The ACT Government could reform the law to make rentals fairer and safer for tenants, Attorney-General Shane Rattenbury announced today.
The government would amend the Residential Tenancies Act 1997 to end no cause evictions, preventing landlords from evicting tenants without cause with six months’ notice, instead ensuring security of tenure and stopping retaliatory evictions; to restrict rent bidding, an artificial mechanism for landlords and agents to drive up property prices; to mandate minimum standards, ensuring rental properties are accessible, safe, and clean; and even to encourage tenants to grow their own food, create vegetable gardens, and compost, so long as they restore the property to its original condition when their lease ends.
The public can comment on the discussion paper until September. Mr Rattenbury is already drafting legislation, which he hopes to put before the Legislative Assembly late this year or early next.
Almost a third of Canberrans rented, Mr Rattenbury said, and there was a lot of pressure to get and hang onto rental properties.
“In a tight rental market like we have now, tenants are fearful of raising concerns about properties,” Mr Rattenbury said. “We need to make sure they’re able to assert their rights and give them greater confidence as renters that they’ll be looked after, they’ve got somewhere decent to live.”
Renters’ associations and welfare groups have welcomed the proposed changes.
ACT Council of Social Service (ACTCOSS) welcomed the proposals; they had called on the ACT Government to strengthen the Act to protect renters. “Given the ACT’s acute housing crisis, we are seeing rents skyrocket and historically low vacancy rates,” CEO Dr Emma Campbell said. “This puts private renters at risk of exploitation through no-cause evictions and unfair practices when letting properties.”
Joel Dignam, executive director of Better Renting, thought these reforms were necessary. “So many more people are renting long-term in Canberra; maybe laws that might have made sense when renting was temporary for most people don’t make sense for a lot of people raising children and trying to make a home in the rental sector.”
But property investors fear they could lead to fewer properties and higher rents; in a worst-case scenario, almost 10,000 properties could be removed from the market, according to Michelle Tynan, CEO of the Real Estate Institute of the ACT (REIACT).
“For many investment owners in the ACT, these measures and other proposed changes could be the straw that breaks the camel’s back,” she said.
Changes to the Residential Tenancies Act in 2019, increasing land tax and rates had made it too onerous for many investors to have a rental property in the ACT.
“The proposed changes could be seen as further erosion of their rights as property owners and therefore they will simply sell. Given the current market conditions in the ACT, for many, this will be a very attractive alternative.”
REIACT wants the ACT Government to establish a committee to investigate and provide fully costed recommendations to government. “Without a minimum EER rating or policy direction, the most balanced outcome for both tenants and rental providers cannot be achieved,” Ms Tynan said.
Mr Rattenbury disagreed that reforms would lead to a smaller, more expensive rental market. He expected landlords would come into the market, whether as a financial investment or because owners went overseas or interstate. “People see this as an opportunity.”
Mr Dignam was also sceptical of Ms Tynan’s claims. “Every time rental reform is debated, we see this fearmongering from property investors – that there will be a huge shock and it won’t be profitable anymore. It simply never eventuates.”
End no cause evictions
Landlords can evict tenants on a month-to-month lease with six months’ notice without cause, Mr Rattenbury said. Many tenants fear retaliatory eviction if they raise concerns about the property, seek maintenance, or assert their tenant rights. Ending no cause evictions will create security of tenure for renters and stop retaliatory evictions, he believes.
Better Renting had campaigned for an end to unfair no cause evictions for many years, Mr Dignam said. “People will have greater confidence they can stay in their home, and that if they’re made to leave their homes, there will have to be a decent reason.”
However, Ms Tynan (REIACT) believes Mr Rattenbury’s consultation paper does not protect landlords from retaliatory tenants. The current six-month notice period was the most generous in Australia, she said; removing the clause would only require lessors to provide two months’ notice.
Restrict rent bidding
As the law stands, Mr Rattenbury said, landlords or agents can tell prospective tenants that someone else has made a better offer, and ask them if they want to outbid.
“Rent bidding is simply a mechanism to drive up the property prices. That is highly problematic,” he said. Tenants feel the process is not transparent, and that they have wasted their time. “They’re going for a house; they’re not sure if they’re actually in the game.”
While rent bidding does not occur regularly in the ACT, the government wants to hear from Canberrans why and if rent bidding should be regulated.
“Removing rent bidding is potentially a mechanism to help take some of the heat out of the rental market in the ACT, and give tenants a solid footing, knowing they’re in the game with a chance,” Mr Rattenbury said.
Mr Dignam considered this an essential reform. “With such a tight rental market, people have been pushed to pay exorbitant rents simply because they’re desperate to find a place to live. We don’t want to see rents set by who’s the most anxious person trying to secure a property. Doing something about rent bidding will hopefully bring a bit more sanity to the rental market.”
Minimum standards
The ACT’s basic minimum standards for rental properties could be improved and made clearer regarding accessibility, amenity, security, and sanitation, Mr Rattenbury believes.
Joel Dignam agreed: “The risk in a tight market is people can get pushed into properties that are not really fit to be rented out at all; when there’s such competition between renters, there’s no market pressure on landlords to improve. Having some minimum defined law will make sure that just because you’re paying lower rent, it doesn’t mean you end up in a place that puts your health or your safety at risk. No-one should have to end up with a toilet that doesn’t work and a leaky ceiling.”
The government wants to hear from landlords and tenants what minimum standards they believe should be introduced in the ACT, and how they should be implemented, Mr Rattenbury said.
Dr Campbell (ACTCOSS) welcomed this proposal. “Too often we hear of private rental properties in poor repair, but the insecure nature of tenancies and the vulnerability of tenants means that tenants are not able to hold landlords to account and ensure that properties are well maintained.
“It is important to ensure that tenants can easily rely on this legislation for protections without incurring significant legal costs or risk reprisal through rent increases or eviction.”
However, Ms Tynan (REIACT) fears these changes could have “very wide and damaging consequences”. If minimum standards were imposed, according to a survey, 21% of providers would remove their property from the market and 59% would increase rent if they had to improve their properties. In a worst-case scenario, 9,861 properties would be removed from the market.
The government also said it will introduce minimum standards for energy efficiency. Dr Campbell noted that 36% of ACT residents live in homes that perform poorly in heatwaves, and low-income households spend a greater proportion of their income on energy than the average household.
“We need to ensure that low-income renters have well-insulated and efficient homes so that they are not forced into energy poverty through high energy bills,” she said.
Greater freedom for tenants to grow their own food
The government wants to strengthen renters’ rights to create vegetable gardens and composts, so long as they restore the property to its original condition when their lease ends, Mr Rattenbury said. Reforms would let tenants garden, compost, and grow their own food, and give landlords protection that their property would be looked after.
“It’s a great way for people to spend their time. People are doing more at home during some of these stay-home periods, and there’s real enthusiasm for growing your own food. We want to make sure that tenants have those opportunities just as much as people who own their own homes.”
What else can the government do?
The ACT government should better monitor the property investor landscape in the ACT, and introduce a register certification scheme, Mr Dignam believes.
“Enforcing compliance would be so much easier if the government had a better grip on who’s renting out property and what those properties are. Tens of thousands of people in Canberra live in properties with very little government oversight.”
The federal government should provide more support for social housing, Mr Dignam believes.
“There’s simply not enough places out there; the profit-oriented market’s not delivering for these people. Everyone needs a place to live, and the Commonwealth’s the one who’s got pockets deep enough to realise that. The real abdication of responsibility is leaving people homeless. The sooner there’s change, the better.”
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