Queensland Election Results - Another Nail In The Rent Cap Coffin

November 6, 2024 Edward Dever

The ousting of the Miles ALP government in Qld at the recent State election makes the prospect of residential property rent freezes and caps in Qld more remote.

In the lead up to the State election, Ch 9 News reported that the now former Qld Government was considering ACT style inflation-linked rent controls. Former Premier Miles said he would have more to say on the issue as the election campaign continued. Nothing seemed to come of this.

At the first Leaders’ debate, the LNP ruled out introducing rent caps. The ALP took a similar stance, making former Premier Miles’ other comments somewhat confusing.

Previously, in June 2024, the Qld Department of Housing, Local Government, Planning and Public Works stated that it believed forms of rent control are generally ineffective.

During the 57th Qld Parliament, The Greens twice attempted to introduce rent control legislation, in each case the relevant Committee recommended against its introduction and the Bills were scrapped.

The Greens were apparently initially targeting 10 seats during the State election campaign . The results leave them with one, and possibly, two seats. One of the seats in doubt is South Brisbane held by Greens MP Amy MacMahon. Counting is still underway. Ms MacMahon introduced the two previous Rent Cap Bills and the loss of South Brisbane to the ALP would remove The Greens’ most outspoken rent cap spokesperson in Qld Parliament.

Federally, even The Greens housing spokesman Max Chandler-Mather is watering down their demands and is no longer insisting on a national rent freeze:

“We don’t need a freeze on rent increases like we’ve said … we could negotiate on some sort of cap to limit the amount rents go up,” he said.

In the lead up to the 2025 Federal election, it is likely that The Greens will continue to campaign on rent caps. Any rent control legislation would, however, need to be passed by the Qld Parliament and the election of the LNP in Qld indicates that passing any such legislation would be a tough sell.

Report No. 7, 57th Parliament, Housing, Big Build and Manufacturing Committee, May 2024

November 2024

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.

Queensland Government Shelves Plans To Amend Property Valuation Laws

May 9, 2024 Edward Dever

Last week, the Queensland Government shelved proposed land valuation amendments under the Land Valuation Amendment Bill 2023.

Resources Minister Scott Stewart pulled the proposed amendments for further consultation and revision, a process which should push out any progress beyond the October 2024 State election. It is not clear whether a future LNP Government (if elected) will proceed with the amendments.

Much of the stakeholder feedback on the Bill centred on the introduction of binding Valuer-General guidelines for valuations with concern raised that there would be no prior consultation and future guidelines could enhance property values resulting in higher land taxes and Council rates.

Also of concern was the proposal to remove the $750,000 threshold which requires a person objecting to a valuation to advise the Valuer-General of the valuation sought. This would require all landowners to state the valuation sought in their objection and would increase the costs of lodging an objection.

Changes to the definition of “unencumbered” were also considered controversial, resulting in uncertainty over how land is to be valued.

Qld land valuation laws shelved by government following input from property industry

May 2024

Greens Target Brisbane LGA Rent Freeze

November 8, 2023 Edward Dever

To date, The Greens have tried and failed twice to implement a rent freeze in Queensland and once at the Federal level. In this latest attempt, 2024 Greens Lord Mayoral candidate Jonathan Sriranganathan plans to implement a two-year rent freeze on residential properties in the Brisbane local government area, backdated to January 2023. This assumes The Greens control Brisbane City Council after the election in March 2024.

To implement their plan, The Greens propose to control rents via penalty rates applied to any investor who raises rents above January 2023 levels. Rental properties where rent has increased would be "reclassified into the new ‘Uncapped rental home’ rating category."

The penalty is an additional 650% of the current rates bill so the total rates bill would be 750% higher following The Greens' market intervention. Using The Greens' example of a unit rented for $750 per week with a rates bill of $1,500 per year, any rent increase would result in an extra rates bill of $9,750, with a total rates bill of $11,250.

Any landlord who has increased rent with the tenant's agreement between January 2023 and the Council election in March 2024 would be penalised, whether that rent increase was less than 1% or 30%.

The Greens' plan is to apply the rent freeze to the property rather than the tenancy and to use median suburb rents for any new build or substantial renovation.

Penalty rates are claimed to be revenue neutral as the Greens contend that landlords will not put up rents. However this ignores the fact that many landlords will have raised rents over the 15 month period prior to the 2024 Council election.

Landlords in Brisbane (and elsewhere in Queensland) are currently subject to an effective 12 month rent freeze following the State Government's amendments to the Residential Tenancies and Rooming Accommodation Act preventing landlords from increasing the rent within a 12 month period.

Rent controls in other jurisdictions (such as Ireland and San Francisco) have resulted in reduced residential rental supply as landlords change use to avoid the controls or sell out of the market. It also acts as a disincentive for new investment builds. (Note that The Greens plan to increase rates for Airbnb-style properties by 1,000%.)

