Boarding House Division

New Boarding House requirement

Boarding house operators will need to register with NSW Fair Trading by 30 June 2013 under the new Boarding Houses Act 2012.

Boarding houses provide accommodation for a fee. Boarding house residents are, however, different from tenants as they do not have the control over the premises that a tenant has, and usually they do not have a right to occupy the whole of the premises.

See www.fairtrading.nsw.gov.au for more details.

What is a Boarding House? How are they different to Residential Tenancies

Boarding Houses: Managed & Community Premises with non exclusive usage.

Boarding houses provide managed accommodation with non-exclusive occupation of a premise to boarders/lodgers/residents. The legal responsibility of the owners of boarding houses, is to provide accommodation and living services which ensure the welfare of the whole property meeting statutory requirements.

Residential Rental Properties: Individual self-managed, non community Premises with exclusive usage.

Residential rental properties are a type of accommodation where the tenants have exclusive control over a designated area. The legal responsibility of the owner is to provide an exclusive private space to a tenant and meet statutory requirements.

What are 'Boarding Houses'?

'Boarding houses' are as varied as the management and the specific area and community they cater for. Occupants enter a managed premise and are part of a community where individuals have no exclusive control over any specific area.

Although boarding houses cover less than 3% of the accommodation market, they meet the accommodation needs of a diverse groups of residents requiring low to moderate cost accommodation ranging from students, guest house residents, single people, older men, lodgers who seek onsite management services, contract workers, those who want a community, those requiring flexibility.

It is a unique form of accommodation, usually managed by an owner and his/her family. Despite low returns, the hands-on nature of the management and the unique history of each accommodation premise, owners work towards maintaining this style of low cost to moderate cost boarding houses.

Threats to Boarding House existence

Today boarding houses are financially precarious with:

  • high insurance costs
  • increasing fire safety upgrades and fire compliance costs
  • council inspections
  • council requirements and environmental planning policies compliance
  • upgrades to meet modern standards
  • commercial water rates, garbage charges and electricity
  • management costs
  • competition with the unregulated 'share' accommodation or quasi boarding house providers who do not have expense or workload of the onerous financial and government controls in the areas of fire, health, council registration and statutory requirements that apply to boarding houses
  • positioned in generally high value locations with increasing pressures by developers to sell
  • rent control and length of stay conditions for those who apply for land tax exemption
  • low returns

Why do residents chose to live in Boarding Houses?

Boarding houses are different to residential tenancies. They are NOT individual accommodations within a block of units. They are managed premises where residents reside within one property. Living is often shared, with communal facilities, with people expecting the owner/manager to resolve problems and ensure the harmony of the community within the boarding house. The accommodation is furnished with residents expecting assistance when needed. For example elderly residents seek management to assist with changing a light bulb and such domestic needs. If there is a disagreement between residents, the Manager resolves it to keep peace and quiet.

Residents chose to reside in their boarding house of choice. They can enter with a nominal deposit on a low to moderate weekly tariff. They have furnishings provided and some services such as cleaning common facilities. They enjoy their independence, yet have the benefits of management and community. They come and go as they please, without a lease commitment.

Samples of types of 'boarding houses:

  • short term lodgings (such as Bondi Beach and Manly guesthouses)
  • student hostel (such as Unilodge)
  • lodgings houses catering for long term hospital outpatients (around St Vincent's hospital)
  • mixed resident long to short term accommodation in private hotels (inner city locations)
  • temporary contract workers on leave (in North Sydney and Kirrabilli)
  • guest houses and private hotels
  • licensed boarding houses (Licensed Residential Centre LRC) which operate under a 'support and care' based occupancy with rigorous government compliance regulations. *(See below)

Why do Boarding House residents NOT go into residential tenancies?

Residential tenancies mean:

  • 4 to 6 week bond
  • Rent in advance
  • Usually not furnished
  • Lease commitments
  • Responsibility for services such as water usage and electricity
  • Tenancy checks which may act as a barrier to gaining a rental premise
  • No management
  • No community
  • Boarding houses mean:-
  • Management
  • 1-3 week deposit
  • 1 week tariff in advance
  • Furniture & fittings
  • Flexible entry into accommodation
  • Flexibility of stay
  • House Rules
  • Management
  • Assistance
  • Good locations
  • Community

When a new occupant enters a community, the onus is on the new occupant to live within that boarding house. The primary right is the community with the boarding house not the individual. For occupants who require exclusive residential accommodation, then there is the residential rental market available.

Not-For-Profit (NFP) Boarding Houses

NFP 'boarding houses' provide for a small marginal group within the boarding house communities. These NFP boarding houses are given financial benefits:

  • exemptions on commercial charges
  • substantial government subsidies

NFP operators are not suitable for traditional boarders and lodgers who:

  • seek a unique accommodation service that meets their needs
  • want to operate freely and independently
  • do not want a 'care' organization as their accommodation provider

Impact of legislation on Boarding Houses

The impact of legislation on an already marginal accommodation business threatens the existence of boarding houses and will be detrimental to residents, as evidenced in Victoria. In Victoria where legislation has been introduced, privately run boarding houses have all but disappeared, adding financial burdens to the State while depriving residents of their right to chose to live in boarding houses and depriving the State of a vibrant and unique form of accommodation service.

The Minister of Fair Trading Reba Meagher in 2004 undertook serious investigation of the proposal to introduce legislation protection of boarders and lodgers in NSW. The Minister and The Lord Mayor of Sydney Clover Moore visited boarding and lodgings houses, spoke to boarders and lodgers and owners.

The Minister's findings were:

  • 'Having personally visited a number of boarding houses, I am aware of the industry and tenancy issues associated with their operation. However following careful consideration of the issues, concerns remain that any specific regulation in this sector may in fact backfire and hurt the people it is intended to help.'
  • Boarding house owners have a commitment to their accommodation business which provides a valuable alternative to residential tenancies. It is a vulnerable, non-growth area providing invaluable accommodation services to lodgers and boarders. Where legislation is introduced which changes the nature of boarding houses, they will cease to exist, causing hardship to residents, not protection.

Licensed Residential Centres

Licenced Residential Care(LRC) Facilities have two or more residents with disabilities that require supervision and rehabilitation. The operation of these facilities is based on 'support and care' with management control essential to the successful operation of that community.

Licenced Residential Care facilities are unfunded. They have rigorous compliance requirements as determined by:

  • The NSW Health Department
  • Department of Aging and Disability

The NSW Residential Care Association states that legislation for individual rights of residents will make the LRC's inoperable and lead to their closure.

ADHC Fact Sheet

Download the fact sheet with Information for operators of boarding houses who may house 'people with additional needs'.