Tenancies bill affects boarding house owners

A boarding house. Photo / Glenn Jeffrey

Q I run several boarding houses and understand there will be a new law that will affect the way I operate. Can you tell me what will be different?

A You are right that there is a proposal to change the way boarding houses will operate. There is a bill before Parliament to amend the Residential Tenancies Act. If the bill becomes law in its present form boarding houses will be included in the act. This would mean some of the rules that apply to residential tenancies would then apply to your boarding house tenancies.

The bill is designed to extend the protection of the act to boarding houses to allow the boarding house owners and tenants access to advice, information and dispute resolution services already available to those with residential tenancies. In the bill, boarding houses are defined as "residential premises containing one or more boarding rooms along with facilities for communal use by the tenants and occupied, or intended by the landlord to be occupied, by at least six tenants."

A boarding house tenancy is "one that is intended to, or does in fact, last for 28 days or more." School hostels and university accommodation remain exempt from the act.

A lot of provisions will apply to your business but we will highlight a few. These are the obligations placed on both parties, the treatment of outgoings for the boarding houses, the rights to terminate the tenancy and a few miscellaneous issues.

Landlords will be obliged to: ensure the premises are kept in a reasonable state of cleanliness and repair; ensure all statutory requirements relating to buildings, health, and safety are complied with; refrain from changing the locks without informing the tenant; and refrain from interfering with phone, power or gas services.

Tenants will be obliged to: pay rent on time; ensure their room is kept reasonably clean; observe house rules and notify the landlord of any damage (and paying for that damage if caused by the tenant); refrain from damaging the boarding house; and refrain from interfering with the peace, comfort and privacy of neighbours.

Responsibility for boarding house outgoings is clarified. As landlord you would be responsible for any outgoings that arise regardless of whether the room is full or not, such as rates. You would also be responsible for any outgoings not attributable to one tenant, or used by all tenants. The tenant would be responsible for any outgoings directly linked to their use of their room, such as for an internet link.

The bill contains four situations where the landlord can end the tenancy. It can be ended immediately if the tenant threatens or causes serious damage, or danger to others. It can be ended with 48 hours' notice if the tenant is more than 10 days in arrears and has been given written warning of this by the landlord, or if the tenant is using the room for an illegal purpose, or if the tenant has abandoned the room. If repairs or reconstruction works are required, the tenancy can be ended on 14 days' notice, and the tenancy can be ended on 28 days' notice without reason. A tenant may give 48 hours' notice to terminate the tenancy.

Under the bill, ss landlord you can enter the boarding house at any time but you must give the tenant 24 hours' written notice before entering their room.

If you believe the tenancy has been abandoned, you are required to store the tenant's goods for 35 days, unless the cost of storage does not exceed the value of the goods.

Notice of 28 days is required before a rent increase. For other residential tenancies it is 60 days.

Provided the bond paid does not exceed one week's rent, the requirement to lodge the bond with the Department of Housing would not apply.

* The information contained in Commercial Property is intended to provide general information in summary form current at the time of printing. The contents do not constitute legal advice and should not be relied on as such. Specialist advice should be sought in particular matters.

Each week, national law firm Simpson Grierson answers commercial property questions which can be emailed and headed "prime asset question". This week's question is answered by senior associate Daniel Kelleher and solicitor Lydia Holt, who can be contacted at daniel.kelleher@simpsongrierson.com and lydia.holt@simpsongrierson.com