Granny flat rental in QLD - what options?

[jerrybee]

So since it's illegal to rent it out separately from the main house, what other options do I have, other than the obvious one of renting out the whole lot? It's a 5 bedroom house with a 2 bedroom granny flat. It's actually very hard to find any families that actually need 7 full bedrooms. It just seems like such a waste that I can't do much with it.

Can I rent it out to someone for business purposes, as long as they're not living there? Is *living* there the key to this? Or is that irrelevant? It's 45 metres from the main shopping area. Before I bought it they rented it to a lady who ran a Thai massage business from it. Actually the way they built it, it looks like a little office and less like a residence. The look combined with the location kind of makes it great for that kind of thing. But obviously I don't want to follow suit if it's not even legal.

As a last resort, if I can't rent it out for residential or a home business, can I use it for a business of my own? Or does the law say that the WHOLE package needs to be rented out as one lot, and that even I as the owner can't keep it to myself?

If according to the rules I can't rent them out to separate people, and I can't live there and rent out the flat, can I do the opposite and "live" in the flat and rent out the house instead? It's not really clear to me what the rules are.


**I just thought of another option. I was thinking of renting the whole lot to students anyway. This is a lot more trouble from a management perspective, so I was thinking of asking this girl I know to live there and manage it all, and I would give her free rent in return. She's living in a sharehouse right now and is constantly having to advertise for new roommates etc anyway so it would be perfect. Since it'll be free, is this a loop hole I might be able to use to my advantage? Or does money not have anything to do with this?

 

[Sequin]

What local government area? The rules are dependent on the local planning scheme, not State rules.

 

[DaveM]

Rent the whole house to a head tenant for a higher rate and let them sublet the downstairs themselves

 

[RPI]

What sequin said.
Your second option sounds like a hostel

 

[jerrybee]

What local government area? The rules are dependent on the local planning scheme, not State rules.

Brisbane City Council.

 

[jerrybee]

Your second option sounds like a hostel

Na not interested in having anyone stay less than 6 months. High turnover is not good in terms of wear and tear and it's more trouble, even if I'm not directly managing it.

 

[jerrybee]

Rent the whole house to a head tenant for a higher rate and let them sublet the downstairs themselves

I think that's what the previous tenant was doing, because there was only one person on the lease but like 5 completely separate parties living there. However wouldn't she be breaking the law too?

I don't want to simply use this strategy if someone (even if it's not me) is still breaking the law!

 

[gaiusb]

Brisbane City Council's Planning Scheme only allows up to 5 unrelated persons to live in a house. This includes the granny flat (aka secondary dwelling). However any number of people related by blood can live in the house and granny flat.

If you rent this out to more than 5 unrelated people then you are getting into a boarding house situation, and will need to get a building approval from a certifier to reclassify the building from a class 1a dwelling to a class 1b boarding house. You may also be required to make a planning application to Council to change the use from a dwelling house to a multi-unit boarding house.

There is considerable amount of risk these days and Council will may come down on you like a tonne of bricks.

There isn't a loophole about money, it's purely a building code of Australia and Council planning scheme issue.

 

[jerrybee]

If you rent this out to more than 5 unrelated people then you are getting into a boarding house situation

oh so you're telling me that I CAN rent this out separately, as long as the house + granny flat doesn't exceed 5 people?

This is totally different from what I've been told. I was told that the person actually living in the granny flat MUST be a dependant of someone living in the main house.

Have I been mislead?

 

[gaiusb]

oh so you're telling me that I CAN rent this out separately, as long as the house + granny flat doesn't exceed 5 people?

This is totally different from what I've been told. I was told that the person actually living in the granny flat MUST be a dependant of someone living in the main house.

Have I been mislead?

I think so.

If you're saying the granny flat is 2 bedrooms, I imagine it would be considered a 'secondary dwelling' in Council planning scheme which is max 70sqm in floor area, max 20m from the existing dwelling and to be used as a single household group (i.e. max 5 unrelated persons). This is straight from the House Code.

Forget the word 'granny', no one has to be dependent to live in it.

 

[jerrybee]

I am REALLY confused now.

The link you sent me seems to confirm that it's legal.

However I found Brisbane City Council's own FAQ's page:

http://www.brisbane.qld.gov.au/plan...stions-about-building-a-new-house/index.htm#3

3. Can you rent out a Secondary Dwelling (granny flat) under a house?

No. Acceptable Solution A8 in the House Code (PDF - 642kb) states that a House must be used by a single household group. Renting out a Secondary Dwelling or "granny flat" would be contrary to the Acceptable Solution as the house is used by one group and the Secondary Dwelling by an autonomous group.

That seems to contradict the link you posted. But...guess which page that FAQ's page directs me to? The same link you posted! What on earth?!


UPDATE: OH I figured it out!

4 people in main house on one lease (or 4 leases) + 1 person in granny flat with one lease = NOT ALLOWED

4 people in main house + 1 person in granny flat, ALL of them on the SAME lease = ALLOWED

 

[RPI]

I have been to Court representing a large group of owners on this question. Council is preparing a Supreme Court action to back up their case.

All of the properties I represent contain no more than 5 unrelated people, but you still can't rent it out to separate groups. They secondary dwelling is subordinate to the primary one, that means it forms part of the same household, shares food etc.

I would not recommend renting separately until the determination of this new case, which we will be representing a large group of owners in again. Probably won't resolve this financial year, may not resolve this calendar year if they don't file soon.

 

[SOP]

Can you find three people who want to rent the house and two people who want to rent the granny flat and put them on a single lease?

