Greens’ plans threaten Canberra’s rental stock

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“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. 

Bill Stefaniak. Photo: Holly Treadaway

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.

 

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1 COMMENT

  1. “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.”

    Why shouldn’t this be the default position in legislation? If they are looking after the property and doing the right thing, then why shouldn’t the default be a lease just can’t be ended for no reason without either a long lead time, or for a genuine reason (those being the two main ones). After all, the impact on the person actually using the property as a home is far greater than the impact on the landlord of not just being able to kick someone out on a whim….

    “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.”

    Just how many households actually fit in your ‘inner city trendies’ stereotype? None of that is a reason to erode tenant’s rights that don’t appear to be on paper unreasonable.

    The real issue, muddied here within your want to give a substantial amount of power back to landlords, is the inability to use powers to evict in cases where people are not doing the right thing. That is the real issue that needs to be dealt with – not the large majority of cases where people are doing the right thing. In those cases, in the absence of genuine reason for the person to vacate the property, the balance should be swayed towards the tenant.

    More broadly, we need to move away from this rhetoric that property should be seen as the be all and end all for wealth creation (i.e. drop the rubbish about mum and dad investors etc), and see the current set up for what it is – one creating ever increasing hurdles for people at the bottom that want to get out of the rental cycle. A move back towards a view that the primary purpose of housing is shelter would be a good thing – but would need to be reflected across all housing related policy. None of that is to say I’m against it as an investment for people – but the property obsession here in Australia is waaaayyy over the top.

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