Nine changes to tenancy legislation in 2023

The tenancy regulatory landscape is constantly evolving – and it’s important that landlords and agents keep on top of changes to ensure that they meet their obligations.

Of course, meeting legal obligations is a condition of landlord insurance coverage.

Changes to legislation can also have a flow-on effect on landlord insurance, so that’s why we’re interested in tenancy reform.

This year has seen several changes come into effect – and several state governments propose major reforms.

Here’s a rundown on 10 changes that impact the investment property market:

1. Making it easier to rent with pets

• QLD: At the end of last year, new laws came into effect in Queensland to make it easier for renters to have a pet.
• WA: Renters in WA will be allowed to keep a pet, as part of the state’s proposed tenancy reforms. Landlords will only be able to refuse a tenant’s request to keep a pet with the consent of the Commissioner for Consumer Protection and only when it is reasonable to do so. Landlords will also be able to place conditions on the keeping of a pet.
• SA: SA announced proposed rental reforms which would give tenants the right to have a pet. Under the change, a tenant who applies to keep a pet in a rental property cannot have their request unreasonably refused, provided the tenant agrees to comply with any reasonable conditions imposed by the landlord.
• NSW: The NSW Government is looking at similar tenancy reforms listed above. The tenant will need to ask permission, but the landlord will not be able to refuse without a valid reason.

2. Banning rent bidding

• NSW: Real estate agents in NSW have been prohibited from inviting or soliciting an offer for rent that is higher than the amount advertised for the property since 17 December 2022. In June 2023, the Rental Fairness Bill passed Parliament, extending the ban on soliciting rental bids so it applies to third-party platforms and owners, not just real estate agents.
• ACT: As of April 2023, landlords and agents in the ACT can no longer solicit rent bids, and rental properties must be advertised at a fixed rental rate.
• WA: WA is looking at prohibiting the practice of rent bidding, with landlords and property managers unable to pressure or encourage tenants to offer more than the advertised rent. Under the changes, rents will need to be advertised as a fixed amount and not as a range.
• SA: As part of a slew of proposed reforms, SA is also looking at banning rent bidding.

3. Limiting rent increases

• QLD: From July 2023, Queensland’s rental laws limit rent increases to once a year for all new and existing tenancies (rather than once every six months). The government is also proposing to introduce further reform to attach the rent increase frequency limit to the rental property rather than individual tenancies.
• WA: Like Queensland, the proposed Western Australian reforms would reduce the frequency of rent increases to once every 12 months rather than twice a year.
• NSW: NSW is also looking at rent increases – frequency and limits – as part of proposed reforms. The government is considering prohibiting rent from being increased twice in 12 months simply because a tenant has changed their agreement type. It also proposes to strengthen existing laws such as helping tenants make claims against “excessive” rent increases.

Note: While there has been some debate about the introduction of rent freezes and rent caps in various jurisdictions, at the time of writing (July 2023), no formal proposals to introduce such measures had progressed in any state or territory.

4. Ending no-grounds evictions

• QLD: From 1 October 2022, landlords in Queensland have needed a valid reason to evict tenants.
• ACT: Ending no-grounds evictions came into effect in the ACT on 1 April 2023.
• SA: The SA Government is proposing a change to tenancy legislation which will require landlords to provide tenants with a prescribed reason to end a periodic tenancy agreement or to not renew a fixed-term agreement.
• NSW: Proposed reforms in NSW also include ending no-grounds evictions.
• WA: The WA Government is not proposing to end no-grounds evictions and is retaining ‘without grounds termination’ because of current rental market conditions and to ensure certainty for landlords and investors.

5. Tenants able to make minor modifications

• ACT: From April 2023, tenants in the ACT have had greater freedom to grow their own food and compost. They can plant fruits and vegetables, flowers, herbs, or shrubs, as long as they grow no higher than two metres, and don’t involve removing existing vegetation. Tenants can also have a removable compost bin at the property. These are now classed as ‘minor modifications’ to the property. Tenants must seek permission, and landlords cannot unreasonably refuse.
• WA: Proposed reforms in WA will enable tenants to make certain minor modifications to the rental premises and the landlord will only be able to refuse consent on certain grounds. Renters may be required to restore the property to its original condition at the end of their tenancy.
• SA: As part of a series of proposed reforms, the SA Government is looking at preventing the unreasonable refusal of safety modifications and minor changes including the installation of wall anchors, child safety gates, childproof latches, showerheads, and internal window coverings. Modifications will need to be made good at the end of the tenancy if the landlord requires.
• QLD: The Queensland Government has also proposed reforms that would make it easier for renters to install the safety, security, and accessibility modifications they need, and to help parties negotiate about making minor changes to rental properties to personalise the home.

