Potential Reform to Qld's Annual Rent Increase Frequency Limit

July 17, 2023 Edward Dever

In April 2023, the Queensland Government amended the Residential Tenancies and Rooming Accommodation Act 2008, with effect from 1 July 2023, to prevent landlords increasing rent more than once in each 12 month period. The reform was enacted with little industry consultation and bypassed Parliamentary Committee review.

One apparent consequence of this reform has been the eviction of tenants by some landlords so that rents can be increased with greater frequency. This is despite no fault evictions being heavily restricted under previous reform amendments in October 2022.

The Government now proposes that the rent increase restriction apply to the property rather than the tenancy agreement.

It is not clear how widespread the practice of no fault evictions to circumvent the rent increase restriction has become and whether it is limited to the period up to 1 July 2023, the reform's effective date. As the Qld government points out, in other States, the rent increase restriction generally applies to leases not the property. This does not appear to be a widespread issue in those States.

The deadline for feedback on the latest rent reform proposal is 11 August 2023.

Discussion Paper - Ensuring the annual rent increase frequency limit is effective

July 2023

The content of this publication is intended to provide a general overview on matters which may be of interest. It is not intended to be comprehensive. It does not constitute advice in relation to particular circumstances nor does it constitute the provision of legal services, legal advice or financial product advice.

Greens' Nationwide Rent Freeze Proposal - Update

June 29, 2023 Edward Dever

Federally, The Greens continue to push for a nationwide rent freeze as part of a deal to pass the Federal Government's housing Australia future fund package.

Their proposal involves the Federal Government providing additional funding to States which impose rent freezes on residential rental properties.

Broadly, as outlined in the Qld Bill, The Greens seek to impose a nationwide two-year rent freeze on residential property rents followed by maximum rent increases of 2% each two-year period thereafter.

Federally, The Greens have indicated they will compromise on these restrictions.

Qld Parliament's Community Support and Services Committee recommends that the Qld Bill not be passed.

In NSW, The Greens have now introduced a similar Bill. However, the NSW Premier has declared that rent freezes are off the table.

The Qld Bill freezes rents as at 1 August 2022 (which seems impractical). The NSW Bill targets 30 June 2023 as the rent freeze date.

Unlike the Qld Bill, the NSW Bill does not deal with the post-two year rent freeze period. The Greens plan to use the two year period to develop and implement "a radical, and much needed, reshaping of our rental and housing system."

UNSW has also released commentary on The Greens' rent freeze proposal.

Dr Peter Swan contends that the rental crisis would become “far worse for tenants and landlords” if the policy came into force.

“While it is true that tenants who are not evicted may gain temporarily, tenants as a whole lose as rental accommodation is withdrawn, fewer new places are provided, and maintenance of rent-controlled housing deteriorates."

The Greens often cherry pick facts. They claim that, during Covid, commercial rents in some States were frozen as justification for their proposal. But they fail to point out the rates and land tax assistance which was provided to commercial landlords during this period.

The Greens also highlight rent control examples in San Francisco and Ireland but fail to publicise the studies that show the impact these rent controls have had on rental housing supply.

A chief criticism is that the proposal fails to address how landlords will deal with cost increases during the rent freeze period. Many of these costs, such as insurance, are increasing well above CPI.

The Greens also fail to recognise the likely impact of a rent freeze - landlords would sell off properties (which may benefit some first home buyers in the short term) or switch property use to schemes like Airbnb to circumvent the rent freeze. The more significant impact would be a decrease in new investment home builds against an increasing population through natural birth and interstate and international migration. The Greens want more public housing but it is not clear that any increase in public housing would offset the deficit left by investors leaving the sector.

Qld Residential Tenancies and Rooming Accommodation (Rent Freeze) Amendment Bill 2022

NSW Residential Tenancies Amendment (Rent Freeze) Bill 2023

UNSW - Would you benefit from a rent freeze?

