Tenants ripped off at Christmas, issue of subletting could be “rife” across Hobart, agent says

Two tenants were fleeced thousands of dollars, while the man they thought was their landlord got away with free rent – and some pocket money, after being caught in an elaborate rental scam. READ THEIR STORY >>

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TENANTS at a Sandy Bay rental property say they have been left out of pocket after being embroiled in a subletting scandal whereby they paid bond and rent to a family that falsely claimed to be landlords.

Sydney pair Elly Stone and Nikesh Todi’s situation has raised concerns about a possible widespread issue of Hobart tenants profiteering from their rental home at the expense of subtenants.

Sandy Bay tenants Elly Stone and Nikesh Todi alongside owner of the property Stephen Hannan and PRD real estate agent and property manager Jane Donoghue. Picture: Zak Simmonds

Tenants Union Tasmania wants better protections in place for subtenants who enter into a private rental arrangement.

State laws are such that disputes between a head-tenant and a subtenant need to be sorted out between the parties.

The Residential Tenancy Act 1997 does not apply to the subtenant, meaning the Residential Tenancy Commissioner cannot help a subtenant when there is a dispute.

When Elly and Nikesh moved into the Sandy Bay home, which the tenant advertised online, property owner Stephen Hannan had no idea of the secret arrangement.

Along with Ellie and Nikesh, three other subtenants have lived at the four-bedroom property this year while the contracted “head” tenants stayed there periodically.

The head tenants were receiving $1165 weekly from their subtenants, while paying $1125 in rent to the real estate company managing the home.

Mr Hannan, who leases the property through PRD Real Estate, said he was alerted to the situation when he started receiving “huge” water bills.

“I thought there was a problem with the irrigation system because TasWater told me the property’s water usage indicated there were six people living there,” he said.

“These young adults [subtenants] have lost hope of getting their money back from the family they paid their bond to.

“It’s their Christmas money and for some of them this has been their first experience of venturing out of the family home.”

Mr Hannan is considering his legal options in the face of Tasmanian laws which state “a property owner cannot unreasonably deny permission for the head-tenant to sublet”.

However, the head tenants’ PRD property contract states: “the tenant must not rent the premises to someone else … or allow extra people to permanently or on a regular basis occupy the premises without the consent in writing of the owner”.

After finding out of the situation, he issued the head tenants a 14-day eviction notice which followed with the head tenants issuing the subtenants a notice to vacate the property.

Elly and Nikesh said they are each owed hundreds of dollars in bond money.

Sandy Bay tenants Elly Stone and Nikesh Todi. Picture: Zak Simmonds

“We’ve been trying to communicate to the head tenants that they’re in breach of their contract. We want our bond back but they’ve been giving out reasons why they are holding our bond,” Nikesh said.

The pair said they realised the head tenants weren’t the true owners of the property after they contacted PRD inquiring about why they had received eviction notice.

Elly and Nikesh have since met with Mr Hannan who has allowed the pair to live at the property free of charge ahead of their flight back to Sydney next month.

PRD property manager Jane Donoghue said the issue could be rife across Greater Hobart.

PRD real estate agent and property manager Jane Donoghue alongside owner of the Sandy Bay property Stephen Hannan. Picture: Zak Simmonds

“You do find people residing in properties but this situation is a little different in that the tenant has taken bond off others and made a profit off the property,” she said.

“I think there is a little bit of this going on across Hobart but it’s about proving it,” she said.

A state government spokesman said if a subleasing tenant believes they are owed an amount of money by the head tenant they can pursue the head tenant by lodging a civil claim with the Magistrates Court.

The head tenants were contacted for comment.