A ‘bleak’ bar has been set for rental properties across the country, with minimum standards among a raft or regulations states and territories are pushing. Photo: Louise KennerleyANALYSIS
Rent reforms: What new rules will mean for tenants across Australia
JOURNALIST DEC 23, 2019
A working toilet, running electricity and cold and hot water don’t seem too much to ask for in a home, but it’s not always a given that a renter would have them.
Minimum standards clarifying what makes a home habitable are among regulations unveiled across Australia in recent years, as governments say they want to make life better for the growing number who rent (31 per cent at the last census).
Leo Patterson Ross, senior policy officer at the Tenants’ Union of NSW, sums it up: “It is bleak. But it is a bit useful, because essentially [some] landlords will claim everything is liveable.”
NSW, Victoria and the ACT have all recently legislated changes, Queensland, Western Australia and the Northern Territory are in the process of reviewing their regulations, and South Australia and Tasmania made changes several years ago.
Chris Martin, of the City Futures Research Centre at the University of NSW, said the long-overdue reforms resulted in greater protections for domestic violence victims, but are otherwise “a bit vanilla”.
Limiting the frequency of rent increases, making it easier for tenants to get repairs and allowing pets by default are among changes governments have pushed, alongside caps on bonds, set fees for breaking a lease and allowing tenants to make minor modifications to a property without consent – so they can nail a picture hook into a wall or install extra security measures.
New minimum standards also guarantee tenants (wait for it) a structurally sound property, adequate lighting and ventilation and plumbing and drainage.
The big concern amongst experts is that remaining “no-grounds” evictions – which allow landlords to evict a tenant without a reason – will undermine any changes aiming to improve rights.
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While there is already legislation to ensure homes are habitable, Dr Martin said, tenants often feel so insecure in their tenancy that they don’t enforce the rights they have.
Queensland is the only state which has proposed to scrap no-grounds evictions, while Victoria has legislated restricting their use to the end of the first fixed-term.
This created a risk for more churn of rental properties, Mr Patterson Ross said, particularly in high-demand areas, if landlords looked to change tenants regularly to hold onto no-grounds evictions.
But he notes Victoria and Queensland had overtaken NSW with their bolder reforms. He is sceptical of how much change reforms would bring while such evictions remained.
Seven in 10 renters fear making a repairs request could result in a rent rise, according to a 2018 survey by Choice and leading tenancy groups. Almost half fear it could get them kicked out, while nearly one in 10 have been evicted “without grounds”.
“People are fearful of being asked to move, scared to ask for repairs or [complain],” said Penny Carr, chief executive of Tenants Queensland. “You can be evicted without any reason … [it] masks discriminatory and retaliatory behaviour.”
Under the proposed Queensland changes owners would need to give a valid reason to end a tenancy, and the list of reasons would be extended and enhanced. “There’s no change to how [tenants who] are doing the wrong thing can be managed,” said Ms Carr.
This hasn’t stopped the powerful real estate industry from slamming the changes. The Real Estate Institute of Queensland recently described proposed reforms as “a slap in the face” to mum and dad landlords. Chief executive Antonia Mercorella said the changes would erode the rights of landlords and make property investment far less appealing – resulting in a drop in investment and subsequent rent increases.
Propertyology head of research Simon Pressley said reforms could cause rents to skyrocket by $100 a week and investors to desert the market due to “draconian laws”.
But Dr Martin – who in July released research showing the stereotype of “mum and dad” investors was bogus because investors were largely mid-life, older, wealthy households – said reforms were unlikely to drive investors away. He noted separate research showed tenancy law was rarely a factor in investment decisions, with activity primarily driven by the availability of finance, tax settings and local market changes such as infrastructure announcements.
Dr Martin said though the cost of property improvements could potentially flow through to slightly increased rents, anyone deterred from investing because of reforms was unlikely to be missed.
“It would stop the discriminators and the retaliators. That’s why it’s so disappointing when the property or real estate lobby goes into bat for the worst [landlords]. That sort of landlord and that sort of property that can’t deliver a reasonable standard of housing to people – we are well rid of them.”
Mr Patterson Ross says Australia trails behind other OECD countries in failing to regulate how landlords choose a tenant or the information they request. Viability tests to ensure landlords could afford a property’s upkeep, training and licensing, and penalties for landlords withholding repairs were measures in place or under review in other countries.
With buying a house out of reach for many, governments need to take further action if they want to make renting a viable, long-term alternative, Mr Patterson Ross said.
“Either you have a lot of supply that provides real competition, and that’s what drives a better experience, or you have really strong regulation. At the moment in NSW, we have neither of those things, so we have to lift one of those.”
For now, tenants across most of the country could be given the boot from their home without reason before next Christmas. But at least they can hang a picture up until then.