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Is your rental property an unlawful dwelling?

By Donna Jones

Unlawful dwellings are a very serious issue for both landlords and tenants — landlords can face serious fines and loss of rental income, while tenants may be living in an unsafe environment.

What is an unlawful dwelling?

Commonly, unlawful dwellings are secondary dwellings within a residential property that were built with another purpose in mind, like garages, sleep outs, commercial buildings, etc. As such, they don’t meet the health and safety standards required to be used as a rental property.

How can you tell if your rental property is a lawful dwelling?

The minute a residential tenancy agreement is in place, the landlord’s lawful dwelling requirements come into place, and since the Residential Tenancies Amendment Act 2019 came into effect the consequences of tenanting an unlawful dwelling have been much stricter for landlords.

  • If a rental dwelling has a building consent or permit it is likely a lawful dwelling.
  • If any additional work has been carried out on the dwelling, this will likely need building consent or a Certificate of Acceptance (COA) to maintain lawful dwelling status.
  • Where alterations have changed the layout of a dwelling or its intended use has changed, these changes will require consent and approval for intended use for the dwelling to be lawful. An example of this is when a sleepout is converted to a self-contained dwelling and tenanted.
  • If there are more than one dwelling on a property, there must be written local Council consent to hold two (or more) dwellings on the title. There must be proof the Council has approved each dwelling to be tenanted separately from the other(s).

Signs of an unlawful dwelling

At a glance signs of potentially unlawful dwellings that tenants should keep in mind when viewing rental properties include:

  • Multiple stand-alone dwellings on a single section.
  • The rental dwelling hasn’t always been used for this purpose.
  • The dwelling doesn’t have its own legal address, rubbish bin, letterbox, etc.
  • Alterations have obviously been made within the main dwelling structure.

What are the risks of renting an unlawful dwelling?

When unlawful dwelling cases go to the Tenancy Tribunal, an individual adjudicator is sometimes called upon to determine the level of unlawfulness of the dwelling and resulting level of offence by the landlord.

If the rental was an unlawful and unsafe dwelling, the landlord’s offence is deemed intentional and reckless. If the dwelling was safe but unlawful because it failed to meet all the right requirements, the landlord’s offence is deemed careless.

Landlords can be forced to pay up to $5,000 in damages directly to the tenant, and in extreme cases, repay the tenant all the rent they paid for the whole duration of the tenancy.

Tenants’ rights under the Residential Tenancies Amendment Act 2019

When the Residential Tenancies Amendment Act 2019 was passed, new legislation gave tenants a lot more rights and the potential for lost rental earnings for landlords renting unlawful dwellings became much higher.

Key outcomes of the new legislation include:

  • Tenants of unlawful dwellings can terminate their tenancy with just two days’ notice.
  • If a tenant living in an unlawful premises owes rent arrears, the Tenancy Tribunal will not order them to pay the amount back.
  • The Tenancy Tribunal may order the landlord to:
    • Reimburse their tenant for some of the rent.
    • Reimburse their tenant for all the rent they’ve ever paid during the tenancy.
    • Carry out work at the property to make it lawful.
    • Terminate the tenancy with no consequence for the tenant.

Still unsure about unlawful dwellings?

Get in touch with us to learn more about unlawful dwellings. We can help you decipher whether your dwelling is lawful or not and help determine your next steps. Don’t bury your head in the sand!


The Hand Of Justice’ by Jo Zimny Photos via CC BY-NC-ND 2.0.

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