Since October 2021, the Queensland Government has enacted a series of changes to rental laws, sparking a mix of praise and concern among stakeholders. While several of these reforms are undoubtedly commendable, certain new regulations have raised questions about their potential to inflict unintended harm. Striking a delicate balance between the interests and pressures of both tenants and landlords is crucial to ensuring these changes translate into practical, beneficial outcomes for all parties involved.
Queensland Rental Reforms: The Good
The Housing Legislation Amendment Bill 2021 has ushered in positive changes for tenants and landlords alike. These reforms prioritise tenant rights and housing standards, aiming to create a fairer and safer rental market.
Protecting Victims of Domestic Violence
Notably, provisions have been introduced to protect victims of domestic violence, allowing them to terminate leases swiftly with minimal financial burden.
This significant step, enacted under the Residential Tenancies and Rooming Accommodation Act 2008, offers crucial support and safety to vulnerable individuals. Landlords should familiarise themselves with the key provisions in the Act that deal with domestic violence.
Dealing with Pets in Properties
Additionally, landlords must now consider tenants’ requests for pets reasonably, as per Section 184, enhancing housing accessibility for pet owners. Tenants are required to seek the lessor’s consent to keep a pet at the rental property, and it is a significant breach not to do so.
Many tenants have or want pets and equally, many property managers and landlords don’t want to deal with the potential issues pets can cause. The new legislation effectively eliminates a property owner’s right to have a ‘no pets’ policy. However, pet damage has been excluded from the definition of fair wear and tear. This means property owners will be able to seek compensation for damage that’s caused by pets. Lessors can provide approval for pets subject to reasonable conditions as agreed with the tenant, or refuse the request only based on specific reasons under the legislation.
Minimum Housing Standards
Furthermore, minimum housing standards, effective from 1 September 2023, ensure rental properties meet essential safety and habitability criteria, safeguarding tenant well-being.
Queensland Rental Reforms: The Bad
Despite the positive strides, some aspects of the reforms present challenges for landlords.
Unbalanced Treatment of Periodic Tenancies
The restriction on terminating periodic tenancies, effective from 1 October 2022, limits landlords’ flexibility in managing their properties. With tenants retaining the right to end periodic tenancies at any time, landlords face constraints in adapting to changing market conditions and changes in their own personal circumstances.
Impractical Bond Claim Practices
Moreover, the requirement for landlords to substantiate bond claims within strict timeframes, as mandated by Part 3 of the Act, poses logistical challenges. While prompt bond returns are essential, the practicality of meeting these deadlines, especially in sourcing tradespersons or contractors for repairs, remains uncertain.
Rent Increase Laws Result in Perverse Outcomes
Additionally, the shift in rent increase frequency, detailed in Section 93 of the Act, has impacted landlords’ ability to adjust rents in response to economic factors. This has resulted in perverse outcomes, where landlords have terminated tenancies with great long-term tenants and the length of new tenancies is being reduced.
The Government’s new proposal to limit rent increases to once every 12 months and attach them to the property, is poor policy and a knee-jerk reaction to the poorly drafted and ill-considered rent limit increase laws passed on 18 April 2023.
The proposed changes are unnecessary and will only cause additional harm to lessors and tenants.
Queensland Rental Reforms: The Ugly
While aimed at improving housing standards, the rental reforms have sparked concerns over their long-term implications. Critics argue that the legislation leans heavily in favour of tenants, potentially discouraging investment in the rental market.
Poor Policy Decisions
Collectively, many of the rental reforms make owning an investment property more difficult and more expensive for Queensland property landlords. Unfortunately, some of the measures passed and proposed by the Queensland Government appear to be wedge politics – with the government perversely blaming landlords for the current rental crisis.
Governments (Not Landlords) Bear the Responsibility for Housing Crisis
You can’t blame landlords for rent increases. In South East Queensland, tenants are faced with record low vacancy rates meaning there are often 80 – 90 people competing for the same rental property. Since May 2022, landlords have been hit with 10 interest rate rises, higher interest payments, higher Council rates, higher insurance costs, higher body corporate charges – the list goes on. Many landlords are conservative mum and dad investors who are finding it hard to make ends meet. To blame landlords for the housing crisis is simply wrong.
Government bears much of the blame for Australia’s current housing crisis, due to poor policy decisions and poor planning over the past 30 years. In short, government of all persuasions outsourced housing policy to the banks and let the market run with it, without any proper controls or policy to stimulate the supply of affordable housing.
Further Proposed Rental Reforms May Worsen Housing Crisis
It is difficult to see how proposed rental reforms are somehow going to make rental properties more affordable for tenants. Rental reforms require balance – looking at the interests and pressures of both tenants and landlords.
The significant risk is that the rental reforms may only exacerbate the rental crisis.
If you increase costs for landlords, take away control on key matters that affect their rental property, and limit their ability to recoup their costs, this will only incentivise landlords to either:
- sell their property – potentially reducing the supply of available rentals;
- make much higher rent increases when they can; or
- make it harder for the current tenant and the next tenant, leading to an unhappy tenancy arrangement.
Overall, while striving to address housing challenges, the Queensland Government rental reforms risk creating new obstacles for landlords and tenants, posing challenges for the rental market’s long-term viability.
