Our Experts Answer:
It is possible to rent a sleep out separately from a house. However, as a landlord you do have a responsibility under the Residential Tenancies Act 1986 to comply with all requirements in respect of building; health and safety under any enactment so far as they apply to the premises. It would pay to check with your local Territorial Authority (Council) to confirm that the sleep out you are intending on renting out is suitable for dwelling purposes separate from the house. Particularly as you have not advised if the sleep out has its own kitchen facilities.
As with any situations, renting out a sleep out separately than a house has its own advantages and disadvantages. Whilst you may be able to obtain a greater rent from renting them out separately as a landlord you also have the responsibility to take all reasonable steps to ensure that none of the landlord’s other tenants cause or permits any interference with the reasonable peace, comfort, or privacy of the tenant in the use of the premises. Having two separate tenancies on the same property is a decision that should never be entered into lightly as; if there are any disputes between your two sets of tenants you could be put into the position where you need to resolve any issues. For information and resources about setting up tenancies visit the tenancy section of www.dbh.govt.nz.
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.