Tiny house, big problems - Legal hurdles for tiny houses in the ACT
The tiny house movement is a social phenomenon advocating living in so called ‘tiny houses’, commonly defined as detached, usually wheeled, dwellings under 40m2 in area. Tiny houses are becoming increasingly popular in Australia, however potential buyers or builders in the ACT should exercise caution.
Housing affordability is a major driver of the popularity of tiny houses in Australia. Fans of tiny houses often attribute their appeal to a desire to own a home without the mortgage stress of a larger building, as well as a desire for greater environmental sustainability and more conscious consumption. Although tiny houses can be permanent structures, mobile tiny houses mounted on trailers are far more popular, in part because this separates ownership of the house from the expense of the land it stands on, and in part as an attempt to escape local building codes by being regulated as caravans instead.
Housing development in the ACT is regulated by legislation, such as the Planning and Development Act 2007 (ACT), and the Crown Leasehold system. The Territory government owns most residential land in the ACT and leases it to the public under a Crown Lease, typically for a period of 99 years and subject to certain conditions. Common conditions (although not exclusive) for residential land include requirements to build a dwelling, sometimes of a certain size or value, within a set period of time (typically 24-36 months).
Mobile homes used for long term habitation are categorised as buildings under s.7 of the Building Act 2004 (ACT) and therefore might be able to satisfy the development covenants in a Crown Lease. However, the tiny house in this situation would need to satisfy any requirements as to size or value in the Crown Lease, as well as comply with planning and building regulations. This could also raise ownership issues if the tiny house and the land belonged to different people, since property law typically treats structures on land as ‘fixtures’ belonging to the landowner. Therefore, tiny houses may work best as standalone dwellings on land when the tiny house owner also owns the land.
Another way ACT law may accommodate tiny houses is as ‘secondary residences’, familiar to Australians as ‘granny flats’. In addition to the Crown Lease and planning and building regulations, secondary residences must comply with specific requirements under the Residential Zones Development Code and the Single Dwelling Housing Development Code. These include meeting accessibility standards and being no smaller than 40m2, hardly ‘tiny’ by the standards of the tiny house movement. As for ownership, secondary residences must be built in association with a primary residence and can’t be subdivided or sold separately. As a result, tiny houses may work best as secondary residences when there is a family relationship between the landowner and tiny house owner, such as a child saving up to purchase their own home or an elderly parent wanting to retain some independence.
For those looking to lease land on which to park their tiny house, the situation may be more difficult. Section 309 of the Planning and Development Act 2007 (ACT) states that a parcel of land may be sublet separately from the remainder of the land for the purpose of siting a mobile home but only if the Crown Lease for the land authorises the land to be used as a mobile home park. This essentially limits the tiny house owner to a few caravan parks.
Although sometimes touted as a potential solution to Australia’s housing affordability crisis, tiny houses remain a niche market. Part of the reason for this may be the incompatibility of the tiny house model imported from the United States with Australian laws and regulations. Legislation and the requirements of Crown Leases mean that the construction or siting of tiny houses in the ACT can be complicated.
Anyone interested in buying or building a tiny house should seek legal advice to ensure that their tiny house dream does not lead to headaches later.
If you are interested in buying a tiny house, or have any questions about them, please contact us.