 

[jerrybee]

I have been to Court representing a large group of owners on this question. Council is preparing a Supreme Court action to back up their case.

All of the properties I represent contain no more than 5 unrelated people, but you still can't rent it out to separate groups. They secondary dwelling is subordinate to the primary one, that means it forms part of the same household, shares food etc.

I would not recommend renting separately until the determination of this new case, which we will be representing a large group of owners in again. Probably won't resolve this financial year, may not resolve this calendar year if they don't file soon.

Am I right to say this summarizes it?

4 people in main house on one lease (or 4 leases) + 1 person in granny flat with one lease = NOT ALLOWED

4 people in main house + 1 person in granny flat, ALL of them on the SAME lease = ALLOWED

 

[RPI]

Can you find three people who want to rent the house and two people who want to rent the granny flat and put them on a single lease?

Still unlawful under current interpretation by BCC

 

[jerrybee]

Still unlawful under current interpretation by BCC

Wow. Why do they make the rules so vague, why not just come out and say NO one can occupy it except the owner if the main house is rented out.

Instead we have people all over the city asking for clarification over and over again.

 

[DEC]

Single water and power meter will be an issue.

 

[Tim86]

I've got the same situation pretty much. This is what I do.

1 Tenancy agreement.
5 max people all on the tenancy agreement.
All people on the one tenancy agreement.
Technically all people are allowed access to all areas of the house and granny flat, however in reality they keep themselves seperate.
Appendix A to the tenancy agreement states the rental portions for each tenant with a higher amount for the granny flat as it is worth more. Electricity and water is included in the rent so no need for extra metre etc...

If I were you I would set your IP up like that. You could charge say $280 - $350 for the granny flat including bills depending on the going rate for such things in your area, and around 160 per room with 4 rooms rented in the house.

But just advertise the granny flat as a room so council doesn't catch you out and start to say you are trying to rent it seperate from the house. Just advertise it as a room in the house. You can even say something like "you actually get two rooms combined for your bedroom, so lots of space" and put up pictures of the flat with it's own kitchen etc... and then you can say "all pictures are of your room available for rent".

That way you aren't advertising it as their own seperate area, you are just advertising it as a room which is part of the house. They can deduce from the pictures that they are in fact getting a lot more than just a room, as they will have their own kitchen and bathroom. Some websites like flatmates let you put up a video of the room available so that you can show exactly what is there. You can maybe even upload the video on youtube so that you can just link other advetisements to that video.

You will still have an extra room in the house as the house is 5 bedroom and can only be rented to 4 more people otherwise you are over the maximum amount. What I would do...and have done, is join 2 of those rooms in the house together and make one of them a bathroom and maybe even a split off area for a kitchenette. That way you can charge more like $220 rather than $160 for that room as it has it's own ensuite and kitchen. Or you can be less dodgy and just make it an ensuite and charge $190.

So you are looking at about $300 for the flat, $190 for the room with ensuite, $160 x 3 for the other rooms. You could get the girl you know to manage the property and keep it clean the common areas for a reduced rent of about $60 per week. That way you get a total income of $870 per week. Maybe more depending on the area and the going rates.

 

[RPI]

I've got the same situation pretty much. This is what I do.

1 Tenancy agreement.
5 max people all on the tenancy agreement.
All people on the one tenancy agreement.
Technically all people are allowed access to all areas of the house and granny flat, however in reality they keep themselves seperate.
Appendix A to the tenancy agreement states the rental portions for each tenant with a higher amount for the granny flat as it is worth more. Electricity and water is included in the rent so no need for extra metre etc...

That's good in that it makes it hard, at least under the current plan, for a Council to gather sufficient evidence that it is not being used by a single household. At present they would probably leave you alone.

Under City Plan 2014, the definition of a household has been tightened up significantly

Household - "An individual or a group of two or more related or unrelated people who reside in the dwelling, with the common intention to live together on a long-term basis and who make common provision for food or other essentials for living. The term does not include individuals living in rooming accommodation."

You would have an argument that any use started before the new plan comes into force was an existing lawful use under the previous plan. Another reason Council is doing the Originating Application in Court to determine the definition of a house (probably a household too) so they can hit people who are already doing it.

I think we have a good chance of beating them in Court on the OA and if so you should be good for any continued uses. Under the new plan though it does not look promising.

D

 

[Sequin]

Even though I said earlier that the rules are dependent on local planning schemes, this requires some clarification.

In Queensland, the Minister for Planning has made the Queensland Planning Provisions, current version 3.0. This is a consistent framework for planning schemes across Qld, including common definitions. New schemes must be consistent with QPP, but schemes can be very old, eg more than 10 years and may not be consistent with QPP. In any case, the local planning scheme must be referred to and understood.

The QPP (http://www.dsdip.qld.gov.au/resources/policy/state-planning/qpp-3.pdf) is the source of the following standard definitions.

Household - "An individual or a group of two or more related or unrelated people who reside in the dwelling, with the common intention to live together on a long-term basis and who make common provision for food or other essentials for living."

Dwelling house - "A residential use of premises for one household that contains a single dwelling. The use includes outbuildings and works normally associated with a dwelling and may include a secondary dwelling."

Dual occupancy - "Premises containing two dwellings on one lot (whether or not attached) for separate households."

So the State has set this rule and perhaps should be lobbied that it is inconsistent with supporting affordable housing and what is happening in some other states. It is also setting up an inconsistency and creating compliance issues. What happens when granny or the kids move out? Does the State support unused secondary dwellings?

I am not sure why the Minister has done this - perhaps responding to some reaction by some in local government about the desirability of secondary dwellings? Does anyone know more about the background?