RTA reforms: They just keep coming

The Government has announced another set of proposed changes to the Residential Tenancies Act and they say landlords and tenants will both benefit from them. However, landlords in general are not in agreement with what the Government is proposing. The Property Investors' Federation, has said that the proposed law changes were well-intentioned but misguided and they would impact more than just landlords and tenants.

So what are some of the changes and how will they effect the rental market?  

Periodic tenancy agreements

Currenty periodic tenancy agreements can be ended by the landlord for any reason and without a requirement to tell the tenant why. The proposed changes will make it harder for landlords to end these agreements and they can only be ended by some of the following reasons: change to the use of the premises, premises are to be demolished, the property is going on the market.

Ending fixed-term tenancy agreements

Currently at the end of a fixed-term tenancy the tenant and landlord can reach an agreement about what happens next. They might agree to extend, renew or move out. What is being proposed now is that tenant will get more power and could demand to stay. This has caused a stir with landlords as they fear their rights in attempting to control their rental properties and have a say about who lives there and for how long, is being taken away from them.

Limiting rent increases and a ban on rental bidding

Rent increase will be limited to once every 12 months instead of the current 6 months. And landlords or agents will not be allowed to seek rental bids. This includes advertising rental properties with no rental price listed or organising a rental auction. Currently there are no rules around rental bidding.

Changes to the property

Tenants will be able to add minor fittings and improvements, such as baby proofing or hanging pictures. Changes that tenants make will need to be restored to the original condition at the end of the lease. Currently landlords must give consent if the tenant wants to install a fixture. Again, this reduces control or authority of the landlord being able to say how their own property is used. I would maintain an ‘ask for permission first’ approach so landlords and tenants are on the same page.

These are just some of the proposed changes to the Residential Tenancies Act that are expected to be introduced to Parliament in the first half of next year. You can read more about these changes and others being proposed by the Government here.