6. More affordable rental bonds

• SA: The SA Residential Tenancies (Limit of Amount of Bond) Amendment Regulations 2023 commenced on 1 April 2023. Before 1 April 2023, landlords were able to claim residential bonds equivalent to a maximum of six weeks’ rent when the weekly rent was more than $250, with only a four-week bond entitled to be claimed for properties falling below that threshold. In April, the bond threshold was raised to $800 to ensure that, for most South Australian rental properties, only a four-week bond is required. The government is also looking at improving the bond lodgement process.
• NSW: Proposed reforms in NSW include the introduction of a portable bond scheme. The Rental Fairness Bill was passed on 27 June 2023 enabling the design and implementation of the scheme.
• WA: While the proposed reforms in WA don’t reduce the bond requirement, they do streamline the release of security bonds at the end of a tenancy, allowing tenants and landlords to apply separately regarding how bond payments are to be disbursed. Disputes over bonds will also be handled by the Commissioner for Consumer Protection.
• QLD: Queensland also proposes improving the rental bond process to ensure rental bond settings provide appropriate security and parties are transparent and accountable for their bond claims.

7. Minimum standards

• VIC: On 29 March 2023, the electrical safety rental minimum standard was introduced in Victoria. The electrical safety standard requires that rental properties must have modern-style switchboards, with circuit breakers and electrical safety switches installed.
• ACT: On 1 April 2023, a new energy efficiency standard for ceiling insulation in rental homes was introduced in the ACT. New rules were also introduced to support compliance with the new ceiling insulation standard and any future minimum housing standards for rental homes.
• QLD: Minimum housing standards in Queensland are set to apply to new leases entered into from 1 September 2023, and to all tenancies from 1 September 2024.

8. Increasing notice periods

• SA: In response to SA’s record low vacancy rate, the government is proposing to increase the minimum notice to end a tenancy from 28 days to 60 days, so tenants will have more time to secure a new rental property and make the necessary arrangements to move.

9. Land taxes

Okay, not strictly a change to tenancy legislation, but the new land tax in Victoria does impact property investors.

The COVID Debt Repayment Plan will be introduced from 1 January 2024, with temporary levies imposed to help pay off the debt incurred during the “one-in-one-hundred-year event”.

Victorians with more than one property will pay a minimum of $5,000 over the next decade, with a new $500 annual tax for properties with a land value between $50,000 and $100,000.

Those with a second property valued between $100,000 and $300,000 will pay an annual $975 levy and, for landholdings worth more than $300,000, land tax payments will rise by $975 plus 0.1 percentage point of the value of the land over $300,000.

In case you’re wondering, there have been no changes to the NT’s tenancy legislation in 2023.

Tasmania has also not made changes to its main legislation this year.

The state did, however, introduce the Residential Tenancy (Smoke Alarms) Regulations 2022 in December 2022 which provide for the fitting of smoke alarms in all tenanted premises.

With Western Australia, South Australia, and New South Wales currently working through major proposed tenancy reforms, it’s important for landlords and agents to keep on top of any changes that do come into effect.

These changes can have implications for landlord insurance cover – from ending leases (claims for loss of rent or tenant damage can only be lodged after a tenant has been lawfully evicted) to rent increases (can affect premium), changes to bonds (taking a bond is a condition of insurance cover) to minimum standards (policyholders are obligated to maintain the premises) and, of course, in allowing pets (EBM RentCover is one of the few landlord insurance providers that offers pet damage cover – up to $70,000) and property modifications (which affects cover for intentional damage).

Guest Author: This article was written by the team at EBM RentCover and was originally published here.
EBM RentCover is one of Australia’s leading landlord insurance providers.

About Guest Expert Apart from our regular team of experts, we frequently publish commentary from guest contributors who are authorities in their field.