Proposed QLD reforms

Has anyone seen these proposals?

If these go through, investors effectively lose control of their asset. This has the potential to create a mass exodus of investors out of QLD ...which could create a huge surplus of stock and drive prices down, while simultaneously creating a shortage of rentals , leading to a mass increase in rents by those landlords who stayed invested in QLD under the new arrangements.


Qld rental reforms: bad news for tenants; a disaster for landlords - Bees Nees

REIQ: No winners under QLD rental reforms

QLD rental reforms could cost tenants $5K a year: Propertyology - realestate.com.au

 

Hysteria.....I will be looking to increase rents.....that is stupid policy.

I can also prices rise as less is built....very dumb policy. I can't it see it being too much of an issue so long as tenants pay rent and maintain the property.

Selling a place or renovating is a good to get a tenant out...

 

Other states have already, or are considering, intoducing similar legislation.
So regardless what I think about it personally, its going to be an issue across states, if not now, then likely into the future. So the way I see it is you understand and accept it as a condition of property investment or you just don't invest in property.

 

I've lobbied to the state premiers office about it in conjunction with reiq as this would be a detriment to our investor clients.

 

The same reforms are being introduced in NZ. Some smaller investors are selling up. More experienced ones seem to be taking the view that the resulting even higher demand for rentals will push up rents, push lower socioeconomic tenants or those with tribunal history into short term emergency accommodation and allow landlords to be more picky with applications, therefore reducing their risk.

 

Good read by Stacey Holt from Real Estate Excellence Academy:


December 12 2019 - My final statement and submission regarding the 'tenancy law reform' - RTRA Act review


Real Estate Excellence – Stacey Holt

Submission to the Queensland Labor Government

Regulatory Impact Statement.

There should be further consultation after the closing of the RIS on 28th December 2019 with all the sector by the Government releasing the draft Act and regulations amendments. This would be a more democratic, reasonable and just way to truly achieve the outcome of making renting fair for all parties. The Queensland Civil and Administrative Tribunal (QCAT) which commenced in December 1, 2009 should also be reviewed as part of tenancy law reform. QCAT is made up of 24 tribunals; as part of this review, the tenancy arm of the Tribunal should be reviewed with tenancy law reform.

The Labor Government of Queensland has conducted the review of rental tenancy laws in Queensland in such an extraordinary way and have created a lot of uncertainty, and some fear for investors and the Real Estate industry.

The review carried out in 2018 was arduous, complex and lengthy. Most in the sector would not have had the time to keep up with the review for what turned out to be almost three months in length.

The reported statistic of 2% of the property management industry contributed to the 135 000 responses is not correctly represented given organisations such as my company Real Estate Excellence who has over 250 agency member offices, the REIQ, PPM Group and Real Estate Dynamics to name other substantial industry representation and membership.

The Minister for Housing posted on his social media page recently regarding taking the pledge relating to victims of domestic and or family violence in tenancies having an easier option to end tenancies. What was disappointing and has added to fear, possible anger and confusion by many in the sector, is the Minister called for people to take the ‘pledge’ and sign an online submission to support people in these terrible situations in relation to tenancy law. What was most disappointing, and quite a shock is the link to the Labor Party website to complete and ‘sign’ support, stated that by taking the pledge, people agree to ending revenge evictions, minimum housing standards, tenants right to make modifications and right to have pets, plus tenant right to end tenancies who are victims of family and domestic violence.

Strategies such as what have been used by the Minister, and other members of the Labor party have only escalated the confusion, fear and uncertainty. The RIS is meant to discuss the Government preferred option and call for feedback from all parts of the sector; the language and behaviour of Government during the review, and now the consultation stage shows a great bias towards any constructive feedback and a very unbalanced approach. I will discuss the matter of without grounds further shortly, however, it must be said that Government language verbally and in writing of stopping revenge and or retaliatory evictions is aggressive, embellished and without substantiated evidence it occurs. There appears to be only anecdotal evidence. In my review and knowledge of QCAT cases over these last ten years, there have been three decisions/appeals published regarding retaliatory eviction applications. Not all decisions or appeals are published. If this is such as widespread issue, where are the RTA statistics of fact from their call centre, and or dispute resolution?

This critical stage of consultation, and the Regulatory Impact Statement is lacking in detail and is disappointing. Whilst the 170-page document is detailed, it is lacking in detail.

