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Tenancy reform and the law
The need for tenancy law reforms is not just a response to changing rental dynamics, but a necessity, writes Dr Chris Martin, in collaboration with Unisearch.
Dr Chris Martin, in collaboration with Unisearch
At the state, territory, and increasingly national levels, there is a pressing and ongoing discussion about the lack of security and affordability in rental housing, and the lack of consistency in residential tenancy laws in Australia. The need for tenancy law reforms is not just a response to changing rental dynamics but a necessity as more people are renting for longer periods of time and seeking security and autonomy in their rental housing. The focus of reforms is to reflect the new reality of the rental market and, specifically, to eliminate “no-grounds termination”, which allows landlords to terminate a tenancy without providing a specific reason. It also calls for rent regulation and the establishment of minimum standards.
The traditional view of rental housing as a short-term and transitional arrangement, with the ultimate goal being home ownership, has changed as substantially more people are renting for longer periods and even considering it as a life-long housing option. This evolution is driven by several concurrent factors, including economic considerations, lifestyle preferences, and changing housing market dynamics.
In August 2023, the Australian national cabinet announced the Better Deal for Renters reform agenda that has been created to provide a fair and balanced rental housing system that meets landlords’ and tenants’ needs and expectations. The nine-point plan aims to provide tenants greater security and stability by addressing key issues such as tenure, property standards, and tenant rights, per this summary:
- Develop a nationally consistent policy to implement a requirement for genuine reasonable grounds for eviction, having consideration to the current actions of some jurisdictions;
- Ensure provisions to allow appeals against retaliatory eviction notices are fit for purpose;
- Move towards a national standard of no more than one rent increase per year for a tenant in the same property across fixed and ongoing agreements;
- Implement a ban on soliciting rent bidding;
- Allow tenants experiencing domestic or family violence to have various exemptions and discretions applied;
- Limit break lease fees for fixed-term agreements to a maximum prescribed amount, which declines according to how much of the lease has expired;
- Make rental applications easier and protect renters’ personal information;
- Consider options for better regulation of short-stay residential accommodation; and
- Phase in minimum quality standards for rental properties.
Currently, the only Australian jurisdiction to have eliminated no-grounds terminations is the ACT, with South Australia having similarly legislated, though the SA changes have yet to commence. All other jurisdictions still allow no-grounds terminations at the end of the fixed term of a tenancy (in Victoria, only the first fixed term), and some still allow no-grounds termination at any time during a periodic tenancy.
Most of the other items on the agenda relate to issues where significant differences and divergences are opening between jurisdictions. For example, all jurisdictions deal differently with the tenancy implications of family and domestic violence. In these and other respects, all jurisdictions can learn from each other and improve the standard and consistency of their residential tenancy laws.
The main thing missing from the agenda is rent regulation. The Better Deal for Renters agenda includes limiting the frequency of rent increases – which all jurisdictions already do (and six of the eight already limit increases to once per year). Howevr, the agenda doesn’t discuss regulating the amount of rent that may be charged or the rate of increase.
Implications for the legal profession
Compared to lawyers in other countries, Australian lawyers tend to have little involvement in residential tenancy matters law. There are several reasons for this. One is that Australian residential tenancy laws prescribe standard forms of tenancy agreement that leave little for lawyers to add to when parties enter into a new agreement; another is that these laws also direct most disputes to tribunals where parties are generally not entitled to legal representation.
But there are good reasons for lawyers to take an interest in developments in residential tenancy laws. There are some types of disputes where there is more scope for advice and representation by lawyers. For example, because of the High Court’s decision in Burns v Corbett, matters involving interstate parties are outside the jurisdiction of the state tribunals and must proceed through the courts instead – and an estimated one in 10 rental properties is owned by an interstate landlord. In some matters, the disputed quantum may exceed the jurisdictional limit of the tribunal. This is more likely in cases where a landlord’s failure to do repairs results in injury or loss to a tenant. Last year, the High Court held in Young v Chief Executive Officer (Housing) that a tenant’s disappointment and distress at living in unrepaired premises was compensable under the Northern Territory’s residential tenancies legislation.
As people rent longer and seek to make their long-term homes in rental housing, the stakes involved in tenancies get higher – whether in terms of the loss that may be caused by a failure to do repairs or the need for termination to be justified by reasonable grounds
Dr Chris Martin is a Senior Research Fellow at the UNSW City Futures Research Centre. He has led and participated in numerous inquiries and research projects for the Australian Housing and Urban Research Institute (AHURI), the Australian Research Council (ARC) and other research funders. Chris was previously the senior policy officer of the Tenants’ Union of NSW and a past chair of Shelter NSW.
