Home & Income - 2 units to 3

[DudleyBoys]

Hi everyone,
I have a property in Grey Lynn. It is a 6 bedroom bungalow on top and a 6 bedroom concrete block flat below. It is legal in its current form with separate rates paid, meters etc, since the 1970s. The upstairs rents easily. The downstairs I have problems renting. Its not that nice but it is reflected in the price of $800-$900/week for a 6 bed in Grey Lynn which is pretty cheap.

The lower flat has a main kitchen with all the facilities and a secondary kitchen with a benchtop and sink etc, essentially a "bar". Once upon a time I think this downstairs flat was rented out as 2 x 3 bedroom flats. I am thinking of splitting this up again as I think 2 smaller flats rents easier than 1 larger flat, but I am nervous about a few things:

• Insurance - in the event of a fire, I dont think I would be covered
• Tenants suing me for provision of an illegal flat
• Something else I dont know about but makes me nervous anyway

I could easily put a benchtop convection oven into the secondary kitchen and they would be good to go. I have enquired with Council and under the zoning it IS permitted to have 3 kitchens on the property, however to do it properly I would need to fire rate, pay contributions etc. it sounds expensive and uncertain.

Am I best to just go ahead and do it? Or should I just put up with a difficult to rent 6 bedroom basement flat?

Some advice would be appreciated.

[artemis]

Could you advertise and rent the second part as a flatmate or rent by the room situation? I think it would need lockable doors between and probably best to include power in the rent for both parts. And it would need to be carefully documented for all parties.

[John the builder]

can you prove there was 3 households there before and claim existing use rights? This avoids dev levy

If you want seperate tenancy then you need fire seperation (this should be only a wall as ceiling is already a fire seperation?

if you let as flatmates then you could use self contained spaces informally and they happen to have access to their own kitchen

discclose to insurer and they have no come back later

[RollingCloud]

You have answered your own questions:

• Insurance - in the event of a fire, I dont think I would be covered - probably not, especially no fire separation
• Tenants suing me for provision of an illegal flat - yes possible
• Something else I don't know about but makes me nervous anyway - Yes the Council and the Building Act

Unless you want to live nervously get it done right or stay with the 6 beddie