Join Australia's most dynamic and respected property investment community

Issue with leasing granny flat in Melbourne

Discussion in 'Legal Issues' started by ecia, 17th Aug, 2015.

  1. ecia

    ecia Member

    Joined:
    17th Aug, 2015
    Posts:
    6
    Location:
    Melbourne
    Hi, all, I need an advise if someone had the same issue with leasing granny flat in Melbourne(Frankston City Council). The property was bought 5 years ago with well build self-contained Granny flat. We have leased it separately. Didn’t have any issues for 5 years but recently tenant didn’t get along with neighbours across the road and some complains went to the city council. First we get the rates separate on the granny flat and payed them. Then the request came to inspect the property - city council inspector together with building inspector.

    They told us that the granny flat had a building permit for the dependent person (believe that any granny flat in Victoria has the same permit) and can’t be rented separately.

    We are still waiting on the letter from the council and building inspector but during the discussion they already indicated that the granny flat should be removed or the cooking facilities should be removed, then the building can stay.

    Not sure why city council charges us a separate rates if they believe that granny flat should not be leased?

    Besides us loosing the income, it sounds crazy to me not able to provide perfectly good accommodation when we have such a shortage for the low cost rentals. I believe that we have thousands and thousands of granny flats rented in Victoria, are they all illegal? Anyone else has/had the same issue?

    What are my options? Can I put my tenants on one contract and then have a separate contract every time tenant in the house or granny flat changes?

    Any other suggestions, please?
     
  2. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    893
    Location:
    Perth, WA
    Have you had a closer look at the planning rules around granny flats in your area?
     
  3. ecia

    ecia Member

    Joined:
    17th Aug, 2015
    Posts:
    6
    Location:
    Melbourne
    No, as I am not building one. It was built 20 years ago or so.
     
  4. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    893
    Location:
    Perth, WA
    I'm not talking about the building rules - you need to check the current planning rules for granny flats in your area, because the council is saying its not permitted to rent separately.
     
  5. ecia

    ecia Member

    Joined:
    17th Aug, 2015
    Posts:
    6
    Location:
    Melbourne
    I learned that the planning rules - granny flats are allowed to build for the dependent person only and it should be removed if not used for the dependent person. this is an old rule. In other states (NSW and some others) it is allowed to build and lease self-contained granny flats/bungalows, but Victoria still has old rules. in the main time lots of people leasing granny flats and I just want to know if some other people had the same issue and how to resolve it with minimal financial impact. I also called to Consumer affairs and they told me that the tenancy act doesn't have anything about not allow or allow to rent granny flat.
     
  6. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    893
    Location:
    Perth, WA
    Personally, I would be getting proper planning law advice on the issue before deciding on a course of action.
     
  7. ecia

    ecia Member

    Joined:
    17th Aug, 2015
    Posts:
    6
    Location:
    Melbourne
    Thanks, where I can get planning law advise? Some law firms specialising on it or planners?
     
  8. S.T

    S.T Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    428
    Location:
    I'm not selling anything
    You have no options, you cant rent a granny flat separately in Vic, you can only have a dependent living in there.
     
  9. ecia

    ecia Member

    Joined:
    17th Aug, 2015
    Posts:
    6
    Location:
    Melbourne
    So I can't rent it even if I have one contract? My current tenants are happy with this arrangement
     
  10. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,358
    Location:
    Sydney
    I thought the issue is clear. No. Same as you cant open a liquor store in your garage. The term granny flat has clear origins in use by family as a portion of the home external to the main portion of the home.
     
    Marg4000 likes this.
  11. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    You can't?! Now you tell me....
     
  12. ecia

    ecia Member

    Joined:
    17th Aug, 2015
    Posts:
    6
    Location:
    Melbourne
    was talking about it to the planner and he referred me to the
    52.23 SHARED HOUSING


    A permit is not required to use a building, including outbuildings normal to a dwelling, to

    house a person, people and any dependants or 2 or more people (including people with

    intellectual disabilities) if the building meets all of the following requirements:


    ·Is in an area or zone which is used mainly for housing.

    ·Provides self contained accommodation.

    ·Does not have more than 10 habitable rooms.

    Will email copies of the council letters to him tomorrow, will see if he can suggest anything. He mentioned to me that permit may be not required, but building still need to comply to the building regulations.
     
  13. Lindaqu

    Lindaqu Member

    Joined:
    30th Mar, 2016
    Posts:
    7
    Location:
    Melbourne
    petitioning to change the law. The Hon. Richard Wynne MP, Minister for Planning: Amend the Residential Planning rules to allow 60m2 permanent secondary dwellings to be built behind existing homes without planning approval and for use or rental by parties unrelated to the