The community consultation period has begun on a draft bill to end no-cause evictions in the ACT, with tenancy lobbies saying it’s a “good step” while the Real Estate Institute of the ACT (REIACT) is “concerned”.
The draft of the Residential Tenancies Amendment Bill 2022 was released on Wednesday 27 July, by the ACT Government. If passed, the bill will make it an offence for a landlord or agent to solicit rent bids, it will ensure minimum standards for rental properties are strengthened, and will make it easier for tenants to grow food on a rental property.
ACT Attorney-General Shane Rattenbury said this bill will “modernise tenancy laws” and create “more secure housing and a fairer rental system” in the ACT at a time when rental affordability and availability is worsening.
“The bottom line is people deserve a home to live in and shouldn’t be evicted without a legitimate reason. The ACT Government has committed to end no-cause evictions to help address the power imbalance that currently exists between landlords and a tenant,” Mr Rattenbury said.
“During our community consultation on tenancy reforms late last year, we heard from tenants that removing no-cause evictions will give them better security of tenure and greater confidence to assert other tenancy rights without fearing eviction.
“We certainly have had reports of retaliatory evictions where tenants have sought to have maintenance, improvements, or raise complaints with landlords, and shortly afterwards they’ve had their tenancy ended.
“This legislation seeks to correct that balance to create more power equality between landlords and tenants but, at the same time, allowing landlords to continue to manage their property in ways that are appropriate,” he said. “… simply ending it [tenancy] because they don’t like the tenant, or the tenant has sought to exert their rights is not an appropriate reason for ending a tenancy and that’s why we are making this key change to the ACT Tenancy laws.”
Mr Rattenbury rejected suggestions from landlords that their rights will no longer be protected without the option of a no-cause eviction.
“I would say landlords, under the existing legislation, there are already a series of grounds that are legitimate grounds for ending a tenancy and also there is a new provision being inserted into the legislation where if there is intimidating, harassing, or inappropriate behaviour, then an application can be made to ACAT [ACT Civil and Administrative Tribunal] to recognise that that is a reason to end the tenancy,” he said.
“That’s obviously a bit of a subjective measure, and people have different views on that, and that’s where ACAT is the independent umpire and will play a really important role in interpreting that legislation.”
One heavily traversed section of the draft bill is the proposal to prohibit agents or landlords soliciting rent bids.
After consultation and feedback from real estate agents, landlords, tenancy advocacy groups, and tenants regarding rent bidding, Mr Rattenbury said the government has “drawn a line”.
“People shouldn’t be encouraged into a price war when they’re searching for a place to rent. This proposal ensures that agents and landlords can’t solicit bids to pit renters against each other and raise the rental price. That’s not a fair system,” he said.
“We’ve said landlords and real estate agents cannot seek rent bids, they cannot encourage it, but if respective tenants want to put forward a higher offer because they really want that property or they feel they can afford that, then they should not be constrained from doing it.
“Clearly, some tenants will not be able to participate in a rent bidding process and will struggle to match others, but for those tenants that particularly want a property, were able to afford it, we have formed the view they should be able to make that offer if they would like to.
“For tenants who are less able to afford that, there are other measures we need to put in place and that includes greater investment in public housing and other issues that will seek to support that end of the market,” Mr Rattenbury said.
“The government also needs to make sure that we step up to the plate and create more social and affordable housing so we can provide rental properties right across the spectrum of income brackets here in the Territory.”
Under the new laws, landlords will be required to disclose whether their property meets the minimum rental standards, and tenants will have the right to seek compensation, rent reductions, or an end of tenancy if the standards are not met.
“The first standards will be energy efficiency standards for rental properties, which will require a minimum standard for ceiling insulation. This won’t commence until late 2022 and landlords will be allowed an extensive phase-in period to understand the changes and make arrangements,” Mr Rattenbury said.
Better Renting welcomes changes for vulnerable renters
Director of Better Renting, Joel Dignam, said these changes will make it easier for the over 50,000 renters in the ACT to have a secure and stable home.
“We’ve heard from so many people who talk about the cost of forced moves, not just in moving vans and lost income, but in the mental burden of never feeling like you can put down roots. Ending unfair evictions and requiring a good cause to end a tenancy is an essential step to ensure people can feel secure in their home,” Mr Dignam said.
“In addition, these changes will make it possible for people to exercise other rights without fear of retaliation. For example, we know of a pensioner who opposed a rent increase because it was excessive.
“That person later got a no grounds notice to vacate. This was retaliation, pure and simple. It should not be allowed, and, with these changes, it will not be allowed. Landlords should follow the law.”
While Mr Dignam was pleased with the ending of no-cause evictions, he said tenant advocacy groups are “worried about the abuse of ‘with cause’ termination notices”.
