“Many property managers and real estate agents dread going to ACAT as they feel that not only is the law against them but the tribunal tends to favour the tenant most of the time,” writes BILL STEFANIAK.
THE ACT Residential Tenancy Act is the most tenant-friendly legislation in Australia and, if the Greens have their way in the new Assembly, landlords will face even further impediments, which will probably lead to reduced investment rental properties.
I say this as someone who has been both a tenant and a landlord, and as the former appeal president of the ACT Civil and Administrative Tribunal (ACAT) where I heard and conferenced more than 1000 landlord and tenant disputes from 2009 to 2015.
I still appear for clients in residential tenancy matters at ACAT. As well as this, I was the ACT Housing Minister from 1995 until 1998.
Luckily, the majority of landlords and tenants are reasonable people who sort out any issues they might have in a mature way and don’t need to go to ACAT.
However, in my experience those that go to a hearing involve tenants who were often not at all reasonable. In a minority of cases, it was the landlord who was the problem.
In the ACT, tenants have many protections under the law. Even if they don’t pay their rent, it still takes time and effort to evict them. If they are disruptive to their neighbours it can be especially hard to evict them.
Over the last 18 months I have given talks to many property managers and real estate agents and they dread going to ACAT as they feel that not only is the law against them but the tribunal tends to favour the tenant most of the time.
Whether that perception is correct or not, the ACT certainly has the most tenant-friendly laws in the country and tenants can get the services of a lawyer to represent them for nothing – from Canberra Community Law if they are in public, community housing or supported accommodation, or from ACT Legal Aid if they are in the private market.
There is no free advice and/or representative legal service available for landlords and I see the Greens want to give even more resources to tenant services. It is not a level playing field and will only get worse if the Greens have their way.
Unlike other states and the NT, a landlord in the ACT can’t lease a property for 12 months and then have the lease terminated.
The lease automatically goes on to a month-to-month periodic tenancy and the only way a landlord can end the tenancy is if they or a close family member move into the property, if the property is to be sold, if substantial renovations must be undertaken or after six months has elapsed for no-cause terminations, which the Greens seem hell bent on getting rid of.
The period of notice for a no-cause termination in all other states is usually no more than two months except for NSW (three months) and the ACT and Victoria (six months).
I have seen first hand a number of tenancies that just don’t work and while a tenant only has to give three weeks’ notice to end a periodic tenancy, a landlord has to give six months. It is not a level playing field.
Eighty per cent of ACT landlords are mum-and-dad investors with one property; they are tradies, nurses, police officers, teachers, small business owners trying to put something away for their retirement. They are not inner-city trendies living off the public purse with dual incomes of $200,000 plus each, or rich business people with multiple properties. If they have to put up with a dud tenant and can’t end the tenancy they stand to lose their property and in some cases even their family home, especially if the property is heavily mortgaged which is often the case.
If the Greens have their way, a landlord will never be able to end a tenancy provided the tenant pays the rent and the landlord does not wish to sell or move back in themselves.
Rather than get rid of no-cause terminations, the ACT Assembly should decrease the time to three months to bring us in line with NSW.
The Greens also want to make all rental properties energy friendly, but how are mum-and-dad landlords going to afford the $20,000 to make their 1970’s ex-govie energy efficient?
Might I suggest a scheme to overcome this; renovations could be paid from taxpayer funds and when the landlord sells the property, the amount the government has spent (plus any CPI increases that may be applicable) has to be paid back from the sale proceeds.
I sound an ominous warning to the Greens and Labor – most of the landlords I have represented over the last 18 months have seriously considered selling their investment property as they feel the law is all in the tenant’s favour.
If the Greens’ scheme goes ahead, why would anyone in their right mind invest in residential rental property in the ACT when interstate it is a much more level playing field for landlords and tenants – and the rates and charges are half that of the ACT.
Bill Stefaniak is a former Liberal ACT Housing Minister and was the inaugural appeal president of ACAT.