The new SIL practice standards – SIL & Tenancy – What do you need to know?

The new SIL Practice Standards, effective from 1 July 2026, fundamentally change how Supported Independent Living providers must manage tenancy and support arrangements.

Providers now face new requirements to separate housing from support, ensure participants can change providers without losing their home, and address complex risks around property access, liability and ongoing obligations. This alert outlines what these changes mean in practice and the key steps providers should consider now.

The Starting Position

The typical SIL operating model has a provider (Original SIL Provider) owning or leasing the home, then licensing individual rooms to participants. The Original SIL Provider delivers SIL supports in the home and bears responsibility for things like:  rates, rent, maintenance, insurance and compliance with building and safety standards etc.

To maintain registration under the new SIL Practice Standards, that provider must now ensure that tenancy and SIL support arrangements are legally separate.

This means that participants must be able to change SIL provider at any time without affecting their housing and must have access to house keys and be able to control who enters their private spaces. The Standards do not clarify whether this contemplates ‘exclusive possession’ in the property law sense, or something less.

Residual Liability of the Original SIL Provider

When a participant engages a new SIL provider (New SIL Provider), the Original SIL Provider’s liabilities do not automatically fall away:

Commercial liabilities (such as rent, property damage, and public liability) remain.

Even where the New SIL Provider delivers all SIL supports in the home, the Original SIL Provider’s may still continue to owe WHS duties to any person at the premises, including participants and workers of other providers.

Managing the Relationship with Entering Providers

Managing the entry of a New SIL Provider into a dwelling introduces additional layers of complexity for the Original SIL Provider. Beyond the ongoing commercial and statutory obligations already discussed, the practical realities of multiple providers operating within the same premises create new challenges in risk allocation and day-to-day management.

The presence of workers from different organisations, each with their own responsibilities and standards, increases the potential for disputes and complicates the process of determining liability when incidents occur. The WHS legislation further requires all duty holders to actively consult, cooperate and coordinate, making clear communication and robust contractual arrangements essential.

In the absence of prescriptive guidance in the Standards regarding multi-provider arrangements, contract remains the principal tool for managing these risks. Providers should seek legal advice on structuring agreements that clearly address property access, allocation of liability, indemnity, incident response, insurance requirements, and the delineation of responsibilities between providers (while ensuring participant choice is not unduly restricted).

The Tenancy Question

The Standards require participants to have access to house keys and control over who enters their private space. At common law, exclusive possession is the hallmark of a tenancy rather than a licence. If participants’ rights under the Standards amount to exclusive possession of their rooms, the arrangement may be a residential tenancy agreement rather than a licence to occupy.

If state or territory residential tenancy legislation applies, it brings obligations such as bond requirements, notice periods, prescribed terms and statutory dispute resolution. Most SIL providers have not incorporated these into their operating models. No jurisdiction has enacted provisions specifically for SIL accommodation. Characterisation depends on the facts of each arrangement and the relevant legislation.

There is also a commercial aspect. Most SIL providers subsidise accommodation from SIL revenue, as the room licence fee does not cover the full cost of the dwelling. If a participant changes SIL provider but remains in the home, the original provider retains property exposure without the offsetting SIL income.

Providers should consider whether their model can sustain accommodation for residents they are no longer paid to support, and whether to implement mechanisms to address this risk before it arises. This may involve restructuring pricing, reviewing licence terms and developing an exit strategy.

Providers licensing rooms should seek advice on whether their current accommodation agreements withstand scrutiny, both regarding tenancy characterisation and the commercial sustainability of holding property obligations without corresponding SIL revenue.

What To Do Now

Accommodation agreements and service agreements both need to be reviewed.

They must respond to the SIL Practice Standards, not only the tenancy separation and multi-provider issues identified above, but also the Standards’ broader requirements around conflict-of-interest management, vacancy processes, co-tenant consultation, behaviours of concern protocols and participant access to advocacy. Most existing agreements were not drafted with these obligations in mind.

For a discussion about the new SIL Practice Standards, contact Amber Crosthwaite on 0400 143 677 or amber.crosthwaite@lavan.com.au.

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.