Legislation in Victoria has restrictions on who lives in granny flats, commonly called (DPU) Dependant Person Units, and who are renting them out. For example, in some council areas granny flats can only be occupied by a person who is dependent on the resident of the main dwelling – normally a family member. Once they leave it has to be removed. Some council rules state granny flats cannot be occupied or rented out privately. It is each councils responsibility to enforce these rules through the enforcement provisions of the Planning and Environment Act.
Usually, depending on which council, the occupant of the DPU has to be named at building time. A DPU has a kitchen and bathroom and usually shares its sewer and water services with the sites principle residence
Your local Council rules and regulations have to be taken into account when planning to build a DPU in the state of Victoria. Speak to both the building and planning departments and obtain something in writing before planning to build your DPU. Each department will give you all the information you require.