You may have the keys, but having to hand them back can be a costly business. Photo: File.
Submissions on the ACT Government’s consultation paper on tenancy laws closed last Friday, and lobby group Better Renting has come up with an idea that will make landlords wince but is worth consideration.
Better Renting proposes that if landlords want to terminate a tenancy without a due cause, then they should contribute to the costs this imposes on the tenant, such as removal and storage charges, end-of-lease cleaning, utilities disconnection and connections, double rent while in transition and the use of annual leave while moving.
It suggests a four-week rent waiver to help tenants, who through no fault of their own, find themselves in one of life’s most stressful experiences – moving house – and facing a whole range of costs while the cause of their distress gets off scot-free unless they can’t find new tenants, hardly likely in Canberra’s market.
I can hear the squeals now from landlords and the real estate industry, but after spending a lot of time in Canberra’s rental market, I can testify to what Better Renting is on about.
Renting – and for whatever reasons not everyone can buy their own home and more are going to be in that boat – in Canberra is precarious, expensive and traumatic.
Even when able to pay a reasonably high rent, finding and securing a family home can be a Herculean quest.
One year, if it weren’t for a friend who shared their home with two of our children and us for a couple of weeks, or others who put up our teenage son and another who offered a house-sitting option, we would have all been living out of the car while we stored our furniture and found new accommodation, all while still trying to hold down a job.
After settling into a new home, seemingly secure for a few years, the landlord announced that we had to go to make way for a relative, only to discover from the neighbours that the relative didn’t stay long and there were now new tenants in residence.
So for what was only a short-term convenience, a family of five was again tossed back into the rental jungle.
Then there was the time six months into a 12-month lease, the owners decided to sell the property and wanted any-time access for inspections.
That ended up in ACAT in our favour, but the die was cast. Fortunately, the agent was able to find us another property nearby.
We have been in the one property now for many years and we are grateful for the stability that has brought, but I shudder at the memory of a succession of forced moves that drained our family of finances and energy, pushed us further into debt and put relationships at risk.
The stress this can place on families, in particular, can be immense, with children often having to change schools and a constant dislocation from community.
Better Renting argues that a landlord contribution would not just ease the financial burden, but discourage and deter flippant or unnecessary terminations.
“This wouldn’t prevent legitimate terminations – it wouldn’t even prevent illegitimate terminations where a lessor is willing to miss out on some rental income. But it would make lessors hesitate, and it would reduce the economic hit taken by people who are forced to move,” it says.
It would also provide more stability for families.
Of course, the property industry would howl that it would deter investors and mean even fewer properties on the market and higher rents.
But the main reason for owning rental properties is not about income but tax minimisation, thanks to Australia’s extraordinarily generous negative gearing laws and capital gains.
No one can say property hasn’t been a sure bet over the years, thanks to those favourable tax settings.
And rents are a function of supply and demand and what the market will bear.
It is acknowledged being a landlord is not charity; it is a business in which a tenant is usually paying off an appreciating asset for the owner, and that’s something some landlords need to remember when they complain about the costs of running that business.
A possible rent waiver would be just one of those costs, and unlike maintenance, one that could be avoided.
Realistically, it’s an idea that might be a bridge too far for government, but it does highlight that in a world where for many homeownership is increasingly beyond them, Australia’s landlord-favoured rental landscape will need to change if social stability is something worth having.
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