June 2023

Stage 2 Rental Law Reform - Have Your Say

April 28, 2023 Edward Dever

The Queensland Government has released its Options Paper for 5 priority areas under the Stage 2 rental law reform.

The priorities identified for Stage 2 are:

- installing modifications

- making minor personalisation changes

- balancing privacy and access

- improving the rental bond process

- fairer fees and charges.

The deadline for feedback on the Options Paper is 29 May 2023.

Stage 2 rental law reform

Meanwhile, the Queensland Government has bypassed Parliamentary Committee review of its proposals to limit rent increases to once in each 12 month period, by apparently attaching amendments to the Local Government Electoral and Other Legislation (Expenditure Caps) Amendment Bill and passing the amendments on 18 April 2023.

Under the amendments to the Residential Tenancies and Rooming Accommodation Act 2008, with effect from 1 July 2023, any rent increase after that date will only be valid if it has been 12 months since the previous rent increase.

More frequent rent increases written into tenancy agreements prior to 1 July 2023 will not apply. The restriction applies to all new and existing tenancies.

Once in effect, rent may only be increased within a 12-month period if there is a new tenancy agreement and none of the tenants are the same as those on the previous agreement. The 12 month minimum period continues to apply regardless of a change to the rental property owner or manager.

Changes to rent increases to give Queenslanders who rent a fair go

April 2023

Queensland Government Opts For Low Impact Rental Reform

March 30, 2023 Edward Dever

In a move which brings Queensland in line with States such as Victoria and South Australia, Queensland landlords are to be limited to varying rent on a residential rental property once in each 12 month period.

The reforms are low impact as many landlords use 12 month leases and do not elect to include a rent increase provision in the lease. For any such landlords, the reforms should have no impact.

For landlords who have generally increased rents on a six monthly basis, they will now only be entitled to do so once per year. The reforms should therefore slow the rate of rent increases on these properties.

Limiting rent increases in this manner falls far short of the Greens' Rent Freeze Bill currently before Queensland Parliament. That Bill seeks to impose a two-year rent freeze on residential property rents throughout Queensland (with effect from 1 August 2022) followed by maximum rent increases of two per cent each two-year period thereafter. Queensland Parliament's Community Support and Services Committee has recommended against passing this Bill.

After floating the prospect of some form of rent cap, the Queensland Premier has walked back on this suggestion, preferring for the moment to merely restrict the timing of rent increases.

Further details of these changes are still to be released. It also remains to be seen if there will be any unintended consequences of the reforms.

Rent stabilisation to give Queenslanders who rent a fair go

March 2023

Greens' Rent Freeze Bill Likely To Be Put On Ice

February 24, 2023 Edward Dever

On 20 February 2023, Qld Parliament's Community Support and Services Committee released their Report on the Residential Tenancies and Rooming Accommodation (Rent Freeze) Amendment Bill 2022.

You can find the Report here - Community Support and Services Committee Report

The Committee recommends that the Bill not be passed.

The Rent Freeze Bill seeks to impose a two-year rent freeze on residential property rents throughout Qld (with effect from 1 August 2022) followed by maximum rent increases of two per cent each two-year period thereafter.

In view of the experience in countries such as Ireland, imposing a broad rent freeze does not appear to be a workable solution to the current rental crisis.

In the past, the Qld Deputy Premier has downplayed the need for rent freeze legislation, saying "it was the government’s preference to avoid enforcing new laws to curb the greedy behaviour."

It is clear that some landlords and agents in Qld are forcing excessive rent increases on tenants - far above the current rate of inflation or reasonable cost increases. Landlords would argue that rents in some areas were static for years and the rent increases are just a catch up as rents rise everywhere. This is little comfort for tenants bearing the burden of the rent increases.

Increasing rental housing supply (both private and public) is a solution but will take time, particularly in view of declines in residential investor lending as interest rates increase.

