Being a landlord in the ACT is not easy. The Residential Tenancy Act is geared towards the rights of tenants, and landlords and agents dread going to ACAT, which they see as too tenant friendly. Many agents and landlords I speak to have sold their rental properties as it’s all too hard. This, of course, does nothing to ease the rental crisis, and only helps fuel rent rises. It’s a lose-lose situation for everyone.
The Residential Tenancy exposure draft Attorney-General Shane Rattenbury released last week will make the crisis worse in several key respects.
Firstly, it does help one landlord – Housing ACT. New section 47(1A) and (1B) exempt Housing ACT from any review by ACAT when they wish to terminate a longstanding tenant’s lease so they can move that tenant against their will to another dwelling. Let’s call this the “move longstanding, elderly, vulnerable tenants who have lived in the same house for 40 years” clause. Most people I talk to think such actions by Housing ACT are unconscionable. Now Mr Rattenbury wants to enshrine it in law.
Regarding clauses that affect private landlords, space prevents me listing everything but the two killer clauses are:
1. New Section 19A enables the government to legislate by regulation minimum housing standards and lists five rather nebulous matters a landlord must address: physical accessibility, energy efficiency, safety and security, sanitation, and amenity. Failure to do so will enable a tenant to get compensation and force the landlord to renovate the property. The bill says nothing about what constitutes a minimum standard. All of these five listed matters have the potential to cost landlords tens of thousands of dollars, and most landlords are mum and dad investors who don’t have that sort of money.
2. The second killer clause is equally bad, if not worse. In every other jurisdiction, a landlord can, after the fixed term part of a lease is up, give notice to terminate the tenancy by serving a “no cause” termination notice, which indicates the landlord wants the property back, and gives the tenant anything from two to three months’ notice. In the ACT, the period currently is a generous 26 weeks. Now this general clause, which is essential for landlords to have some ultimate control over their property, is being removed. When you combine the new bill with the provisions for retaliatory actions (i.e., where a tenant who complains to ACAT or some other body about the property can then turn around and successfully dispute any notice to terminate the lease as being a retaliatory action), this effectively opens the door for a difficult tenant, who does at least pay their rent, to stay in the property forever, as a landlord couldn’t get rid of them.
If someone asked me whether they should purchase an investment property in the ACT, my advice would be: Don’t! Go over the border.
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