Mind your Power: Sharing Utilities in Granny Flats


by Peter Foster, Tenants’ Union Solicitor


Have you found a beautiful little flat, in a nice neighborhood, with easy-going landlords that live in the main house and have offered to share their power connection with you?

Don’t do it. That is the simplest advice I can give to people considering renting a premises with a power supply, hot water service or water tank that is shared with the owner or other tenants. This is because it creates issues around ‘fairness’ and more importantly, is unlawful under the Act (more about that later).

There have been an increasing number of complaints regarding utility charges from tenants who live on the same property as the owner. Most commonly, these tenants live in granny flats, which are self-contained units on the same property as the main house occupied by other residents.

Most granny flats are fine. It’s when the flat uses the same power meter as the main house that problems can occur. This is because the power bill generally does not identify how much power was consumed by each dwelling separately. Therefore, disputes over the amount that each party should pay towards electricity may arise.

Some owners will insert clauses into leases that seem like a fair compromise. For example, that each household pays half of the power bill. But is going halves just when only two tenants live in the flat while the owner, her husband and three children reside in the adjacent house? It would be reasonable to assume the owner and her family will be consuming more electricity.

A per head pay share, in which the tenant would be liable for two-seventh of the power bill, while the owner is paying for the remaining five-seventh may solve this conflict, but potentially creates new imbalances based on lifestyle and how much they are at home amongst others.

The examples highlighted above demonstrate the difficulties of assessing ‘fairness’ when it comes to sharing a power bill. However the Act clearly provides, that any agreement in which the tenant is required to assist with electricity costs is unlawful under the Act. A landlord/agent can only charge for rent, damage and the usage costs of a water bill during the lease agreement. All other charges, including electricity costs cannot be collected by the landlord/agent  under the Act.

The best way to avoid these types of disputes is to have a meter installed. A meter ensures that only the electricity used at the flat is metered, thus allowing for a tenant to be sure that the amount they are paying, directly to the electricity provider, is for the electricity consumed by them. But note that an owner has no legal obligation to install a meter.