Tenant Transfers: Why Changing a Rental Agreement Comes at a Cost

Changing the renters named on a rental agreement can sound relatively simple. One person moves out, another moves in, a partner is added, or one housemate replaces another. From a renter's perspective, it can understandably appear to be little more than changing a name on a lease. From the perspective of a rental provider and their property manager, however, there is considerably more involved.

At the commencement of a tenancy, a rental provider makes an important decision about who they are prepared to rent their property to. Applications are assessed, employment and income are considered, references and rental history are checked, tenancy databases may be searched, and the proposed household is considered as a whole. Ultimately, the rental provider agrees to enter into a legal relationship with particular people on particular terms.

When that household subsequently changes, it is generally not because of something the rental provider has done. Relationships change, friends decide to live together or apart, housemates relocate and partners move in or out. These are normal parts of life, but the result is that, through no action of their own, a rental provider can be asked midway through a tenancy to reconsider the people to whom they have entrusted a significant asset.

A transfer is much more than changing a name

Before an incoming renter can be approved, the property manager must establish exactly what change is proposed and assess its implications. Is one renter leaving and another replacing them? Is an additional renter joining the household? Are several people changing? Can the remaining renters afford the property? Is an outgoing renter seeking to be released completely from their existing legal obligations?

The proposed renter will generally need to complete an application and provide identification, employment and income information, rental history and references. Those details need to be assessed and verified, which can involve contacting employers and previous property managers, confirming references, reviewing supporting documents and undertaking appropriate tenancy database searches.

The property manager must then report to the rental provider, explain the proposed change, provide the relevant information and obtain instructions. While some decisions are straightforward, others involve considerable discussion and negotiation. Rental providers can understandably be reluctant to change an arrangement they carefully considered and approved only months earlier.

This can involve multiple telephone calls and emails between the property manager, rental provider, existing renters and proposed renters. Not every proposed transfer proceeds either. Applications are commenced and abandoned, proposed housemates change their minds, relationships change, documentation isn't supplied and applicants are sometimes substituted halfway through the process. These false starts still consume considerable professional time even though no transfer ultimately occurs.

Approval is only part of the work

Once approval is obtained, another substantial component of the work begins. The property manager must prepare the appropriate documentation, ensure the correct parties and dates are recorded, consider the existing terms of the tenancy and arrange execution by the relevant parties. Agency records and property management systems must then be updated so that notices, correspondence, rental information and future tenancy administration correctly identify those legally responsible for the property.

The bond also needs to be addressed through the Residential Tenancies Bond Authority, including coordination between outgoing, incoming and continuing renters. Victoria's introduction of portable bond arrangements adds another layer to this process, particularly where names, amounts, timing or parties do not align neatly.

Getting this right matters. A poorly documented transfer can create significant disputes later about responsibility for rent, damage, notices, compensation and the eventual return of the bond.

More regulation means more administration

Victoria has undertaken substantial rental reform over recent years, overwhelmingly directed towards strengthening renter protections and improving rental housing standards. Many of those objectives are understandable and important.

However, regulation has a cost.

Modern property management requires substantially more compliance, documentation, disclosure, record keeping and professional oversight than it did 10 or 15 years ago. Minimum rental standards, prescribed documentation, disclosure obligations, bond reforms and increasingly detailed procedural requirements all require systems, trained employees and professional time to administer correctly.

Tenant transfers provide a particularly clear example of an unintended consequence. A policy environment designed to provide renters with greater flexibility and protection also requires rental providers and their agents to undertake substantially more work when a renter asks to alter an existing contractual arrangement.

That work does not disappear simply because the legislation is designed to assist renters. It creates a real compliance and administrative cost somewhere in the system.

Importantly, the Residential Tenancies Act itself recognises this. While a rental provider cannot charge a fee merely for providing consent to an assignment, section 84 expressly permits a renter to be required to bear reasonable expenses reasonably incurred by the rental provider because of the assignment.

There is an important economic reality in that provision. Increasing the complexity, risk and administrative burden associated with a renter-requested transaction increases the reasonable cost of delivering that transaction. Where legislation requires additional professional work, ultimately someone must pay for that work. In the case of a renter-requested assignment, the Act expressly contemplates reasonable expenses being borne by the renter whose requested change has caused them to be incurred.

This is sometimes lost in the public debate. Regulation intended to protect renters can, in particular circumstances, increase the cost ultimately borne by renters. Tenant transfers are a good example of why regulatory outcomes need to be considered alongside regulatory intentions.

What about Jupp v Chambers and the often-quoted $88?

Much of the online commentary concerning tenancy transfer costs continues to rely upon the 2010 VCAT decision Jupp v Chambers. In that particular matter, VCAT reduced expenses claimed at $335.50 to $88, having considered the work involved in that particular transfer.

The case is relevant, but the way it is sometimes presented more than 15 years later is problematic.

Firstly, VCAT did not establish $88 as a statutory transfer fee or universal price for future assignments. Even renter advocacy material discussing the case acknowledges that the Member did not intend the $88 figure to apply to every case and that VCAT is not bound to apply that figure to subsequent matters.

Secondly, simply taking $88 from 2010 and applying CPI to produce a contemporary figure in the vicinity of $125 to $140 fundamentally misunderstands what section 84 requires. The question is not, "What is $88 in today's dollars?" The question is, what reasonable expenses were reasonably incurred because of this assignment today?

Those are very different tests.

The Victorian Parliament itself recognised this when section 84 was amended. The explanatory material expressly stated that flexibility was to be retained because assignments vary in complexity, while requiring a direct relationship between the assignment and the reasonable expenses incurred.

Property management in 2026 is not simply property management in 2010 with inflation added. The regulatory framework, employment costs, technology, cybersecurity requirements, documentation, minimum standards, disclosure obligations, bond administration and compliance risks have all evolved. The work involved in properly assessing, documenting and administering a transfer must therefore be assessed in the environment in which that work is actually undertaken.

Recent experience at VCAT also demonstrates why an historic $88 figure should not be regarded as a fixed contemporary benchmark. In a reported 2026 tenancy-transfer dispute, VCAT determined that a proposed $500 charge was excessive but nevertheless assessed $350 in total as reasonable in the circumstances. That is exactly why each matter needs to be assessed on the work and reasonable expense actually involved rather than by mechanically indexing a 2010 decision.

Across Melbourne, particularly in inner-urban markets where changing household arrangements and share houses make transfers commonplace, property management agencies increasingly charge in the vicinity of $300 to $500 for transfer administration, depending on the circumstances and services required.

Changing a legal agreement takes work

Renters are entitled to make changes in their lives and, where permitted by law, request corresponding changes to their rental arrangements. Rental providers are equally entitled to have those requests properly assessed, documented and professionally administered.

A rental provider should not be financially disadvantaged because the household they originally approved subsequently wishes to change its composition. Equally, a professional property management business cannot reasonably be expected to absorb hours of additional work generated by changes to an existing tenancy as part of its ordinary management service.

A properly managed transfer protects everyone. It ensures an incoming renter is appropriately assessed, allows the rental provider to make an informed decision, properly documents the release and addition of parties, and keeps the rental agreement, agency records and bond registration aligned.

A tenant transfer is not simply changing a name on a document. It is changing the parties to an existing legal agreement, and doing that properly requires time, expertise, compliance and professional administration.