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Government’s new laws to strengthen renters’ rights alarm property industry

By Ian Bushnell 25 October 2018 30
Personal Lease Guarantee

The Government says tenants will have greater security under the new laws.

The ACT Government will next week introduce its long-awaited legislation to provide better protections for renters, including set rent increases, lesser financial penalties for breaking leases, allowing pets, and making minor modifications to properties.

But some of the measures are ringing alarm bells in the property industry, with warnings they may exacerbate Canberra’s already tight rental market.

The Government says the new laws will enhance the security and liveability of rental properties. Canberra’s rents are the highest in the nation and many of the city’s vulnerable, low-income and key worker tenants are struggling to cope.

The bill to be introduced to the Legislative Assembly next Thursday will shift the onus from tenants to landlords to justify a rental increase that is excessive beyond a basic CPI-based threshold. There would still be room for landlords to adjust to market conditions, but the default would be that rent increases should be in line with a set formula.

The bill will also curb the practice of charging amounts beyond what a landlord actually expends in cases where a tenant leaves early, especially when there is a replacement tenant.

The new laws will create a presumption in favour of allowing tenants to have pets. Many tenants have been forced to give up their animals so they can move to a new rental property.

Renters will also have greater rights to make basic modifications in their own homes, such as using Blu Tack on walls and picture hooks.

Managing Director of Property Management at Independent Property Group Hannah Gill said there would be little argument with basic modifications, especially in long-term tenancies, but she was concerned that if the proposed changes came in together, landlords and investors might think twice about being in the market, particularly with other costs rising.

“Essentially the property for a landlord is a business so where in business do you say we’re going to limit how much money you’re going to make from your business? I understand there’s an issue with shortage of stock and rental affordability, but the owner shouldn’t be worse off,” she said.

“If you sign a contract there are penalties if you break that contract, a lot of these changes have little regard to the landlord’s business, which is their property.”

Ms Gill said that with the state of the market tenants should not be too much out of pocket when breaking due to the quick turnover of tenancies.

“We don’t have properties sitting vacant eight or 10 weeks, we’ve got people lining up knocking down the door,” she said.

Ms Gill said she understood the situation of pet owners but landlords needed the protection of a pet bond.

She said there needed to be a balanced long-term strategy, not a kneejerk reaction in some instances to try to appease part of the market.

“We need to be mindful of what the long-term goal is, because the worst thing that could happen is that we have investors leave the market. It’s the worst outcome because it means housing affordability will become tighter and rents are going to continue to go up, and that actually doesn’t help anyone,” Ms Gill said.

“If there are protections for both parties then changes are fine to happen, but if it’s a one-sided debate then one party is worse off, it’s not a good idea.”

Minister for Business and Regulatory Services, Gordon Ramsay said the Government was committed to making sure that people, especially vulnerable people, in our community had the protections they needed in the rental market.

“These laws are yet another step towards more secure, liveable and affordable housing for all Canberrans. We will continue our work on the issues that affect renters, following on from the detailed consultation we have done on tenancies and other living arrangements like caravan parks, student accommodation, and boarding houses,” he said.

“This Government will keep working to deliver amendments and services that support our housing priorities and will continue to deliver legislation and policy reforms that prioritise the most vulnerable households in our community.”


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27 Responses to
Government’s new laws to strengthen renters’ rights alarm property industry
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Jennifer Jones 12:37 pm 28 Oct 18

When did 'dog ownership' become a human right? Why is it promoted so hard? Why does a lessee's wish to own a dog trump a lessor's wish to not have animals living in their property?

Nina Bee 4:48 am 27 Oct 18

Sadly the owners will just reject people with pets. Don’t see the benefit in this, you never know why you’ve been knocked back for a rental so it’s easy to get away with.

Sue Ellen 10:25 pm 26 Oct 18

Who pays the $10,000+ to repaint and repair flooring etc?

Wade Bermingham 4:44 pm 26 Oct 18

The concern is real personally would consider bumping up rents a notch solely because of the pets bit if I owned a place

Grimm 9:06 am 26 Oct 18

Should be amusing. If I were still in property investment, I wouldn’t be renewing my current tenants lease, getting new tenants and banging up the price to cover likely damage from pets and modifications. Going to bet that happens a lot if this bill passes. Enjoy your cats and picture hooks, they’ll cost you an extra 60 bucks a week.

Ashley Latimer 8:43 am 26 Oct 18

I'm not sure what people expected when the industry is saturated and inflated by investors. More investment properties = more people renting = less people owning their own home. Additionally, there are a substantial amount of investors who rent anyways, so this also helps them. *shrug*

Ming Suan Ong 8:01 am 26 Oct 18

Nai-Jit Lam about that dog....

Nai Brooks 7:29 am 26 Oct 18

Isn't a 'pet bond' a... bond?

Roma Henshaw 7:01 am 26 Oct 18

With Canberra’s already tight rental market, properties will be taken off the rental market.

Bethany Corr 6:11 am 26 Oct 18

Let’s hang some pictures! Charlotte Cooper

Peter Brassington 9:30 pm 25 Oct 18

I'm sure there will be plenty of landlords out there deciding on another investment rather than property.

--- this will put more pressure on rent $, and the number of properties available for rent.

    Justin Watson 10:27 pm 25 Oct 18

    yes but more properties for sale puts downward pressure on house prices and will enable more renters to buy sooner due to a cheaper price. These things don't work in isolation, just like neg gearing is a factor in house prices but it is not the only one. There will also be other investors keen to buy more property and not as worried about the rule changes.

    Pierson Blake 11:37 pm 25 Oct 18

    Only reason so many are renting is because houses have become unaffordable because of investors.

    Jarryd Moore 12:38 am 26 Oct 18

    Oh no, what a tragedy! Less investors in the market pushing up house prices for people that actually want to buy a place to live in! Let me shed a tear for the poor landlords 😢

    Mick Barry 6:56 am 26 Oct 18

    Us poor investors give you the opportunity to rent a place in the first place , no tears shed, just think yourself lucky you have a roof over your head.

    Ella Factor 7:50 am 26 Oct 18

    No, investors don’t give us the opportunity to rent, they take away the opportunity to buy.

    Go for it, please, start selling up. Canberra’s house prices have been growing when the rest of the country is dropping.

    But if the thought of letting your high paying customers have any rights is so horrific, then sell and go find another industry to invest in!

    Nicole Sutherland 8:35 am 26 Oct 18

    Mick Barry the poor renters are the ones paying for your investment think yourself lucky there are people wanting to pay for your lifestyle!!!

    Joel Dignam 3:04 pm 26 Oct 18

    From https://www.ahuri.edu.au/research/final-reports/130

    Robin Butler 9:01 am 28 Oct 18

    It's exactly this attitude, that a renter should feel gratitude for the opportunity to rent your property, that is problematic. Renters are not serfs and having a roof over your head is a human right. And 'poor investors'? Really?

    Peter Brassington 3:29 pm 28 Oct 18

    Robin,

    My comment wasn't a reflection on tenants, or serfdom, or gratitude.

    It was about risk and return on investment for property owners.

    The more the pendulum swings in favour of tenants, the more at risk the property is. (Possibly)

    If investment properties become problematic, investors will switch to shares, gold, interest bearing deposits, commercial property, etc.

    It's just common sense.

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