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Separating section in home for ‘boarders’

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  • Separating section in home for ‘boarders’

    I have a seperate minor dwelling on my property that is currently tenanted.
    My local Council only allows for one minor dwelling per property.

    My house design (2006) could easily enable one end of my house ( which consists of 2 bedrooms, bathroom and lounge with plenty of storage cupboards) to be ‘closed off’ and used for a couple ( as boarders).

    I need to add -
    1. Laundry taps to bathroom by removing the bath ( we are in tank water so this is preferred).
    2. Ranchslider where existing lounge window is ( same width) to provide a closer entry point from the driveway.
    3. Sink to existing bench in lounge.
    4. Add stove top bench and microwave.
    5. Shower in toilet area on our side ( a wall from next to sink above in 3.). Plumbing would be in a close proximity.
    6. Lock on door to seperate areas.
    7. Maybe firewall? ( just for safety).

    We would look at advertising for boarders wishing to have 2 bedrooms and a seperate lounge. Power would be covered ( we have solar). Wifi would be halved.

    I have checked with council regarding adding a sink ( mentioning it was for my kids paint play). The council verbally said it should be fine and to go through the consent process.

    I spoke to my insurance company regarding my prospective boarder wanting to cook in their area and if we were covered by insurance should there be an accident ( fire etc). They advised that as long as the event is not on purpose or due to neglect that it would be covered. It was important that my boarder had their own home contents insurance as the cover would allow for accidental damage through their public liability section.

    Of the list above, what do I need to consent with Council?

    Reading previous posts regarding self contained dwellings, boarders, tenants etc really puts a person off the idea due to the tenant/boarder being able to potentially see fault and claim for already paid rent/board.
    It appears there is less complication around having boarders as opposed to tenants, hence why I have gone down this track.

    Thankyou in advance for your feedback.
    I haven’t posted for at least 5 years


  • #2
    Hi Neo,

    I think your main problem with be with council and getting consent. If you don't get proper consent, then you could have insurance or tenant issues.

    From a tax angle, they won't be boarders and are really a separate tenancy. So you would have to return the income and claim portion of expenses relating to tenancy.

    Book a free chat here
    Ross Barnett - Property Accountant


    • #3
      Hi Neo,
      You’re dealing with three separate issues:
      [1] What law to apply (RTA (tenant/boarder), civil under guest agreements, for flat mates or short-term excluded by the RTA, corporate accommodation agreements, etc)
      [2] Taxation, expenses for producing income are income tax deductible
      [3] Getting insurance , most troublesome

      For alterations to your home and dealing with the council - check out work that requires council’s consent.
      Bypassing the RTA under expected changes of the RTA by labour makes sense to me.


      • #4
        if you close off part of the house you are indicating separate household

        Boarders are part of the same household and a detached dwelling with 5 boarders is still a detached dwelling. YUnder the RTA if the agreement relates to a room then this is a boarding room (boarder is not defined)

        There is an assumption that boarders use community areas provided by the LL. By closing off you are not doing this?

        You can have a self contained space for a member of the same family (granny flat) and this should apply to a member of the same household as well but you need to demonstrate that they are part of your household renting the room helps this perception. Dont lock the door If you want privacy dont have boarders,in practice they know to keep to their own space.

        You only need a consent for sanitary fixtures if you increase the total number of all fixtures in the house.


        • #5
          Thankyou for your comments.

          So if I leave the door between the house and so called unit unlocked, but still organise the improvements ( ranchslider, sink, w/m taps) it appears I can have boarders. I do understand that they would generally keep to their area. I have checked with my insurance company regarding cover and they are ok with boarders and cooking ( see further details above regarding ins).