Qld rental reforms: bad news for tenants; a disaster for landlords
I’ll confess I really didn’t know how to start this article. The government’s proposed changes to tenancy law, the latest in the Qld rental reforms announced this week, are truly mind-blowing. And I’ll do my best to describe them without sounding melodramatic and over the top. On any measure they are a massive ‘leap to the left’ in policy making and a highly socialist view of investment. And we believe Queensland landlords will exit the market in big numbers. A shortage of rental homes, far greater scrutiny of tenant applications and increased rents are inevitable.
Tenants decide they’d like a pet? Landlords won’t be able to simply reject the request. Tenants feel they’d like a different paint colour in the property? Same deal – they can go ahead and landlords can’t unreasonably refuse. If there’s an emergency repair needed a tenant will be able to spend 4 weeks’ rent on it, double the current limit. Yes dear landlord, that’s your money. As you’ll read below there’s plenty more like these in the government’s plans.
But the most worrying change? The one that (loaded onto many erosions of their rights) will break the camel’s back for many investors? Landlords will no longer be able to ask a tenant to leave without a valid reason, effectively granting them an option to stay in your property indefinitely.
It may be your property, one you’ve saved and sacrificed to buy and hold, but you are about to lose a significant number of your fundamental rights as a property owner. Here’s some of the details and links so you can tell the government what you think:
Reform One: “Ending tenancies fairly”.
Unless a tenant commits clear breaches a landlord will have tightly limited options to ask them to leave. Your tenant can stay for life. And a reminder we’re not talking about during a fixed term lease – these reforms are about what happens after that initial 6 or 12 months.
Like your property vacant so you can decorate and prepare it for sale? Sorry – you can only ask the tenants to go after it’s actually sold (and that contract is subject to them vacating.) Would your family like to move into the home? Okay, but only if they’re immediate family (no nieces going to uni nearby) and you supply the tenant a stat dec. Need to do a significant renovation or repair? You can ask the tenants to move but only after you provide them with evidence you’ve accepted quotes for the work.
It’s an ironic name they’ve given this particular reform, given the government’s own paper says removing a landlord’s right to end a lease without grounds, “may potentially breach the fundamental legislative principle that legislation must have sufficient regard to individual’s rights and liberties”. You might find it interesting to know the government has excluded its own public housing from this reform…
Why the drastic change? The government says there is a “prevalence of retaliatory evictions“. Landlords who, for example, react to maintenance requests from tenants by booting them out. So let’s look at the stats they quote. Apparently of the 28,000 dispute resolution requests to the RTA in 2017-2018 there were 4% about ending tenancies. Tenants Queensland’s own complaint caseload had just 5% relating to terminating without grounds. And by the way, there is already provision in the current Act to stop those 4-5% of landlords allegedly doing the wrong thing.
Landlords will always want to keep a tenant if the relationship is working for both sides. The cost of changeover is high, there’s always a vacancy risk and an unknown tenant to come in. Landlords only end a tenancy if they are very unhappy and the average tenancy getting longer is a big win-win.
This reform has been in the wind for some time and you can see our readers’ comments in 2012, 2016 and again last year. One great example: “Owners should have the right not to renew a fixed term lease. At times tenants become ‘difficult’ in terms of demands or behaviour, not sufficient to create a breach but becoming awkward continuously. At that point, although the owner may lose funds in the changeover, it can be beneficial long term.” The government is about to remove a landlord’s right to choose.
REIQ’s Antonia Mercorella explains this issue in 80 seconds:
Here’s the full 171 page Regulatory Impact Statement (that’s apparently called “consultation” and the deadline is December 28th…) or just do the survey on this reform. You’ll need to create a login but it’s quick so please make the effort. Or email the Premier.
Reform Two: “Renting with pets”.
Landlords won’t be able to stop a tenant bringing in a pet unless they can argue reasonable grounds for refusing (and provide evidence to the tenant). Many of Bees Nees Realty’s landlord clients currently allow pets because they know it broadens their tenant market. They roll the dice on the risks to increase their property’s appeal. There’s no extra bond to cover any damage they cause as the government says your current 4 week’s bond is enough. (And yes we’ve seen some horror stories over the years – chewed door frames, widespread scratches to timber floors, destroyed gardens, shredded curtains and furniture). The reform would allow a limited extra bond of $250 to cover pest control only.
It’s a controversial topic. Interestingly the paper quotes a Qld Health finding that 13% of Queenslanders have an allergy and “cat allergen is known to be especially difficult to eradicate from a property… and can remain in a home for up to six months.” Isn’t this a form of damage, limiting the property’s rental appeal?
Today legislation already allows tenants and landlords to mutually agree to keeping a pet. For some reason this government thinks they need a “framework to meaningfully communicate”. Shouldn’t they be honest that it’s simply another removal of a landlord’s ownership rights?
Reform Three: “Minor modifications”.
So your tenants want different taps in the bathroom, to paint a wall, to change the light fittings or pop a satellite dish on the roof? They can give 7 days notice then go right ahead unless their landlord (you guessed it) gives reasonable grounds to refuse. And if you miss the 7 day deadline you’re deemed to agree.
The paper admits these “might create substantial damage to properties which may not be covered by bond”. Ahh, yep! And how does this work in apartments with common property not under the control of the landlord? One body corp expert’s already questioned whether tenants might be granted rights not enjoyed by owner-occupiers!
Once again, the current legislation already covers much of this: a landlord today cannot unreasonably reject requests. All this change will do is further force their hand.
Reform Four: “Minimum housing standards”.
For many years property managers, through the Real Estate Institute of Qld (REIQ) have called for specific standards in rental housing and clearer requirements for landlords. You only need to read the coronial report into Isabella Diefenbach’s tragic death to know that, even with safe homes mandated by current laws, there are gaps in the system for reporting and acting on maintenance.
But allowing a tenant to spend the equivalent of 4 week’s rent on an emergency repair does seem excessive and we’ve rarely seen a bill that could justify this change. The changes demonstrate this government really does not understand what goes on in the rental market. For example, these new standards would mandate inclusion of a cooktop and kitchen sink in every rental. We have managed several inner-city studio apartments that didn’t have either – and the affordable rent made them ideal for certain tenants.
The greatest danger in legislating minimum standards is the reduction in rental housing supply. It’s a delicate balance.
Reform Five: “Domestic and family violence (DFV) protections”.
Every Queenslander wants to see more done to help those in genuine need and anyone experiencing domestic violence has an obvious need to move home and to move quickly. The reform says an authorised professional such as a doctor or social worker would certify the situation, and the vast majority of landlords would agree with the proposal to allow these tenants to give 7 days’ notice and go. Similarly allowing an effected tenant to change the locks without waiting for landlord approval makes sense. Some of these reforms have the potential to save lives.
The changes do go further. A tenant experiencing domestic violence “would not be liable for property damage or rent arrears during the tenancy caused by acts of DFV against them”.
So what’s your opinion on the changes? We say they’re an extensive erosion of landlords’ rights and there’ll be less investment in property as a direct result. Ironically at a time this same housing minister has 22,200 applicants on his public housing waiting list, including more than 2,000 known to be at risk of domestic violence.
Do you think Queensland’s tenants should be concerned too? When supply drops rents rise. And with far tighter constraints on landlords there will be far more scrutiny of tenant applications and, regrettably, increased discrimination seems inevitable.
Please share your thoughts – and if you want the government to hear your voice you only have until December 28th to act.