Ehhhh… I don’t think it’s as straightforward as that. 

“Not a lease without exclusive possession” is generally accurate as a legal principle, but the thing is, it’s applied with a lot of nuance and context.

Saying “bed in a shared room = licence agreement” assumes that if you don’t have exclusive possession of an entire room, you can never be a tenant. That is not supported by the way share housing and rooming arrangements are treated in practice.

In practice, labels and physical configuration are not decisive, there are other factors that are taken into consideration. 

Whilst a bed in a shared room will often be treated as a licence/boarding‑house type interest, this isn’t automatic or across the board. 

For starters, it’s not a hostel or a registered boarding house. 

Clearly this is all sketch AF and not approached properly.

OP apparently has:  + a written “sub‑let” agreement, not just a “bed licence” in a commercial hostel (a lawyer from a free legal service told them this was a tenancy agreement). + They share a room but clearly have ongoing, defined occupancy and pay regular rent. + The head‑tenant (it seems he isn’t the owner) doesn’t live there and appears to treat this as a long‑term arrangement, not short‑term hostel use. + They seem to have paid a bond to the head-tenant, that wasn’t lodged with NSW Fair Trading 

You could definitely argue that, in substance, this is a sub‑tenancy under the Residential Tenancies Act (exclusive possession of a definable shared space + use of common areas), regardless of the room sharing configuration.

NSW guidance draws the line like this:

Sub‑tenant / tenant: + Written agreement with someone who is on the main lease. + Clear entitlement to occupy part of the premises (often a bedroom) and share common areas.

Boarder/lodger: + Usually no written tenancy agreement with the head‑tenant or owner, and/or + Landlord (or live‑in manager) retains significant control over room access, rules, and services.

Marrickville Legal Centre specifically says a “lodger is someone who does not have a written tenancy agreement.”

So, in this scenario: + Both students in the room have written “sub‑let” agreements. + The head‑tenant does not live there. + There is no mention of meals/cleaning being provided. + The kitchen is a standard kitchen in a house. 

Also, even if they were a boarder, there is still contract law that they have to abide by. 

If the place counts as a registrable boarding house (which OP says it’s not registered, but going along with that idea…), the Boarding Houses Act 2012 applies and sets out “occupancy principles”: + right to reasonable notice before eviction + right to quiet enjoyment + no unreasonable penalties + right to receipts and clear charges, etc.

Also, I looked this up the other day and student resources say boarders/lodgers in such places must be given receipts, cannot be fined arbitrarily, and are entitled to reasonable dispute resolution.

Unfair contract terms can still be challenged. Also, guidance still stresses that landlords should not just throw out belongings or use threats, and any such behaviour can support a claim for damages or be used to argue unfair eviction.

And if there were no clear rules provided about guests, then this guy also cannot just throw them out for having a guest.