The ordinary tenancy rules apply
Victoria and Queensland say directly that the ordinary rules reach a rented second home, and in NSW the general rule covers every agreement. VictoriaThe planning department says the residential tenancy requirements for a home, including room sizes, facilities and smoke alarms, apply to a small second dwelling too, along with the minimum rental standards. QueenslandThe Residential Tenancies Authority says the owner must have every approval in place before renting a secondary dwelling and must meet the smoke alarm and other health and safety rules. NSWFair Trading says every residential tenancy agreement must follow the Residential Tenancies Act 2010; residents of a boarding house under an occupancy agreement are not covered by it.
Who pays for water and power
The three states word it differently, but for water each asks the same question first: does the rented home have its own meter?
| Charge | NSW | Victoria | Queensland |
|---|---|---|---|
| Water used | The tenant can be asked to pay only if the home is separately metered (or water is delivered by vehicle), meets water efficiency measures, is charged no more than the supplier billed, and the tenant gets a copy of the bill. | With its own meter, the renter pays for water used and the sewage disposal charge, unless the owner agrees to pay. Without its own meter, the owner pays. | The tenant can be charged for all water used only if the home is individually metered (or water comes by vehicle), is water efficient, the agreement says the tenant pays, and the bill is passed on within 4 weeks. |
| Fixed water and sewerage charges | The landlord pays all water and sewerage service charges, other than usage and septic pump-outs. | The owner pays all other water supply, sewerage and drainage charges. | The owner pays all fixed charges for water supply; sewerage charges cannot be passed on. |
| Electricity and gas | Usually the tenant pays if the home is separately metered; if not, the landlord pays. | With its own meter, the renter pays supply and usage unless the owner agrees to pay; without one, the owner pays. | For a secondary dwelling, the agreement must say how utilities, including gas and electricity, and water are to be paid. |
What counts as a separate meter in NSW
Fair Trading’s test has several parts. The meter measures only what is supplied to or used at the rented home, is installed as the manufacturer or industry practice specifies, lets the supplier send a separate bill, and has an identifying number: a National Meter Identifier for electricity, or a Meter Installation Reference Number or Delivery Point Identifier for gas. A meter the owner reads to divide one bill between the house and the flat does not let the supplier send a separate bill, which is one part of that test; Fair Trading is the place to check a particular set-up.
The NSW Government advises writing the water meter reading on the condition report when each tenancy begins and again when it ends, so a tenant does not pay for another tenant’s water.
Smoke alarms before the first tenant
NSWThe landlord must make sure smoke alarms work and must have at least one in a hallway outside a bedroom, or another suitable spot, on each storey. The landlord checks them every year, changes removable batteries every year (lithium batteries as the maker specifies), replaces alarms within 10 years of manufacture, and uses a licensed electrician for hard-wired ones.
VictoriaThe owner must make sure every alarm is correctly installed and working and is tested at least once every 12 months. On or before the start of the agreement, the renter must be told in writing how each alarm works, how to test it, and that they must not tamper with it and must report a fault. A broken alarm is an urgent repair.
QueenslandTurning a home into a rental is one of the triggers for replacing older smoke alarms with interconnected ones, and every existing private home, townhouse and unit needs them by 1 January 2027. That date is close; check the Queensland Government’s smoke alarm page for what it means for a particular home.
The building rules stop covers the alarms a new granny flat needs when it is built.
Living next door to your tenant
A granny flat puts the owner a few steps from the tenant’s front door, which makes the entry rules easy to forget. NSWFair Trading says tenants have the right to reasonable peace, comfort and privacy, and that a landlord or agent usually needs to give correct notice before coming in, apart from some specific situations.
The shared parts of the lot are worth settling in writing. VictoriaThere are no fencing requirements between the main home and a small second dwelling, so the backyard can be fenced or shared. QueenslandThe Residential Tenancies Authority suggests special terms for a secondary dwelling, such as arrangements for parking spaces and internet charges; its secondary dwellings page has the full list.
Rental income has tax consequences too; the Australian Taxation Office’s rental income page is the place to start.
The other stops
Five more places on the same lot: