News

The SA Government is currently drafting legislative changes to the Residential Tenancies Act to be put to parliament before year end.  The main focus of the reforms is to provide renters with more security in tenancy and to give protection to vulnerable tenants.

Many of the proposed amendments are minor in nature and much needed.  There are however three major reforms that will really change the landscape between landlord and tenant and I genuinely fear that without great consideration to the practical implications to items 1 and 2, will genuinely disadvantage both tenant and landlord.

 

1.  Amendment of Section 72 - Right of Entry.   

Currently a landlord/agent can enter their rental every 28 days to conduct a routine inspection.  We agree this is excessive and does not allow a tenant to live in peace (I have no idea who would do that anyway!).  The proposed legislation is that this is reduced to 4 inspections only. 

For the large proportion of tenancies, 4 inspections is all that is needed to ensure both landlord and tenant are carrying out their obligations to maintain the property (Trove conduct 4 standard routine inspections per year).  However for many tenancies it is necessary to conduct a 'follow up' inspection when we identify items a tenant needs to remedy.  (Just like we follow up our landlords when there is maintenance that must be attended too)  This is a fundamental and critical part of successful tenancy and property management.  Often we are like the parents teaching first time renters in their obligations who become WONDERFUL long term tenants. 

We are educators of both tenants and landlords in their responsibilities under the tenancies act which we aim to do in a positive way.    This change in legislation will force us to send a tenant a Form 2 Notice to remedy breach which by its very nature can be really distressing for a tenant to receive, and fundamentally will erode the trust and good relationships we are trying to form. 

Trove and REISA are opposed to this change and as a very minimum suggest that the legislation allow for an additional 4 'follow up inspections'.

 

2. Amendment of Section 83 – Termination by landlord without specifying a ground of termination

Currently, when a lease is nearing the end of its term, the landlord can either terminate the tenancy providing 28 days notice, or negotiations can be undertaken to 'extend' the lease.  Under the proposed reforms a landlord would only be able to terminate a lease under the following prescribed reasons;

• You are selling
• Landlord is moving in
• Conducting major renovations/demolition (cannot re advertise the property for 6 months)
• A tenant has engaged in illegal activity
• A tenant is harassing, threatening or abusing a property manager, landlord or neighbour

We understand tenants require more security of tenure for many reasons, and agree that more than 28 days notice to terminate their lease - particularly in the current climate where securing another affordable rental is exceptionally difficult should be provided.  However we must explore more ways to achieve this goal.

This proposed change fundamentally erodes the very essence of a lease and its terms and dramatically affects a landlords control over their investment.  There are so many reasons a landlord currently chooses to terminate a lease at lease end that have not been taken into consideration in the above proposed prescribed reasons such as;

• The property despite many follow up inspections is continually poorly maintained
• Non accidental property damage that has not been remedied appropriately
• Suspected but not proven illegal activity
• Neighbourhood disputes
• Continual denied access
• Continual rent arrears
• Subdivision of the property
• Improvements that will increase return (painting, carpets, kitchens etc) that are cheaper and more effectively done when the premises is vacant

Under this proposed amendment, it would appear that a landlord will only be able to terminate in the event the tenat is 'in breach' meaning a Form 2 Notice would be required to be served to the tenant, then an application to SACAT to determine if the lease can be terminated.  Once again eroding the fundamentals of a tenancy agreement and the positive relationships we are trying to create.  Not to mention the stress and uncertainty for all parties.  I am very fearful a termination of lease by this manner (effectively an eviction) may provide tenants with an undesirable tenancy history - particularly as landlords will be even more stringent in reference checking as leases become harder to manage!  This will make it even more difficult for many to secure suitable housing.  How is that helping the very people that need assistance the most? 

Once again Trove and REISA are fundamentally opposed to this change.  I simply don't see this as positive reform and further consideration to the practical application of this reform is urgently needed.

  

3. Renting with Pets

Under the proposed changes a landlord will not be able to 'reasonably withhold' approval for a pet.  According to information provided by REISA, just over 50% of tenancies in SA currently allow pets (data secured from REISA tenancy leases).  My understanding is that just over 60% of SA households have pets.  I really do not understand the need to eliminate a landlords ability to approve or deny a pet in their investment property given these statistics.  

The good news is, many further amendments to this proposed legislation are likely to be included giving the landlord reasonable reasons to deny, and provide conditions such as the pet must be outside, to a tenancy.  Whilst I oppose the reform (as does REISA) should this legislation come forward,  I believe with the added clauses this is manageable and does not pose much risk to landlords or tenants.

 

Whilst I understand the need for reform and security for tenants, legislative change must protect the rights of both landlords and tenants.  With only 3.8% of housing in Australia provided by government (Census 21) compared to 15%-20% in many developed countries, it is clear we need more public and private investor housing urgently.  In particular to house disadvantaged and low affordability tenants.  However, the reality is not all tenancies are perfect and we must have the tools to be able to manage the vast array of situations that occur effectively.

In summary, I believe it is crucial for Government to give much further consideration to points 1 and 2 above.  I have personally met with the Minister Andrea Michael's office and provided submissions, as have many within our industry along with REISA and we sincerely hope goverment will take our reccomendations seriously.

I look forward to keeping you informed as this process continues.