What is needed for such as substantial change to legislation is detail. Where are the proposed amendments to review and comment on? The timeline provided by the Government states the next stage is the decision of the RIS and then the bill, I cannot see there will be further consultation to what is most important, the facts. The bill will then be introduced into Parliament.

Most of the RIS is unbalanced and not fair or just to all parties. There is one possible benefit for an investor being the proposed introduction of a notice to leave for serious breach. This has long been lacking in the industry, particularly with drug use, manufacturing and contamination being a concern within the sector. All other proposed reforms potentially benefit tenants only. This is not about the investor right or control; though some certainly feel disempowered and fearful about their investment of hundreds of thousands of dollars. A reasonable person would understand that fear and Government are attempting to dictate how an investor can decide the future of their investment. Investment is a private business.

Government should be focusing on purchasing land, properties, and creating affordable rental housing. There appears to be a deliberate intent of Government imposing their obligations onto private investors, plus increasing compliance, therefore cost. The smoke alarm law second tranche that began in 2017 is due to expire December 31, 2021. Investors have this cost, along with unknown other requirements regarding minimum housing standards. It is fear of loss of control, rights to make decisions about investments, and the affordability and risk of having such investments that is making the sector uneasy. The property is an investment for an investor and is not bought to fulfil a much-needed supply of social and affordable housing; that is the role of Government of which we pay substantial tax for.

I am not disputing property needs to be safe, and fit to live in. Ever since the RTRA Act was first put under review in 2012 by the former LNP Government, I have supported the existing laws as provided in my submission in 2018 when the review was carried out. A parliamentary committee stated in 2014 the law did not need to be amended as shown in extract below.



Public tax payer monies should have been focused on education and informing people of their rights (tenants), and investors of their obligations with what is currently in law. Instead, increased red tape and cost is being introduced.

Regarding the further proposed changes in the RIS regarding minor modifications, sections 217 to 219 cover tenant and lessor obligations and rights regarding making changes. There was and is no need for further legislation to complicate and confuse a matter which is already provided for in the legislation.

The sector should know at this stage of the review of such important legislation for many the following;

• What are the proposed reasonable grounds for a lessor to refuse a pet?
• What is the definition of minor modification?
  • Why is the time frame for response only 7 days? A more reasonable time frame to allow for contact, discussion and negotiation is recommended to be 14 days.
  • What detail will be in the legislation regarding returning the property in the same condition if minor modification without approval, or with fast-track approval?
• What are the minimum housing standards going to be?
  • This is most disappointing given section 17A was inserted, and section 185 amended by the Government in November 2017. Given all this time, it is disappointing they have not been provided for a more constructive consultation. People do not know what they are disputing, agreeing to or in part agreeing to etc.
  • Increased repair and maintenance provisions in the RIS state RTA prosecution as an option for non-compliance of QCAT repair orders. Again, there is no detail to constructive consult and or give feedback on this matter.
  • Providing property managers authority regarding emergency repair authorisation is of concern given the PO Act and the OFT regulate the industry as opposed to the RTA. What is further of concern is section 22 of the AFA Act prohibits agencies from drawing trust account monies from a client’s ledger to pay accounts such as contractors without the clients written authority. Providing authority in the RTRA Act for property agents to authorise emergency repairs is possibly putting businesses at risk, as the industry legislation states the actual account cannot be paid without client written consent.
  • Are the RTA going to also regulate property agents, and will there be amendments to the PO and AFA Act to allow and cover such proposed authorise in the RTRA Act?

In relation to Domestic and Family violence being a reason a tenant can provide notice is supported in part; the time frame for notice should be more reasonable and be 14 days. The ability for a cotenant to give 21 days’ notice when a victim terminates due to violence, should not proceed. Any people named on the tenancy contract who are on the lease have other ways to end the tenancy and if they are not the effected party, should not be given a provision to end a tenancy when they are not the victim.

Without grounds as a reason to end a fixed term tenancy has long been an emotive issue within the industry. The proposed preferred Government option of removing the without grounds as a reason to end a fixed term or period tenancy contract and replace with prescribed reasons is a highly controversial matter. What about the Australian Consumer Law (ACL) and the unfair contract terms; isn’t such proposed terms in a contract unbalanced and give more power to one party over another. The tenant should have a home; but it is not their property, it is the property of the investor.

An unintended consequence which appears to not have been considered is Landlord insurance and risk. Most landlord insurance policies provide no, or limited coverage for periodic tenancies. Common practice of industry since the notice to leave without grounds provision was increased to two months in 2009 is for lessors to be contacted by their agents around 2.5 to 3 months prior to a fixed term agreement contract expiring. The only reason this best practice procedure occurs is in the event the lessor wishes for the tenancy contract to end at the end of the fixed term agreement, and the two months’ notice can be provided to the tenant.

