Granny flat let?

Question from John updated on 8th March 2014:

Some years ago I created a granny flat for my mother under our house in Wellington. The flat has a separate electricity meter, kitchen, laundry, shower and hot water cylinder. The flat is connected to the top part of house by internal stairs which has a lockable solid core door at the top. The flat also has separate external entry and its own washing line. Apart from the interconnecting stairs it's essentially a self contained flat. Mum has now passed away and we want to let the flat. Someone advised us we couldn't do this unless it was let to a family member? Is there any related family member rule in New Zealand that applies to letting granny flats or can we let the flat to anyone ?

Our expert Alan Bruce responded:

There is no general law in New Zealand that restricts who you can rent your property to. The Ministry of Business, Innovation & Employment (the Ministry) provides advice on the Residential Tenancies Act 1986 (the Act) and the relationship between landlords and tenants. The Act applies in respect of all residential tenancies, with the exception of specific situations that are excluded under the Act. If you decide to become a landlord, it is important that you are aware of your obligations under the Act. Information about a landlord and tenant’s rights and obligations can be found by visiting our website at: http://www.dbh.govt.nz/tenancy-index. A landlord’s obligations include providing and maintaining locks to ensure the premises are secure and ensuring that the premises comply with all the relevant health, safety and building regulations that apply to that particular premises. This includes ensuring that the tenant is able to lock their premises to ensure it is reasonably secure and all of the applicable regulations are complied with. If you do decide to rent to a family member, or if your situation becomes more like a flatting arrangement, you may be excluded under the Act. The types of tenancies that are excluded under the Act (and therefore the Act does not apply to) can be viewed at: http://www.legislation.govt.nz/act/public/1986/0120/latest/DLM95000.html. Where a residential arrangement does not fall within the jurisdiction of the Act, parties can agree that the Act (in whole or in part) will apply to their situation. Any such agreement should be clearly recorded in writing, preferably on the tenancy agreement. If you would like to discuss your situation further, or for information about landlord and tenant rights and obligations, you can visit the Ministry’s website (as noted above), or call 0800 TENANCY (0800 836 262).

The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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