Any developer who views The Greens as potentially controlling Brisbane City Council post-March 2024 is likely to look more favourable at projects outside the Brisbane LGA (e.g. Redcliffe, Logan, Ipswich) rather than risk the imposition of a two-year rent freeze on their projects.

Similar to the Queensland government's proposed (then scrapped) land tax changes, the prospect of a rent freeze throughout Brisbane is likely to alter investors' decisions well ahead of any actual imposition of a freeze.

Lord Mayoral candidate Jonathan Sriranganathan proposes two-year rent freeze in Brisbane

Freeze Rents in Brisbane: No more unlimited rent increases

November 2023

Ineffective Strata Minority Cram Down Rule Creates Problems

October 4, 2023 Edward Dever

The Queensland Government may wish to cast an eye towards NSW before finalising amendments to its strata legislation which will permit 75% of owners to terminate uneconomic community title schemes.

On 24 August 2023, the Body Corporate and Community Management and Other Legislation Amendment Bill 2023 was introduced into the Queensland Parliament. The Bill was referred to the Legal Affairs and Safety Committee for detailed consideration. The closing date for written submissions was a mere nine days later on 2 September. The Qld Law Society raised concerns in their submission regarding the short timeframe.

Under the proposed Queensland amendments, minority unit owners may be forced to sell their units in circumstances where there are economic reasons for terminating the scheme supported by 75% of the scheme owners.

This reform was described as "deliver[ing] a key action of the 2022 Queensland Housing Summit by reforming the BCCM Act to allow for termination of uneconomic community titles schemes to facilitate renewal and redevelopment."

The Bill's Explanatory Notes specifically refer to "having regard to the New South Wales approach."

The only problem is that terminating schemes in NSW has not been that simple with only a handful of schemes apparently managing to negotiate a sale. Developers are now saying they "aren't interested in buying older buildings unless there’s 100 per cent agreement from owners to sell."

Designed to protect the elderly owner from unscrupulous developers, at least in one instance in NSW, the reverse seems to have occurred - protecting a rival developer from the building's elderly owners. The NSW amendments have not prevented strategic blocking attempts by competing developers.

The NSW Minister for Better Regulation and Fair Trading has vowed to fix the glitches. “The NSW government is committed to updating and reforming this system, including fixing the loopholes that have made it out of date."

Perhaps the Queensland Government will revisit its amendments before passing a Bill with baked-in glitches, at least based on the NSW experience.

The Legal Affairs and Safety Committee is due to hand down its Report on 6 October.

This law was meant to solve Sydney’s housing crisis. It’s left owners devastated

Legal Affairs And Safety Committee - Body Corporate and Community Management and Other Legislation Amendment Bill 2023

October 2023

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

Property Costs and Qld's Youth Crime Crisis

February 11, 2023 Edward Dever

A 77 year old woman is allegedly threatened with a knife by a 12 year old at a local shopping centre and told to hand over her car keys. Locking herself in her car, she calls police and the youth and his 13 year old accomplice are soon arrested.

A BMW driver is followed home and allegedly bashed with a hammer for his keys and car stolen.

A 75 year old man is allegedly bashed and critically injured outside the city's main shopping centre just after 5.00pm.

Just another couple of weeks in Queensland's garden city, Toowoomba. 92 cars were stolen in December 2022 with over 700 stolen in 2022. 34 cars were stolen in the first two weeks of 2023.

Youth crime in Queensland is nothing new. I recall helping on a matter as a summer student with a small law firm in the late 1980s. Several teens thought the path to riches was by knocking over the local milkman at 3.00am while he was delivering to a primary school. They escaped with just loose change. Balaclavas knitted by their girlfriends were discarded in a nearby garden. Police driving past a local park the next day were amazed when they stopped next to the youths and one asked "how did you find us so quickly?". They may not have been the brightest in their class.

The apparent escalation in home invasions and car theft in recent years is quite extraordinary. The quest for people's cars and the notoriety of posting one's exploits on social media seems never ending. On the victim side, there are daily reports of multiple break-ins and attempted break-ins by groups of youths. So far, the Government's proposed increased maximum sentences do not seem to have been a deterrent.

Resolving youth crime is a complex task and not my field of expertise. There are organisations trying to turn troubled youths' lives around, including some in Toowoomba. Police say that it is a minority of offenders who continue to flout the law - around 400 offenders across Queensland. Judging by the reports on social media and in the news media, they are quite busy.

One of the most shocking recent images is that of a youth dressed in black and brandishing a machete walking up a suburban driveway in Toowoomba in the middle of the afternoon. That may be one of the defining images of the crisis.

Residential property landlords must deal with the costs associated with break-ins, attempted break-ins and rising insurance costs. Despite low vacancy rates, landlords who wish to retain tenants must consider upgrades to security screens, installing security systems and engaging security services. These costs need to be recovered at a time when landlords face criticism for increasing rents and The Greens attempt to introduce rent freeze laws.

