New Queensland rental legislative reforms could have a damaging
impact on the industry, according to the Real Estate Institute of Queensland
(REIQ).
the housing Legislation Amendment Act 2021will implement a string of
changes to the way the sector is run and managed.
The reforms, which come into effect
from 1 October 2022, include the removal of the right for property owners to
end a periodic tenancy simply by providing notice, a move that could result in
the extinction of these tenancy types, according to REIQ chief executive
officer Antonia Mercorella.
"When these laws were passed, we
warned they could effectively spell the end of periodic tenancies in
Queensland,” Ms. Mercorella outlined.
"We wouldn’t be surprised if periodic
leases become extremely rare if not extinct in Queensland, which is a shame
given the flexibility it offers both tenants and lessors.”
As part of a push from the REIQ to prepare property managers for
these reforms, Ms. Mercorella has advised property managers "to start talking to
their clients now about the risk of a ‘never-ending tenancy’ if they don’t
transition periodic tenancies to fixed-term tenancies ahead of the new laws”.
She has also warned property managers
to plan for an increase in the number of tenants seeking approval for pets,
given the legislative changes have restricted owners to only denying pets if
they can establish prescribed grounds.
While she acknowledges that pets can
at times be an extension of the family, Ms. Mercorella stated that "not all
property owners feel comfortable with the potential risk of pet damage to their
property and its value”.
"Previously, property owners could
choose to simply say ‘no’ to pets in their property, but with these new laws,
property owners will have limited grounds to refuse a pet request,” she said.
Despite the silver lining of these
changes, which afford property owners "the ability to impose certain conditions
in relation to the approval of a pet in their property, and be able to seek
compensation for damage caused”, she is alert to the potential shrinking of the
rental pool should investors tap out due to these new rules.
"The unfortunate reality is that for
some, this will take the shine out of investing in Queensland property,” she
said, adding that despite the appeal Queensland presents investors, the more
property owners’ choices were restricted, the less attractive the Sunshine
State becomes.
"While some property investors may
have made the decision to sell in anticipation of the new laws being
introduced, it’s concerning to think what the aftermath could be once the laws
are in operation.”
Ms. Mercorella hopes the Palaszczuk
government has identified how heavy-handed legislative reform "disrupts the
delicate balance of contractual rights between tenants and property owners”,
which, in turn, "can have unintended consequences for the entire rental market”.
"We can only hope the state government
is paying close attention to the impacts of these new laws before they launch
into the controversial phase two of rental reforms flagged for this year,” she
said.
She concluded by expressing that while
there does need to be protection available to tenants, "finding the right
balance is important because we do heavily rely on private investors when it
comes to housing Queenslanders”.
The new legislation will also
introduce provisions that remove the ability for property owners to end
tenancies without grounds and implement protections for tenants experiencing
domestic and family violence, providing them streamline termination rights as
well as establishing additional approved reasons for lessors and tenants to end
a tenancy.
In response to the Queensland
government’s rental reforms, the REIQ has indicated that it will be providing
comprehensive and practical training centred around the new tenancy laws to
property managers and principals across the state.
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Jason Gwerder
Thursday, 7 July 2022
