How do I set up a tenancy for multiple students?

Question from Hamish updated on 2nd August 2010:

I have a large 5 bedroom villa and was considering renting four of the rooms out. If I was to have international students stay for three month or longer slots would this be classed as a boarding house? I would be providing all bedding and fully furnished house. If so what sort of implications would it have for me. eg tenancy agreement, insurance, tax etc.

Our expert Jeff Montgomery responded:

The Residential Tenancies Act 1986 (the Act) applies to residential tenancies. However, it does not cover certain situations including:

• where the premises are used during the tenancy principally as a place of residence by the landlord (or member of the landlord’s family)
• where the premises constitute part of any hotel, motel, boardinghouse, or lodginghouse for temporary or transient accommodation
• where the premises are part of any hostel, dormitory, or other similar type of premises for students.

If the parties are unsure if their tenancy is covered under the Act or not they can apply to the Tenancy Tribunal to have this determined. Even if a residential tenancy is excluded from the Act, both parties can agree that the Act (or certain parts of the Act) applies. Where both parties agree that certain parts of the Act will apply to their situation (e.g. both parties agree to contract back into the Act), the details of that agreement should be clearly recorded on the tenancy agreement. I would recommend you contact your local community law centre for further advice if you are considering contracting back into the Act.

You may also want to discuss insurance options directly with your insurer, and I would suggest contacting Inland Revenue (IRD) to discuss any tax matters. Their contact details are www.ird.govt.nz or 0800 227 774. To discuss your situation further, or for advice and information about excluded tenancies, you can contact the Department of Building and Housing on 0800 TENANCY (0800 836 262).

The Department of Building and Housing provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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