Perhaps the Residential Tenancies Authority (RTA) needs more teeth in determining what is fair in terms of rent increases. Currently, a tenant in Qld can use the RTA's conciliation service or QCAT to dispute a rent increase.

While the Greens seem destined to lose this round, the failure to exercise restraint by landlords may ultimately lead to some form of temporary government intervention.

February 2023

Pets in Apartments - NSW Update

July 27, 2021 Edward Dever

Some interesting comments in the post-Cooper March 2021 decision in McGregor v The Owners – Strata Plan No 74896 [2021] NSWCATCD 1.

This NCAT matter involved the refusal by an owners corporation for a dog to be kept in an apartment block which was part of a larger complex, each block with separate by-laws and all subject to a community management statement.

The applicant dog owners were self represented. And that was probably their downfall.

The by-laws expressly prohibited dogs but not other pets such as cats, with an exception in the townhouse by-laws for small dogs which were permitted in the townhouse section of the complex.

The applicants placed significant reliance on the decision of the NSW Court of Appeal in Cooper. In that case, the effect of the Court’s decision was that a “blanket ban” on the keeping of pets was “harsh, unconscionable or oppressive”.

The applicants' prime application was misconceived as it sought relief under Section 157 of the Strata Schemes Management Act which allows the Tribunal to approve a pet where the by-laws permit a pet with owners corporation approval and that approval has been unreasonably withheld. Neither of these conditions was met.

The applicants also chose the wrong by-law to request the Tribunal to declare as invalid. The applicants should also have included the Community Association as a respondent.

In the circumstances, it was not necessary for the Tribunal to consider the effect of Cooper on the relevant by-law but the Tribunal did note that the by-law did not, in any event, constitute a “blanket ban” of the type considered in that decision.

It will be interesting to see whether other owners corporations seek to distinguish Cooper on the basis that their by-laws, while prohibiting dogs, do not prohibit other animals.

July 2021

Queensland Tenancy Reforms Draw Near

July 8, 2021 Edward Dever

On 18 June 2021, the Qld Government introduced the Housing Legislation Amendment Bill 2021.

The Bill sets forth the long awaited reforms of tenancy legislation which were the subject of a lengthy public consultation process.

Part of the draft reforms relate to tenants' rights regarding pets.

It was expected that Qld would follow the southern States approaches.

The Bill falls short of Victoria's keeping pets as of right approach . (The Qld Greens Private Member's Bill is closer to the Victorian model.) Further, Qld strata schemes would be entitled to use their by-laws to restrict pets which seems contrary to the position in NSW following the Cooper case.

It is not clear at this stage whether a blanket 'no pets are allowed' strata by-law will be acceptable to the Qld Government given that a landlord will be unable to use 'no pets are allowed' as grounds for refusing pets. But it seems unlikely.

Proposed Section 184E(1)(f) is quite broad. However, the days of complete strata pet bans seem over and not destined to make a return.

The Qld Government may take the view that QCAT (or an appeal court) will confirm that the use of blanket no pet by-laws in Qld strata schemes is "oppressive or unreasonable" and therefore adopt a similar approach to the NSW Court of Appeal in Cooper. In the past, strata by-laws that have prohibited pets have been ruled as oppressive and unreasonable by QCAT and, prior to that, by the CCT.

This may be the reason the Qld Government has not moved to amend the Body Corporate and Community Management Act 1997 to exclude no pet by-laws and align this Act with the prohibition on complete pet bans in Section 184D(5) of the Bill.

The Bill has been referred to the Queensland Parliament Community Support and Services Committee with a report due by 6 August 2021.

The closing date for written submissions to the Committee is 12.00pm, Tuesday 13 July 2021.

Participate in the Committee process

Housing Legislation Amendment Bill 2021

Housing Legislation Amendment Bill 2021 - Explanatory Notes

Greens Private Member's Bill - Residential Tenancies and Rooming Accommodation (Tenants’ Rights) and Other Legislation Amendment Bill 2021

Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250

July 2021