What’s the difference between a tenant and a lodger?
Understanding the difference has a big impact on the rights of the landlord as well as the person paying for accommodation.
In an environment with extremely tight vacancy rates and a cost-of-living crisis, it’s no surprise that home owners are considering the option of sharing their dwelling to cut down on costs. Similarly, renters who have previously lived alone might be more interested in living with one or more roommates to alleviate spending pressures.
But knowing the difference between a tenant and a lodger is an important factor for both the provider of the room or dwelling, as well as the person in search of accommodation.
As the Real Estate Institute of Western Australia (REIWA) recently outlined, 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.
For example, if you own a property and a person occupies all of that property, they are a tenant and are covered under such laws as Western Australia’s Residential Tenancies Act 1987. Similarly, 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 apartments, then you are renting to a tenant.
However, if the person pays rent to stay in your house but does not have exclusive rights to the property, they are likely to be considered a lodger. In addition, there is a slight difference between a lodger and a boarder, in that a boarder also pays for meals or services (such as laundry) provided by the owner of the residence.
Boarders and lodgers are generally not covered by residential tenancy laws. This is the case in Western Australia. However, they are given rights under both common law and Australian consumer law (ACL).
So while the rules are pretty clear-cut for a landlord’s duties if they have a tenant, it might be harder for some to determine their responsibilities where they are renting to a boarder or lodger.
REIWA advised that landlords with lodgers or boarders should ensure that they:
- Provide accommodation that is in reasonable condition. A lodger or boarder should be able to expect the house to be clean and tidy and in a reasonable state of repair when they move in and while they are staying in the house, including all the rooms, common areas, facilities, furniture and equipment supplied by the property owner.
- Maintain easy access for the lodger or boarder’s room and shared spaces.
- Grant reasonable privacy, peace and quiet, and without unreasonable interference by the property owner.
- Provide reasonable security for the room and any personal belongings.
- Are clear on house rules.
- Provide a reasonable notice period to vacate.
Under Australian consumer law, a lodger or boarder can also expect that:
- Any meals or other services they pay for must be provided with reasonable care and skill, and must be reasonably fit for purpose and provided at reasonable times.
- To be provided with receipts for any services supplied over $75. A boarder or lodger can ask the property owner to itemise how charges like power and meals are calculated within 30 days of getting the original receipt.
- They have the protection of unfair contract term provisions if issued a contract that can be classed as a standard form contract.
On the other side, REIWA noted that property owners should generally be able to expect that lodgers or boarders:
- Keep spaces – particularly those that are shared – in a reasonably tidy state.
- Pay rent when it is due and in the agreed way.
- Follow house rules.
- Do not sublet their room.
- Do not use the property for any illegal purpose.
- Give the required notice when intending to vacate.
While there are no standard contracts for property owners to issue to lodgers or boarders, REIWA noted that it’s always important to get any agreements in writing, with an acknowledgement from both parties.