Granny flat rental in QLD - what options?

This is an interesting topic, in NSW I know plenty of investors who rent out g/flats which are not legal and front house on separate leases, I also own one of these. I would guess at least 90% are not legal??
Seems that they turn a blind eye due to demand. Never, ever have a problem renting, plenty of demand (West Syd)

How do you get around insurance coverage?
GIO, as long as you disclose there is not an issue, I have 2 separate insurance covers for house/granny flat.
 
RPI said:
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."
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Wow! That's a very strict definition as far as common provision for food goes. When I lived in share houses at uni with friends, all on one lease, we would all have our own food arrangement. In fact from memory all friends who shared houses did the same.

What about a husband and with where they don't share food for religious or dietary requirements/beliefs?
 
So many people are in this situation :(

How liable am I if I simply lease the whole property out to a family. It is then up to them what they want to do with the granny flat, maybe rent out to students etc.

Assuming that I don't know anything about it??
 
RPI,

I'm just building my new PPOR in Brisbane and there's an attached secondary dwelling as part of it. Of course, under the build it is identified as a parent's retreat and connected internally, but it is a portion of the house that has separate external access and could readily be sublet.

However, reading your points above, it appears this is illegal in Brisbane. Welcome to the Sunshine state hey!! :) But do you know if this also applies to short term tenancies such as student accommodation? We are in the catchment for UQ and our neighbour lets rooms out to students. We could readily do the same downstairs. Its a large space, around 70m2 and could readily be transformed into 4 rooms with common areas to share including kitchen, living, bathroom.

Is it OK to let rooms separately to students?

Thanks,
Michael
 
I'm also curious about...even if you were ok with paying a small fine and having to evict your tenants etc, what are the insurance ramifications?

I think some people would be willing to take the risk, but if a tenant got hurt or the property burnt down and insurance wouldn't cover you because you had an illegal number of people in there, now that is seriously playing with fire (excuse the pun). I think this supersedes almost any other consideration. If insurance will cover you no matter how many people you had housed in there (within reason of course), then I think a lot of people would consider the potential upside to be too irresistible.
 
MichaelW: letting the rooms separately to students is a boarding house situation, which would trigger planning approvals from Council and an approval from a building certifier.

jerrybee: I don't think the fines from Council are 'small', I think several thousand dollars at least. I think certainly if there was a fire and it was found that the work was a boarding house, there would be major issues with insurance claims...
 
gaiusb said:
jerrybee: I don't think the fines from Council are 'small', I think several thousand dollars at least.
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If you're able to increase your rent by as much as 10k a year for multiple years before being caught, I think many would consider a few thousand 'small'.

gaiusb said:
I think certainly if there was a fire and it was found that the work was a boarding house, there would be major issues with insurance claims...
Click to expand...

Yup this would be the showstopper if it's true. No one should risk something like this if so.
 
I read recently the BCC fine for using a class 1a building (normal house) as a class 1b building ( ie a boarding house ) was $118,000 for a person . I will try and find the source
 
Just put everyone on the one tenancy agreement. Max 5 unrelated people. With an annexure to the agreement stating how much each person is required to pay. Solves all the problems.

And as far as the fine goes, I'm pretty sure that they send you a show cause notice first, if you aren't able to dispute the multiple tenancy agreements and multiple meter issue, etc... then you are required to ammend those issues at the end of the tenancy agreement. If you refuse to then at that stage I think you are issued with a fine. The cases of fines being given that I've read were after multiple warnings and the landlords simply ignoring all the warnings to remedy the issue. I really don't think council swoops in SWAT style finds a granny flat and then slugs you with a $100k fine.

Anyway I'm open for correction but from what I've read the above seems to be about right.
 
Does commercial use count as a tenant?

I have a 5 bedder with a granny flat that is designed for business. Could I rent the house to 5 individuals, and the granny flat to a business (e.g. accountant) as long as they don't live there. Or is that still considered a 6th tenant?
 
Would Strata title help?

Hey I'm a newbie to all this. Thinking of adding a granny flat to my house for passive income. (until I found this thread)

What about setting up a strata title and having the grannyflat and the house as seperate lots on the title with a body corporate?
 
DaveM said:
Rent the whole house to a head tenant for a higher rate and let them sublet the downstairs themselves
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This^^
There's nothing illegal about you renting the entire property to a tenant who then sub-leases 'rooms' to another boarder is there?
 
brazen said:
This^^
There's nothing illegal about you renting the entire property to a tenant who then sub-leases 'rooms' to another boarder is there?
Click to expand...

For NSW Residential Tenancy Agreement...
<>
Use of the premises by tenant
15. The tenant agrees:

15.5 not to cause or permit more people to reside in the residential premises than is permitted by this agreement.
<>

As a Landlord I wouldn't be happy if tenant sublease, even high rent is achieved. The sub leased tenant you have no visibility or reference. If the agreement is for 3 tenant to live, but if the tenant decide to sublease or put more people then it's breach.
 
RetireRich101 said:
For NSW Residential Tenancy Agreement...
<>
Use of the premises by tenant
15. The tenant agrees:

15.5 not to cause or permit more people to reside in the residential premises than is permitted by this agreement.
<>

As a Landlord I wouldn't be happy if tenant sublease, even high rent is achieved. The sub leased tenant you have no visibility or reference. If the agreement is for 3 tenant to live, but if the tenant decide to sublease or put more people then it's breach.
Click to expand...

Its only a breach if you want it to be a breach - why would any landlord want to make it a breach for the sake of it?

No visibility or reference is fine because you don't owe any sub-letters any obligations either.

You just have to sit there and collect the (inflated) rent.
 
thatbum said:
Its only a breach if you want it to be a breach - why would any landlord want to make it a breach for the sake of it?

No visibility or reference is fine because you don't owe any sub-letters any obligations either.

You just have to sit there and collect the (inflated) rent.
Click to expand...

Agree, the PM will raise this concern if they notice during an inspection, and its up to Landloard to take further action or not..

If you're already charging higher than market rent on the basis you're allowing tenant to sublease, then the risk maybe reduced because you have extra cash to weigh out the cost for extra wear and tear account for extra people in the house
 
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