Ask Margaret: Can my landlord make me pay the rates for my residential unit?

Hi Margaret,

I have an interesting issue relating to a property my wife and I are renting. The property is in fact two separate units: the down stairs is a commercial premises where my wife runs her hair salon while upstairs is a separate residential unit. We live upstairs and pay separate rent on a separate lease for this property.

This is where it gets murky. The landlord is demanding my wife pay the full rates for the premises. As I understand it, my wife is responsible for the rates on the commercial premises below, but not the residential domicile above. The landlord refuses to get the property registered as two separate units and as such is demanding we pay all the rates.

The entire building is on one single water system, making calculation of bills nigh on impossible as well but interestingly upstairs has a separate electricity and gas supply to downstairs. Surely this would be indicative of a separate property.

The landlord is a solicitor and is using a bullying and brutish attitude to try and brow beat us into submission. Her attitude it would seem is that because neither of us has the legal acumen to rebuke her demands she can just steamroller over us. I'm hoping you can point me in the direction of the relevant legal statutes that would help us fight our corner.

Read Margaret Lomas' answer on the next page.

I have taken a while to do some research for this question, including seeking some advice from my friend Rob Balanda, who is a QLD property lawyer.

You say that:

"The property is in fact two separate units: the down stairs is a commercial premises where my wife runs her hair salon while upstairs is a separate residential unit. We live upstairs and pay separate rent on a separate lease for this property."

This means that you have two leases in place – a commercial lease for the hair salon, and a residential lease for the unit above, in which you reside.

While it is important to point out that each state has its own Tenancy Act, they do share some commonalities and these commonalities most likely relate to your current problem.

Generally speaking, a commercial lease requires that the tenant pays all outgoings, including council rates, which is currently occurring for you.

Again generally speaking, a residential lease requires that the landlord pay all council rates, and not the tenant.

When it comes to the water rates and usage, a commercial lease requires the tenant to pay both, but in a residential lease the landlord must pay the water rates while the tenant pays the usage.  Note that the way usage is dealt with is different in each state, so you should check with your Department of Fair Trading to see how they are dealt with in your state.

As your water usage is shared and not seperately metered, things are a little tricky.  In QLD, this is what the Tenancy Act has to say:

Residential Lease

If the residence is not individually metered, the tenant can be made to pay water consumption charges for the premises only if:

(a)  the tenant is enjoying or sharing the benefit of a water service to the premises; and
(b)  the premises are individually metered for the supply of water or water is supplied to the premises by delivery by means of a vehicle; and
(c)  the agreement states that an amount for the water consumption charges for the premises is payable by the tenant.

However, the full cost can only be passed on to the tenant if the premises are "water efficient" - this being where the premises complies with water efficiency requirements under regulation.

In your case this is going to be difficult, as you won't be able to determine which portion of the usage is for upstairs, but it could be a moot point anyway if you live in a state where all usage is the responsibility of the tenant.  The landlord does, however, have to pay the water rates on the residential part of this property, and could be asked to determine a fair way to separate these out so you, the residential tenant, do not pay.

Note that it is not the zoning which determines the treatment, it is the basis for the lease.  Therefore, the fact that your home is not a separate unit matters little if you have signed a residential lease.

You should contact your state Department of Fair Trading and seek some advice about this.  In my experience they are very helpful and they will be able to act for you to establish a fairer system with this difficult landlord. As a lawyer you would expect her to know the law, but this is not always the case.