may be entitled to refuse consent where the name and details of the proposed new person are not supplied, because the section is written around a particular person. In this case the tenant had not given those details only because the landlord refused outright before he could. The tribunal said that raises a concern that landlords could sidestep proper consideration of such requests, suggesting a possible gap in the law, though it did not have to decide the point. It also reminded the parties that a tenancy does not end automatically when a fixed term expires; the termination process in the Act still has to be followed.

What this means if you are in a similar position

If you are in a similar position — sharing a rental with others and wanting to move out before the fixed term ends — this decision shows that the law treats two things as separate questions. Getting your own name off the lease inside a fixed term is something the landlord and your housemates can refuse for any reason, and the usual route then is to ask the tribunal to remove you. Getting a replacement housemate added is different: consent must not be unreasonably refused, written reasons must be given within the set time, and silence can count as consent. The decision also shows that "the paperwork between leases was never done" is a reason that is unlikely to stand up on its own, because arranging inspections and condition reports is the landlord's responsibility.

It also shows a hard limit. Even where a tribunal thinks a landlord has behaved unreasonably about a co-tenant swap, that by itself is not a breach of the tenancy agreement, and the Residential Tenancies Act does not give the tribunal a power to order the landlord to pay money for it. A general "any other order" provision does not fill that gap. Compensation in tenancy matters generally depends on pointing to a specific power — most often a breach of the agreement that caused you a loss.

One practical detail from the reasons is worth noting as a matter of how the rule works: a request to add someone is read as a request about a named person, so a general request to add "somebody" may not start the clock at all. In disputes of this kind the step most people take first is a clear written request or notice to the landlord or agent setting out what they are asking for and by when, which creates the record of the request and the response, before any application to the tribunal is made.

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

Source: HOVENDEN & ORS v EDWARDS (Residential Tenancies) [2026] ACAT 36 [2026] ACAT 36 (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.