At our firm, we regularly assist clients with preparing granny flat occupation agreements that clearly set out the terms under which a parent or other family member may reside in a secondary dwelling—commonly known as a granny flat.
These agreements are important for protecting the interests of all parties and preventing future disputes. They can also have legal and financial implications, particularly in relation to property rights, aged care, pensions, and family expectations.
Why This Matters
A properly prepared flat agreement can:
- avoid family misunderstandings or future legal disputes
- protect financial contributions made toward construction or improvements
- provide clarity on day-to-day arrangements
- Help demonstrate compliance with Centrelink or aged care rules
- Clarify what happens if circumstances change
Key Considerations – Centrelink benefits
It is also common for families to restructure ownership of an older person’s home for succession planning – for example, a parent transfers legal title to an adult child but keeps a lifetime right to live here under a granny flat agreement. A common question then arises:
Will Centrelink treat the parent as a homeowner, and will the ‘granny flat interest’ be counted as an asset for the Age Pension assets test?
See this website for more information on granny flat interests and how they might affect you or your relatives: https://www.servicesaustralia.gov.au/granny-flat-interest?context=22526 or contact our office for assistance.
What We Need from You
To prepare a clear, tailored agreement, we ask that you provide us with the following:
- Full names and address of the property owners
- Full name and current address of the intended occupant
- E-mail address
- Contact Phone Number
We will also need more information about the terms of the arrangement, including:
- When will the agreement begin, or has it already started?
- Who will be allowed to occupy the granny flat? Will guests or pets be permitted?
- Who will be responsible for the maintenance, upkeep, and minor repairs?
- What access will there be to shared areas (e.g. gardens, driveways)?
- How will insurance be handled – by the owner, occupant or both?
- Is the granny flat already built, or is the occupant contributing financially to its construction?
- What happens if the intended occupant needs to enter aged care in the future?
- Will either party have the right to end the arrangement, either for breach or any reason?
- Will this affect any pension or Centrelink benefits?
- What other needs, concerns, or expectations do you or your family have that should be documented?
Once we have this information, we can provide you with an estimate of our professional fees for drafting a suitable agreement.
If you would like assistance preparing a granny flat agreement, please don’t hesitate to contact us.