Commercial property landlords face similar security upgrade costs and also risk shoppers going elsewhere. As one commentator said in relation to violent crime in Brisbane's Queen St mall - if people have to look over their shoulder and view every stranger with suspicion, they will simply go elsewhere.

Perhaps that is the dilemma facing the 2023 Toowoomba Carnival of Flowers. Will tourists visit if the city becomes better known for its carnival of crime?

Options for Reducing and Preventing Youth Crime

February 2023

Public Hearings Held On Greens' Queensland Rent Freeze Bill

December 22, 2022 Edward Dever

In 1987, renting a student house at Indooroopilly in Brisbane's western suburbs would set you back $125 per week. That worked out at $33 per week for each of the three larger bedrooms and $26 per week for the small one. Inexpensive housing. Comfortable surroundings with fresh paint and carpet, provided you ignored the termites slowly consuming the downstairs bedroom.

35 years later, the median asking rent for houses in Indooroopilly is $650 per week although that particular house is no longer there. Demolished long ago (along with numerous neighbours) to make way for a car dealership car park.

Public hearings on the Greens' rent freeze Bill were held in Brisbane on 5 December.

Under the proposed Bill, a two year rent freeze will be implemented with the maximum permitted rent being the relevant property's rent on 1 August 2022. Future rent increases (after the two year freeze) are limited to 2% every two years with no end date. There are no plans to implement any form of freeze on expenses such as rates, water rates, land tax etc.

Resolving the current rental crisis is a complex task. However it is not clear that broad-based rent control measures are the answer. Increasing the supply of both public and private rental housing is key. The entire housing stock in that street in Indooroopilly is now lost to commercial development. Rent control measures are likely to stifle private sector housing investment.

Examples elsewhere in the world highlight the housing supply issues associated with strict rent controls.

Ireland’s 2016 rent control measures are considered counterproductive and ineffective and have resulted in a serious lack of supply of residential rental properties available for rent with landlords leaving the market because they are not permitted to charge market rent for their properties.

St Paul, Minnesota is introducing rent control measures from 2023. Ahead of its implementation, the number of building permits issued in St Paul from January 2022 to July 2022 dropped 31.4% compared to the previous four-year average for building approvals.

San Francisco - a Stanford University study in 2017 relating to rent controls implemented in 1994 on small multi-family housing built prior to 1980 found that rent controls reduced residential rental housing supply by 15%.

Qld Parliament rejected the Greens' last attempt to introduce rent control measures in Qld. The Committee is due to table its report on the Bill in February 2023.

Residential Tenancies and Rooming Accommodation (Rent Freeze) Amendment Bill 2022 - Public hearing(s): Monday, 5 December 2022 - Brisbane

December 2022

Queensland Rent Controls Revisited

October 28, 2022 Edward Dever

The Residential Tenancies and Rooming Accommodation (Rent Freeze) Amendment Bill 2022 is The Greens' latest attempt to impose rent controls on residential rental properties in Queensland.

Under the proposed Bill:

- a two year rent freeze will be implemented with the maximum permitted rent being the relevant property's rent on 1 August 2022..

- landlords who shift a property to the short-term accommodation sector during the rent freeze period will be fined over $7,000.

- newly built properties during the rent freeze period are subject to rent caps based on the suburb's median rent.

- future rent increases (after the two year freeze) are limited to 2% every two years with no end date.

There are no plans to implement any form of freeze on expenses such as rates, water rates, land tax etc.

After the furore over the Qld Government's now shelved plans to assess land tax based on combined Qld and interstate land holdings, this Bill is generally flying under the radar

Stakeholder submissions are sought by 31 October 2022.

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

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

October 2022

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

When Do Smoke Alarms In Queensland Need To Be Upgraded?

February 18, 2021 Edward Dever

Queensland residential landlords are required to upgrade smoke alarms in their properties to comply with the updated requirements under the Fire and Emergency Services Act 1990.

Some smoke alarm companies are advising that all upgrades must be completed by 31 December 2021.

As an example:

"This legislation requires all Queensland rental properties to have smoke alarms upgraded by 31 December 2021 and from 1 January 2022, it will be illegal to rent a property that has not been upgraded."

But that is not what the legislation says.

Section 104RBA(2) of the Fire and Emergency Services Act states that the compliance requirement applies where, after 31 December 2021, a new tenancy for the dwelling starts or an existing tenancy for the dwelling is renewed.

For an existing tenancy that is renewed, for example, on 31 March 2022, the compliance requirement applies from that date.

This view has been confirmed with Queensland Fire and Emergency Services (QFES).

This allows landlords to plan upgrades in line with tenancy renewals or vacancies. For some, it may suit to do upgrades during 2022 as tenancies expire or renew.

Ignore the smoke alarm company hype and plan upgrades in line with the legislation. Chat with QFES if you have any questions.

QFES Fact Sheet

Fire and Emergency Services Act 1990

Building Fire Safety Regulation 2008

February 2021