Property owners can choose to rent out secondary dwellings, such as granny flats, to non-household members.
The property owner must obtain all relevant approvals before renting the secondary dwelling, including development/building and council approvals. Owners must also ensure the rental complies with smoke alarm requirements and all other health and safety regulations.
The address of the main property should be listed on the tenancy agreement. The agreement should also clearly outline what building (or part of the building) is being rented. The owner and tenant/resident may choose to include special terms to the tenancy agreement to set out the parties' agreement on matters such as mail management, how to access the secondary dwelling, car parking spaces, and gardening.
Types of tenancy agreements for secondary dwellings
Depending on the set up of the property, a secondary dwelling may be rented out as either a general tenancy or rooming accommodation:
- If the secondary dwelling is let out as a self-contained unit and the tenant/resident has no access to the main house, the arrangement falls under a general tenancy agreement.
- If the tenant/resident shares the kitchen or other facilities with other occupants of the house, the tenancy may fall under a rooming accommodation agreement.
Examples of a secondary dwelling falling under a rooming accommodation agreement could be:
Scenario 1
A rental where a granny flat contains more than one bedroom and each bedroom has been let out separately, with the residents sharing the facilities contained within the flat.
Scenario 2
A rental where the granny flat does not have a kitchen and the occupier is permitted to access the main house to use the kitchen or other facilities.
Gas and electricity
The tenant/resident and the property owner should negotiate and come to an agreement around how gas and electricity will be paid.
If the secondary dwelling is not individually metered, how gas and/or electricity will be charged should be included in the special terms of the tenancy agreement. The agreement should state:
- what service the tenant/resident is being charged for
- how the tenant/resident's share of the bill will be worked out
- how the tenant/resident should pay for the charges.
If there is no term like this in the agreement, the property owner cannot charge the tenant for these services. See charging for utilities for more details.
Water
If tenant/resident is going to be charged for water, the rented premises will need to be:
- individually metered
- water efficient and
- the tenancy agreement must state that the tenant is paying for water consumption.
See water charging for more details.