There are some new changes to the Residential Tenancies Act scheduled to take effect on the 29th of March 2021. In the market insight we offer you some important amendments that may impact you and your investment property. Before making an informed decision, we encourage you to discuss your personal circumstances with your property manager in advance.
Here is a summary of the new changes to take place:
Terminology or use of words
The terminology or use of certain words have been updated. Please see as follows:
- ‘Tenants’ are now to be known as ‘renters’
- ‘Landlords are now to be known as ‘rental providers’
- ‘Tenancy agreements’ or ‘lease agreements’ are now to be referred as ‘rental agreements’
Prescribed Rental Minimum Standards
Rental properties need to comply with the new Prescribed Rental Minimum Standards. The new standards must provide minimum requirements of amenities, safety and privacy.
- Lock and keys – Some examples are to have functional locks that can be locked both from inside and out. Keys are to be provided for external doors to ensure safety for renters. This also includes car basement and garages at no cost to the renter.
- Windows – All of the external windows require a functional latch to secure the home from an external entry. The windows will require function latches so they cab be safely closed against external entry. Each window also requires window furnishings such as blinds or curtains. The renter will need to be able to open and close them.
- Mould and mildew – The property needs to be free from mould and mildew. A rental provides needs to ensure this is not related to the building structure.
- Heating – A rental provider will need to ensure there is a functional fixed energy-efficient heater (with a 2 star or above energy rating). This needs to be installed in the main living area.
- Electricity standards – All power outlets and light circuits need to be connected to a switchboard type circuit breaker. This must comply with AS/NZS 3000 electrical standards.
Prescribed leasing requirements
The minimum rental standards must be adhered to by the rental provider. The rental provider must also not unlawfully discriminate against another person by refusing an application based on an attribute set out in the Equal Opportunity Act 2010.
The rental provider must disclose specific information to the renter in advance to executing a rental agreement. Please see as follows:
- The rental provider has the legal right to rent/lease the property
- Details of any embedded electricity network
- Any other prescribed information relating to rental property. Please refer to the Residential Tenancies Act for more details.
Increases to rental prices
Rental providers are already bound to only having the option to increasing rental prices to once every year (12 months). This has been updated into the Residential Tenancies Act. However rental increases have been paused during the wake of the global pandemic (covid-19). This legislation will again take into effect from 29th March 2021.
Rental providers will have to substantiate the basis behind the rental increase. It may be due to indexation, comparable properties or property market movements.
Rental bonds
Going forward, rental bonds cannot exceed one month’s rent unless the rental cost is more than $900 per week.
Renters can install a variety of things in the rental property
Renters now have the ability to install a variety of things with the home. These can be done without seeking consent from a rental providers. These are as follows:
- Picture hooks, screws, wall mounts and shelves.
- LED light globes if they do not need any form of new fittings
- Safety equipment such as alarms, cameras and sensor lights. If these are removable items and do not need to be hard-wired into the rental property, they can be installed without requesting consent.
There are a number of other items that can also be installed, but we encourage you to review the changes via Residential Tenancies Act website for more details.
New compliance checks to be completed
Rental providers will need to arrange a compliance check to valid the safety of the rental property’s electrical and gas connections/functionalities. These need to be done every two (2) years by a registered electrician and/or plumber. The service provider can issue you a safety report once completed.
Urgent property repairs
At present urgent repairs has been limited to $1,800. This amount is to be changed to $2,500 (an increase of $700).
Ending a tenancy
- Rental Providers will only be able to issue an ‘end of fixed term’ notice to vacate at the end of the first term of a rental agreement.
- Rental Providers may be able to end the residential rental agreement earlier than the termination date via a notice to vacate, if the notice is given for one of the following reasons –
- Repairs or renovations required
- Demolition of the property
- Change of use of the property
- The property is being sold
- The property will be required to be used for a public purpose
- The renter no longer meets the eligibility criteria
The rental providers will need to provide a reason to end a rental agreement. If there is not a specified reason the rental provider must give the renter 120 days notice to vacate.
Renters will be compensated when a rental provider sells the property
If a rental providers is selling the home while the renter occupies the property, the renters will be entitled to financial compensation. If the property requires open/private inspections during a sales campaign, the renter will receive the higher amount of the following:
- $30
- One half of the daily amount of rent payable under the residential rental agreement
If you are a rental provider and require assistance in managing these matter, please don’t hesitate to contact us. Remember, a happy tenant will influence the success of your investment property portfolio. Before making any changes, particularly a notice to vacate, we strongly recommend learning more about this clause and corresponding with your property manager.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
March 2021