The RIS notes Queensland has some of the highest fixed term tenancy contracts in Australia. The reason this would long be the case is due to security of all parties, best practice and particularly, landlord insurance. If a tenant is offered a new agreement contract (lease renewal), and refuses to enter into a lease renewal, the tenancy reverts to a periodic. This leaves the investor in a serious position of risk due to reasons noted above; most lessor insurance policies provide limited and no coverage in the event of loss if a tenancy contract is periodic. Due to insurance and management of risk and security, tenants may be given a notice to leave without grounds if they do not wish to enter into a new tenancy agreement (leaser renewal).

Most tenants are good people, as are most investor lessors and agents. Bad things happen to good people meaning if the tenant does not want to enter into a lease renewal agreement, as they want the flexibility of a periodic lease, and the lessor does not have a proposed prescribed reason to end the tenancy, the investor is left in a dangerous position if the tenant situation and life changes. Examples include addiction, job losses, relationship dispute as opposed to violence and more. In the event the good tenancy ‘goes bad’, and the lease is periodic, there is great risk of loss to the investor. Is there a possibly of introducing a reason to give notice to leave is if the tenant does not enter into a fixed term agreement when offered? It appears tenants want security, and increased rights to make the investors property their home, but also want the flexibility. That is unfair to the investor who carries all the risk and cost of the investment property and is not a balanced approach of Government.

There are genuine concerns that investors may leave the market due to their loss of right to end a tenancy contract for their asset without grounds for the reasons stated in this submission. This is a possibly the Government cannot find afford to risk, given supply and demand drive rental market price, plus, the lack of social housing and homelessness. All parties most likely will suffer should the removal of without grounds proceed.

The solution to the minority of lessors who the Government call the ‘retaliatory and revenge eviction’ is to introduce a penalty unit provision if a tenant is provided a without ground notice in breach of section 291, with section 292 allowing for tenant to make complaint to the RTA if there is an alleged breach of the lessor in giving a notice to leave without grounds during a fixed term, and or periodic contract.

My understanding is Tenants Queensland have long expressed concern regarding section 292 in the tenant must ‘action’. The action being applying to tribunal within 4 weeks of being given a notice to leave and it is thought to be retaliation to a tenant utilising their rights, such as issuing a breach to lessor for alleged breach of their maintenance obligations under section 185.

The option of introducing a penalty for the issuing of a notice to leave without grounds is a win for all parties; and provides the tenant an effortless cost free option of complaining to the RTA for review of the notice to leave without grounds given in breach of section 291. The RTA should have the option of setting the notice aside, plus opposing a penalty if upon their usual investigation procedures finds the lessor is in breach.

There may be administration burden for the RTA; however, this should not deter the Government consideration given the serious risks involved for all parties should notice to leave without grounds be removed from the legislation as noted above. Given the number of QCAT decisions relating to retaliatory evictions in the last ten years, a substantial administration burden is not expected to occur for the RTA. This is a matter that could be reviewed in the years to come. The Government can fix this so-called widespread industry practice which is greatly disputed by introducing a penalty unit offence and ability to set aside a notice to leave without ground if it is found there has been a breach by the lessor of section 291.

Most of the unbalanced proposed reforms require an action of the lessor investor and or agent to take a matter to QCAT; such as refusing a pet (reasonable grounds unknown), and minor modifications not agreed to. As stated earlier, my understanding is Tenants Queensland have long had concerns that tenants have to take an ‘action’ such as apply to QCAT to enforce their rights they believe are being breached. It is proposed in the RIS that it will all fall on the investor lessor and or their agent to act for these matters. Again, this is very unfair and unbalanced approach.

Tenants have the right and should have to make the property their home. But the reality is, it is not their property. It is their home for the terms of the legal contract. Investors who are carrying all the cost and risk, should have a say as in any business transaction as to what occurs with their investment and not be dictated by Government. Government should create more housing and focus on policy for housing people to have homes for life as part of social housing.

There should be further consultation after the closing of the RIS on 28th December 2019 with all the sector by the Government releasing the draft Act and regulations amendments. This would be a more reasonable and just way to truly achieve the outcome of making renting fair for all parties.

Yours sincerely

Stacey Holt

Company Director

Real Estate Excellence

www.realestateexcellence.com.au

 

Unfortunately, I suspect her submission will not be taken very seriously.

