How Many Tenants Can Be on a Lease in NSW? What Landlords Need to Know

One question we hear often is: “How many people can I legally have on a lease?” And the answer surprises most landlords: NSW tenancy laws don’t set a fixed maximum number of tenants. Instead, it comes down to what’s reasonable for the property. The lease agreement should clearly state the number of approved occupants, and that number is typically based on the size, layout and amenity of the home. That figure is set by the landlord or property manager.

So, where does the ‘maximum four tenants’ idea come from? It’s a common misunderstanding tied to the Boarding Houses Act 2012. Under this legislation, a property may be classified as a boarding house if five or more unrelated adults live there and pay for accommodation. If that happens, the property may be subject to additional compliance, registration and safety requirements. That’s why many landlords and agents use a “four unrelated people” rule to stay on the safe side. But to be clear—this is not a restriction under the Residential Tenancies Act 2010.

How We Manage Tenant Numbers at One Agency Elite Property Group
We follow internal guidelines that protect our landlords while staying fully compliant with NSW legislation:

If the applicants are a family group (parents, children, siblings or extended family), we’ll assess the application based on property suitability. No extra approval is usually needed.

If the application includes four or more unrelated adults, it goes to a Team Leader for review. We consider layout, property size, safety standards and whether the tenancy still qualifies as a standard lease.

If there are five or more unrelated adults, the application is escalated to senior management. This helps us determine whether boarding house rules could apply and ensures all legal responsibilities are met.

The Bottom Line for Landlords
There is no legal maximum number of tenants under NSW tenancy law, but other factors like building compliance, lease terms and household setup do matter. The “four-person limit” is a risk management tool, not a legal rule. Our internal approval process helps protect your property and ensures every tenancy remains compliant.

If you’re unsure whether a particular household setup is right for your investment, reach out. Our team is here to guide you every step of the way.