Rental Reforms further the property divide

The QLD government has now passed into law further rental reforms which will impact all residential

The QLD government has now passed into law further rental reforms which will impact all residential tenancies not just moving forward, but in some cases reaching back in time as well as it is applied restrospectively in a controversial legal move.

After swiftly introducing and passing a raft of changes last year with little to no industry consultation, its more of the same this month, albeit with some (minor) logical smoothing courtesy of property advocates.

Some changes are on the easy side and fairly expected, such as rental bonds now being capped at 4 weeks regardless of price point, and rent bidding now outright banned (as opposed to previously, where landlords were forbidden to encourage but could otherwise accept unsolicited offers higher than advertised). Accepting more than 4 week’s rent in advance at the start of a tenancy has now also been canned, though a tenant can choose to get ahead after the lease has commenced.

Other areas are if not surprising, then at least contentious – with a previous change to rental increases just once per 12 months within a tenancy now tied to the property, not the lease. As well meaning as this might have been – limiting the number of rental increases to a single bump per year, I am already seeing signs this is unlikely to have the intended effect of reducing the growth in rental prices.

To start, instead of a gradual rise every 6 months, owners now essentially need to price in everything a year ahead – increasing the bill shock for tenants every time that anniversary comes around. Costs are going up across the board – interest, maintenance, rates and certainly insurance. With only one opportunity for a rise in income to go with expenditure, unfortunately this lands on tenants, and its likely to land hard.

Secondly, with rents now tied to a property rather than a tenancy, I suspect we will quickly see the end of sweetheart deals or lower rents for a long-term tenant or in special cases – as a favour done for one tenant, could now impact the rental achieved under any lease over the next 12 months. This kind of one size fits all approach really doesn’t work in the real world, and doesn’t take into account things as simple as improvements to a property made between leases. A property given a full renovation between tenancies is treated the same as one without a dollar spent on it, and the only recourse for an owner is to apply to QCAT!

There are lots of responses to a housing crisis, and this is one of them. I think the time might have been better spent on the tools…