"If you are considering renting out part of your home, it is important to understand the circumstances to determine whether a tenancy agreement or a boarding/lodging agreement applies."
With many people struggling to find a home amid tight rental supply, some are looking to boarding and lodging which is becoming more common as property owners seek to cover rising bills and interest rates.
If you are considering renting out part of your home, it is important to understand the circumstances to determine whether a tenancy agreement or a boarding/lodging agreement applies.
REIWA have compiled a guide on the difference between these types of agreements and the roles and responsibilities of both parties.
A tenant is classified as a person who pays rent and is granted the right to occupy all or part of a residential premises, with an independent existence from the property owner with no services provided.
If you are renting out a granny flat with its own entrance or have a dual-key home that can be separated into self-contained residences, then you will be renting to a tenant.
If the person pays rent to stay in your house but does not have exclusive rights to the property (ie. they cannot say it is their property), they are likely to be considered a lodger. If meals or services (ie. laundry) are also provided, they are most likely a boarder.
While a tenant is covered by the Residential Tenancies Act 1987 (WA), boarders and lodgers are not. However, they are given rights under both common law and Australian Consumer Law (ACL).
A boarder and lodger’s rights will depend on the contract you have with them.
As the property owner, you must ensure that you take reasonable steps to avoid causing loss or damage to the boarder/lodger and their property. This includes giving personal belongings back if they leave them behind.
A boarder/lodger has the basic right to expect the following:
A boarder or lodger also has various rights under ACL:
This depends on what has been agreed with the property owner. Generally, they will be responsible for:
Formal tenancy agreements provide a structured framework with legal protections, ensuring stability, predictable rent, and clear dispute resolution mechanisms.
Boarder/lodging agreements may offer flexibility and simplicity, making them suitable for short-term arrangements, but they lack the comprehensive legal protections provided by formal tenancy agreements.
Which agreement you use depends on whether the person qualifies as a tenant or a boarder/lodger.
Whatever arrangement you have, you should put your agreement in writing to protect all parties. While there is a prescribed lease agreement for tenants, there is no standard form for boarders and lodgers. You may be able to find examples on the internet or will have to create your own.
If you have a problem with your boarding or lodging arrangement, you should always check the terms of your agreement and try to sort it out by discussing it in person.
Alternatively, you can contact Consumer Protection on 1300 304 054 or [email protected] for advice and information.