Back in 2019 Consumer protection WA started the “Your house My home” initiative and asked renters to have their say in the review of residential tenancy laws.
It has been over ten years since this legislation has been reviewed and with the cost of housing increasing and more people staying in rental accommodation for longer, they felt the time was right.
What came out of this was a raft of recommendations that have now been put to the powers that be with the hope of them being passed into legislation.
Some were minor, however, there were a few that ruffled feathers for those on the other side of the fence, that being residential property investors and the peak body for the real estate profession in WA better known as REIWA.
The main culprits were recommendations such as:
- Removing the requirement for a tenant to seek permission before bringing a pet into the property.
- Removing the ability for a landlord to terminate a tenancy with “no ground”
- Removing the requirement for tenants to seek permission before modifying the rental property.
- Giving tenants additional grounds to break a lease without penalty.
To name a few….
As a reaction, REIWA commissioned an independent economic analysis of their own to see what effects these recommendations may have if brought into legislation.
According to their findings, the effects will be rather severe, here are some of the key takeaways from the REIWA side.
- 61% of owners they polled have said they will sell their rental property if the proposals are adopted.
- Property management costs will increase to the tune of $142.5 million per year.
- Property prices will increase costing tenants up to $105 million dollars per year.
Now if we combine the above with the current rental shortage you wouldn’t be wrong in thinking our industry and those in need of housing are headed for the apocalypse.
So what will happen if these recommendations become law, how big of a change will it be?
In March 2021, 130 amendments were made to the residential tenancies act in Victoria where I was working at the time.
Similarly, these were big changes and included many of the recommendations that have been made here.
And what happened? Well, not much to be honest.
As an industry, we had to roll up our sleeves and get to work educating ourselves and our landlords on the new regulations.
As property managers we solve problems and we move on, it’s what we do.
Some landlords did have to dip into their pockets a bit more to bring their properties up to scratch, but this is what they should have been doing anyway, it’s just the cost of doing business.
So far tenancy reform in other states has not sullied residential real estate as our favourite way of investing our money.
Personally, I don’t think the proposed amendments are a big deal. They just bring WA tenancy laws further in line with the larger markets in the eastern states. I have experienced this kind of change before and while some investors did leave the market with a knee-jerk reaction, things remained relatively the same.
If a rental property is well managed, then the addition of Fido and a few picture hooks are not going to make a lot of difference. If my tenants are safe and happy, they will stay for longer and that works out better for me.
What I am a little concerned about though is how much time and effort both sides have been putting into the fight.
I think that effort could be used more wisely.
What we need is affordable housing for lower-income families. We need housing for new arrivals that don’t yet have any rental history here and are getting overlooked in a crowded rental market. We need a second chance for those that have not always had the best payment history.
We could all use a little bit more empathy, it doesn’t hurt to try and view things from both sides every now and then.
Perhaps that change is coming.
Written by Ben Broadley