If you find yourself in a situation where, for example, your local council suspects that the property you are living in (or own) is being used as a rooming house instead of a residential lease, there can be some serious implications.
As highlighted below, the distinction between a rooming house and a residential lease is not always clear.
The political situation
There is a constant battle between levels of government as regards such issues. Federal and State governments are concerned with the shortage of housing within the community. As such, planning schemes are being weakened to allow higher density living and, as such, rooming houses are, quite often, very much in favour. This is most evident around universities and in rural areas where accommodation is needed for fruit pickers etc.
Councils, however, are often driven by ratepayer complaints of overcrowding, noise, rubbish collection and, especially, parking often comes from a different position.
Differentiating a rooming house and a residential lease is very much a grey area and the legislation and regulations are rather unclear.
Rooming house definition
A rooming house is a building where one or more rooms are available to rent and four or more people in total occupy those rooms. Traits of a rooming house may include the following:
a large number of residents using the building
locks or numbers on bedroom doors
high levels of rubbish and recyclables
multiple vehicles parked on or off the street
lots of mail addressed to different people
multiple individual toiletries stored in bedrooms rather than bathroom
lessee not living on site
minimal communal area
cooking appliances and fridges in bedrooms
televisions, kettles, games consoles in bedrooms but not in communal areas
house rules
gardening and maintenance issues
Issues with the law
The issue of rooming houses is confronted by the law in three major areas:
Planning
Building
Registration
Each area has developed independently of the other and, as such, the problem of establishing clear guidelines and unambiguous definitions is amplified. In short, there is little consistency. State government-administered planning schemes have become increasingly sympathetic (as state governments seek to alleviate a state and national housing shortage). Ratepayer driver councils, on the other hand, fed up with overcrowding and resident complaints, tend to be increasingly unsympathetic.
Residential lease (with multiple tenants co-renting)
Co-renting is when several people rent a property together, such as in a share house. Each co-renter signs the rental agreement and all co-renters are jointly responsible for paying rent and taking care of the property.
When someone co-rents, they can be held responsible for the actions of the other co-renters who are listed on the rental agreement. This means they can be asked to pay co-renter's unpaid rent or pay to fix damage caused even after the culprit has moved out. This is a simple extension of the principle of joint and several liability. If two people jointly borrow $1m from the bank, the bank can sue either for the full $1m. The bank is not compelled to limit its chase to $1/2m each.
When someone moves out, the tenant must get the rental provider’s consent before someone else moves in. It is important to transfer the rental agreement so that all the co-renters are listed on the agreement.
Operating a Registered Rooming House
Before you commence operating a rooming house, it is essential to ensure that you:
Obtain a licence from the Business Licensing Authority (and pay their fees)
Install fire safety equipment, lighting and signage
Residents have sufficient space
You have a register to record all past and current residents
You keep thorough records of all safety, health and hygiene maintenance.
Unregistered rooming house
An unregistered rooming house is a building that is being used as a rooming house but is not registered in accordance with Division 4 of Part 6 of the Public Health and Wellbeing Act 2008 as prescribed accommodation within the meaning of that Act.
Prescribed Premises are defined as:
(b) any premises used as a place of abode, whether temporary or permanent, fixed or mobile, where a person or persons can be accommodated on payment of consideration;
Section 67 of the Public Health and Wellbeing Act 2008 provides that it is an offence for the proprietor of prescribed accommodation within the meaning of that Act not to register that accommodation with the council if it is, in fact, being used as a rooming house.
Section 142D of the Residential Tenancies Act 1997 imposes an obligation on an owner of a building (or that owner’s agent), to notify the relevant local council if they have reason to believe that:
a) the building is being used as a rooming house, and
b) the building is not registered with the local council as prescribed accommodation under the Public Health and Wellbeing Act 2008.
The obligation to notify arises when the owner (or agent) forms “reason” to believe. The reason to believe may be based on:
a) supporting evidence uncovered during an inspection of the building or otherwise in the ordinary course of an owner or agent's duties, or
b) information from:
neighbours
current or past residents of the building
community legal centres or tenancy advocacy services, or
other bodies such as Consumer Affairs Victoria, other government agencies or local councils.
In the event that Council deems the property to be a rooming house, this could potentially expose the registered proprietor of the property to an offence for not registering that accommodation with the council. They could be liable for up to 60 penalty units (approximately $11,094.00).
In summary
Our office can assist in registering room house agreements or, alternatively, contesting any notice issued by the Council on the grounds that a residential lease is on foot. If you think we can assist, please contact us on 03 9450 9400 to make an appointment for a consultation.