She doesn't seem to understand some of the fundamental basics of residential tenancy law, and seems to be making some pretty outlandlish claims about both the current state of the law, and with her proposed solutions.

Yes its all very elegantly written, but there's nearly no substance in the actual content. Its basically a very long version of "this is unfair towards landlords because its their property" (which isn't even correct at law technically).

 

Let's say your lease ends on June 25, under the new legislation, can you not just give your tenants two months notice that you don't wish to renew their contract? Let's say your reason is you just don't need tenants anymore because you wish to demolish the house etc. Do you even need to give them a reason? So again my question is can you not just not renew?

 

I'm all for it, as it's the right thing to do. Being a renter is pretty terrible. The deck is massively stacked for us, when you compare it with other western countries (obviously there's some exceptions).

I strongly believe that the first question we ask in politics should be "is it the right thing to do", not "is it good for me personally".

 

God help us all if we become like ridiculous California . I got friends investing there and the tenants rule the roost.

I personally am against any hardcore lefty model.

 

We once had a tenant who wanted to keep their pet snake inside at one of our houses .

Under the current rules, we declined their Application. It will be interesting to see where we stand under the new rules once the law is updated .

 

Wait, why? A snake is hardly a animal that's going to destroy the property.., that's a bit unfair.. it's no different than having a pet lizard..

Matter of fact, a bird would be more risk to the property than a snake IMHO.

I always get this feeling that so many people are connected to their IP in an emotional way it deters them from making the correct business decisions ... Those decisions are normally tenant requests...

 

It was a bloody BIG python, for heaven’s sake .

I can imagine the neighbouring parents with kids, especially before school age (this property is in a young family suburb), would be totally impressed if they saw it inside or outside the house.

PM me your phone number and, if it happens again, I will refer them to you for approval to one of your IPs .

Not this emotional old fart .

We want tenants who look after the place, quickly report any maintenance issues and pay their rent on time while they have quiet enjoyment of our properties.

For us, rental properties are a business; we seek to maximise our NET WORTH by maximising our portfolio’s net income and our capital growth.

It is that simple.

We don’t want property managers nor tenants who don’t understand that.

 

Having a pet snake doesn't go against any of these things.

 

They won’t have quiet enjoyment if the neighbours and their kids harass them

 

So? Pythons are actually quite tame and non aggressive.. they make great pets I hear..

I don't understand your logic here. If it's inside, it's inside so what about people looking in? Why does that even matter to you..

Sure, happy to take a paying and respectful tenant from you, one that actually asks for a pet instead hiding it.

Won't get income if you're being silly like that and turning down tenants because of a pet snake..

 

Your kidding, right.

Pythons constrict if they feels threatened, or mistakes a hand for food. While not venomous, large pythons can inflict serious injuries, sometimes requiring stitches.

I love your definition of a “great pet”.

I told you I was an emotional old fart.

If something upsets my tenants or my property’s neighbours, it matters to me in a big way.

Wait, I thought all good landlord would have the same perspective. You saying they don’t?

Still waiting on your phone numbers so I can send you all my rejects

Didn’t miss out on any rent. Accepted another application prior to the property becoming vacant.

In my limited experience, landlords have to “sell” their properties to prospective tenants AND prospective tenants have to “sell” themselves to a landlord.

And because our portfolio is a business, we will always seek the best tenants we can find (with the help of our PMs).

IMHO, I would rather leave a property vacant (and wait for an application from a good tenant) than approve an application “with red flags”; far less grief for me and far better financially.

I am happy to you to run your property empire with a different modus operandi to my portfolio.

 

That's dramatic, a dog can also mistake a hand for food. That said who's hand are you talking about? The owner of the pet? I'm pretty sure they're well aware of the capabilities of their pet.

Doesn't let tenant have pet, tenant gets upset..

By denying your tenant a significantly less damaging pet (damage to property) you're pretty much adding to the reasons why the reform is needed in the first place.

A snake isn't a dog or a toddler which cause way more damage.

Landlord willing to have out private information of rejected tenants that he should not longer have access to. Nice.

Just to be clear, a pet is a red flag? We're talking about a snake (or pets if you wish).

 

I also think its pretty odd that you had an issue with a pet snake.

Its hard for me to see how your interests as a landlord would be materially affected by allowing a snake, versus the detriment to the tenant in being denied their pet.

I think the proposed legislation is designed to introduce that sort of balancing act in the legislation.