The Queensland state government has recently proposed some reforms to our rental laws. Not just a minor tweaking of the laws, these are wholesale changes that will have some massive effects on both landlords and tenants.
Here at the Henry Wong Team® we believe the effects will be negative on the housing industry and on investors, homeowners and tenants themselves. To help explain why, we’re going to look at what some of the proposed reforms are.
“Ending Tenancies Fairly”
At present, if a landlord wishes to end a tenancy agreement once the 6- or 12-month agreed period is up, they can do so. The reforms are going to limit their ability to do this.
In fact, unless the tenant is clearly in breach of their rental contract, the landlord has no way to vacate the tenant. They have no right to not renew a tenancy agreement when the term expires.
This means a tenant could stay in a property for the rest of their lives if the landlord cannot find a legal reason to ask them to leave.
“Renting with Pets”
Today landlords and tenants can reach a mutual agreement as to whether the tenant is to be allowed to keep a pet in the property.
The new reforms want to change this. They will remove a landlord’s right to refuse a tenant to have pets on the property. Basically a homeowner will be required to show reasonable grounds for not allowing a tenant to bring a pet onto their property.
We got nothing against pets, we actually love them. But should a homeowner not be able to decide if they want them in their property or not?
At the moment, when a tenant wants to make a small change to the home they’re renting, they need to seek the landlord’s consent. We’re talking things like painting a room a different colour, changing fittings or fixtures, drilling holes in the wall. If the landlord doesn’t have a problem, they let you go ahead and do it.
The reforms now place the onus on the landlord to provide reasonable grounds to refuse any minor modifications a tenant wants to make. The tenants will give notice of the modifications, and if the landlord doesn’t have reasonable grounds to deny them within seven days, they can go ahead and make the changes.
If the seven-day deadline passes, then it’s believed the landlord agrees to the modifications and the tenant can make them.
“Minimum Housing Standards”
These reforms are designed to implement basic standards that all houses on the rental market will have to adhere to. The concept is all well and good, and we agree tenants need to be protected in this manner, But if the standards aren’t thought out properly and are too stringent, then it reduces the number of rental properties on the market, which will upset the delicate housing balance supply.
“Domestic and Family Violence”
The whole of Australia wants more to be done to assist victims of domestic violence, and we’re no different. These reforms will help tenants in this situation move home quickly and safely, without providing the stipulated notice.
This fifth reform is definitely the one that makes the most sense to us.
What Will Be the Effect on Homeowners?
What it boils down to is that costs are going to go up for landlords. Here are some of them:
- If they wish to exercise their rights, often it will require attending a QCAT (Queensland Civil and Administrative Tribunal). This in itself costs time and money;
- Adherence to the new laws may require upgrades and modifications to their rental property;
- Pets in their homes can cause damage;
- Tenant modifications may be of poor quality or cause damage to the property;
- Insurance premiums will increase because of the claims.
Many landlords will also not be happy with the ruling that denies them the options to say no to a tenant’s lease renewal.
The end result is going to be a shrinking number of homes on the rental market, as owners react to the loss of control over their asset by selling the investment property. This will mean less homes to rent and more homes on the market for sale.
What Will Be the Effect on Tenants?
It’s pretty tough finding a rental in Queensland at the moment. After these reforms, it could get a lot tougher. Wholesale, hard-line reforms will stop investors from buying properties to rent out. It will also cause many investors to sell their properties. The rental pool will shrink, and tenants with their families will have less choice of where to live.
Rent prices will almost certainly increase. Demand for properties will be high because of low supply, so naturally prices will go up. Added to that landlords need to find ways to coer their increased expenses that the reforms would have brought about.
Is There a Solution?
The real estate industry is an important part of the Queensland economy. A stable market is essential for the financial health and wellbeing of large portions of our society, from tenants to landlords.
Reforms are needed, but they need to recognise this. Everybody is affected by the real estate market in one way or another, so the reforms need to protect the people and the market.
Want to chat more about it, or need to know more about how the reforms could affect your personal situation? Get in touch with the Henry Wong Team®. We’re always here to help.