tenents running a business from my place

G'day,

today when i was in my rental checking up on a maintenance issue, i noticed that my tenant has setup a makeup artist desk, looks pretty pro, has a couple seats and some lighting, i didnt mention anything at the time.

but after reading abit online, i am getting info that suggests(if a biz is being run) i would need to declare gst - which seems strange as i have no partnership in the biz and they may have even be registered for gst.. i should inform my L/L insurance provider and ask that the tenent gets public liability? would i also need to inform council or anyone else? or do anything else?

another related issue is the lease only mentions one person staying at the property and he told me a week or so ago that his gf is now staying living there as well, i said all okay and that i would write up something mentioning her that we both sign, but now i'm thinking i should have a lawyer write something up mentioning her and her biz unless there isnt an official lease amendment form..
i am on the gold coast btw
any advice would be appreciated. thanks.

 

I'd be tempted to go a "don't ask, don't tell" policy to be honest.

 

There's no GST payable on a residential rental, so nothing for you to declare on that front.

For the business being ran there - how serious of a business is it? Just a hobby? If so, and its not causing any trouble, why not just let it be for now.

Or are people lining up for appointments at the property every day? Will depend on your local council as to whether they require approval for businesses to be run. If public / customers are coming to the property, I'd ensure they have PL insurance. I'd notify your LL insurance too.

For the other adults living there, I'd get them added to the lease. That way they can be jointly / severally liable for the property.

 

thanks for those replys, im pretty sure it is just a hobby, its definetly not her full time work, i just dont want my insurance void if i ever made a claim. il just see how it gors for now. how would i go about adding her to the lease? is there a lease amendment for for qld? cheers

 

There is no GST issue for you. Your property is a residential property. Its really a lease (breach) and council issue. Home based businesses need council approval and often the lease must permit it too. Business enterprises are not a hobby - if someone pays. The hobby issue is one for them to be worried about. As far as it seems its a busienss. Nobody does this stuff for laughs. They get paid. So what do you do when they start to breed cats ? Or sell drugs ? Where is the line when a tenant deceives you and breaks the agreement ?

If the lighting burns the joint down you may be uninsured and if someone slips etc you may have a claim that isnt met. I wouldnt be acting like a lawyer and committing a thing to writing. You are effectively giving approval to the problem.

No PM ?

I would enquire of council for their rules. The property owner may be liable for penalties if they consent and permit illegal use ? Take care you arent doing that.
And ask your insurer etc. Then get advice on rectifying their blatant disregard for the agreed lease.

 

Better check with your insurance company if the tenant has paying clients visiting the house. This is a place of employment even if part time.

At the very least I would ensure that the tenant get council approval for her business at your address. I would also insist she had appropriate public liability insurance. However, be aware that this may not necessarily prevent your being sued in the event of an injury to a client on your property.
Marg

 

I had a tenant ask a while ago about running a business from the property. I chatted to my insurer at the time who advised that if there is a business run from the property it would void my insurance so I declined their request.

 

We also once rejected a tenant who wanted to run a cosmetics sales business from the property, again due to insurance issues.
Marg

 

If something happens and a liability claim is made, since they never informed you or requested permission to run the business, can you still be sued if you did not know there was a business being run? Could you not be liable since you were not aware?
I think this would be common, I've visited many home beauty rooms and had never thought about it, I'm sure a lot would be renting and they wouldn't have owner/council approval.
Interested to know about this, as many people work from home nowadays.

 

I've had a tenant who was making or amending Indian Saris in one IP, and she had my property address on her business card.

At another IP the tenant would fix damaged cars. I believe he might have just bought the cars off gumtree to make a profit by doing them up and reselling and doing this one car at a time.

Both sets of tenants always paid their rent on time...

 

Can you explain how I could still get sued though?

This is more just for my understanding, so my public liability cover which is included in my landlord insurance is to cover for injuries etc to my tenants and their guests
but not for their customers (insurance companies could argue that they were customers, not guests etc) so the tenants would need liability cover for their customers,

so given it's probably just a part-time business for her, she may not want to fork out for public liability, so then I'd say no to running the biz, but they still may do it on the sneaky, and I could be sued even if I didn't know and they stated there was no business?

 

Can you explain how I could still get sued though?



Simple.

Client visiting premises for appointment falls on staircase. Investigation shows stairs damaged or not compliant with regulations. Or trips on a dislodged or broken paving stone.

Tenant's insurance flicks the problem back to you and your insurance company.
Marg

 

makes sense thanks, so what would her PL insurance take responsibility for and cover?
lets say for your example my stairs were in perfect order, yet her client still slipped and broke an arm? is that what her pl insurance is for or would that still get put on me?

 

The injured party can sue anyone they believe may have some responsibility.

If it were me and the injury warranted legal action, I would sue both the tenant and the owner of the property. (If action against one party was unsuccessful, a separate action would have to be started against the other. That is why both probably sued at the outset.)

The owner would then lodge a claim with his/her PI insurer to protect his/her interests. If the action is successful, awards can be made by the judge against the tenant, owner, or a combination of both.

Or the decision can be that the injured party was not taking sufficient care and the slip was an accident and no one held legally liable.

Problem is that even pie-in-the-sky legal action with virtually no chance of success costs money to defend.
Marg

 

I would:
1) check insurance policy and if reqd, make sure public liability is fully covered for any 'customer's visiting the property
2) jack up the rent