Granny flat arrangements are becoming increasingly popular as a solution providing accommodation for older Australians. However, if the parties involved fail to properly document the terms of the arrangement then complex legal and other issues can arise.
Granny flat arrangements can take many forms including:
* a self-contained dwelling built as a secondary dwelling alongside a larger residence;
* a self-contained unit inside someone else’s house; or
* a bedroom in someone else’s house.
If the arrangement is not properly documented at the outset, the terms of the arrangement may become unclear as the parties’ recollections diverge. A Court may need to to determine the outcome of any oral arrangement and the proceedings are likely to be complicated, costly and lengthy.
Any written agreement concerning a granny flat arrangement should deal with various issues including:
(a) the nature of the accommodation i.e. separate dwelling or part of existing residence;
(b) if construction or renovation is required, the costs and who is to pay for it;
(c) any special requirements e.g. location or ease of access;
(d) whether the occupant is to make contributions towards maintenance;
(e) responsibility for utility bills and insurance; and
(f) circumstances when the arrangement comes to end or a party can terminate the agreement.
Of course, in such a situation each party should have their own independent legal representation.
March 2024