“Compensation should be payable when a lessor terminates a tenancy and the tenant isn’t at fault. This would discourage frivolous terminations and help to address the significant cost burden that a landlord imposes when they end a tenancy,” he said.
“On the other hand, tenants will now have access to compensation for wrongful eviction, and better rights to protest retaliatory evictions.
“Despite this positive action on evictions, a gap remains around rent bidding. Agents can still accept offers above the asking price from renters, which will continue to cause anxiety and disadvantage vulnerable renters. A measure to stop landlords or agents from accepting rent bids would have been a better solution here.”
REIACT says tenants will be the ‘biggest losers’
While Mr Dignam is pleased to see renters have a more secure and stable home, REIACT is “concerned”.
REIACT CEO Michelle Tynan said there is no simple answer to this national housing crisis, but these changes by the ACT Government will push many renters into homelessness.
The ACT Government didn’t adopt any of the recommendations from REIACT into the draft Bill during the first round of consultations, and the organisation said the proposed amendment will have “unintended consequences”.
Ms Tynan said that Victoria and New Zealand implemented similar changes into legislation, which have led rental providers to leave the market as it is now “too hard” to maintain and sustain their investment properties.
She added that in Victoria, there have been delays of up to 22 weeks for people in a tenancy dispute waiting for a VCAT hearing due to the “crippling backlogs”.
“Since 2017, when changes to the New Zealand residential tenancy requirements for minimum standards were introduced, there has been a reduction in available rental properties in some jurisdictions of up to 50 per cent. Again, landlords have sold their investment properties due to the onerous compliance requirements and sentiment that they have had their rights as owners slowly eroded with the implementation of each new legislation mandate,” Ms Tynan said.
Furthermore, she said the ACT’s vacancy rate will also suffer.
“The Western Australian Government is now looking to introduce similar changes into their Residential Tenancies Act,” she said.
“A survey of 7000 investors by the state’s peak body rang the alarm following the publication of the results, which revealed that 61 per cent of the investors would exit the state’s rental market if major changes to Western Australia’s residential tenancy laws were adopted.
“If this survey is indicative of investors nationally, for the ACT, this would see over 26,000 investors leave the market.”
Ms Tynan said the commentary surrounding the announcement that “landlords in the ACT ‘now need to move with the times’” and if they cannot afford to improve their investment property to a minimum standard, they shouldn’t be in the market, is not the reality.
“The ideology of this sentiment is admirable; however, the reality is very different. The biggest losers, as now seen in other jurisdictions, is tenants,” she said.
“The Real Estate Institute has lobbied on behalf of its members, for fair and achievable outcomes within this legislation draft. It has warned the ACT Government of these unintended consequences…
“To mandate this magnitude of change to legislation, based on just over 700 respondents to a survey, which has a base of over 43,000 investors and 55,000 renters is irresponsible and careless by the Attorney General,” Ms Tynan said.
ACTCOSS worries public housing tenant protections will be weakened
The ACT Council of Social Service (ACTCOSS) has expressed grave concerns the proposed tenant changes will weaken the rights and protections of Housing ACT tenants through the introduction of separate termination provisions.
According to ACTCOSS, these new provisions will allow the Commissioner for Social Housing to evict tenants.
ACTCOSS CEO, Dr Emma Campbell said “the proposed protections against ‘without cause’ evictions for private rental tenants responds to advocacy by ACTCOSS, ACT Shelter, Better Renting, Tenants Union ACT and others”.
“We welcome these additional protections for private renters. Tenants should be able to be make their rental property a secure home, relying on robust and enforceable rights to privacy, quality, security of tenancy and usage.”
ACTCOSS revealed the Bill will make it easier for the ACT Government to further reduce public housing tenants’ rights through the mechanism, and they will be left with fewer protections and rights than private tenants.
“Housing ACT should be held to the same standard as private landlords. Through the Growing and Renewing Program, Housing ACT has shown that it is willing to ride roughshod over the rights of vulnerable tenants,” Dr Campbell said.
“This is a further worrying development with the ACT Government proposing legislation to make it easier for Housing ACT to evict vulnerable Canberrans.
“In the initial consultations for this legislation, the housing and community sector highlighted concerns about the potential for weakening the rights of public housing tenants.
“We urge the Attorney General and the ACT Government to listen to the experts and to ensure that public housing tenants are afforded the same protections and respect as private rental tenants.”
Consultation on the proposed reforms is open until 26 August, with the exposure draft bill available for comment and feedback on the ACT Government’s YourSay website.
The exposure draft bill is set to be tabled in the ACT Legislative Assembly in early August.
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