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What you need to know about the Residential Tenancies Act reforms

What you need to know about the Residential Tenancies Act reforms

Amendments to the ACT Residential Tenancies Act are set to give greater freedom and protection to tenants with respect to rent increases, basic home modifications and pets.

ACT Attorney-General Gordon Ramsay introduced the new Residential Tenancies Amendment Bill 2018 into the Legislative Assembly on 1 November 2018 after calls from the ACT Greens to strengthen renters’ rights including giving tenants more stable, affordable and safer homes to live in and helping to make their properties more homely.

The Greens’ Make Renting Fair CBR campaign, led by the Make Renting Fair Alliance (made up of the Tenant’s Union ACT, Better Renting, ACT Shelter and UnionsACT), is part of a reform push urging the ACT Government to make the Residential Tenancies Act fairer after almost four years of reviews.

The new measures explained

Rent increases

The proposed changes include limitations on how much a landlord can increase rent to ensure all increases are within appropriate limits. This will mean that landlords must align with market conditions and a set formula, and will need to justify any increases beyond the standard CPI. If a tenant and landlord cannot agree on an increase that is greater than 10 per cent above the housing element of CPI, the landlord will have to apply to ACAT (ACT Civil and Administrative Tribunal) for a review.

Property modifications

The impending changes outline that tenants will be able to seek approval to make minor and special alterations to their rental properties and the landlord cannot unreasonably refuse. Landlords will be allowed to impose reasonable conditions on consent that requires the proposed renovation, alteration or addition to be done in a stated way to minimise damage to the premises.

The reforms consist of two modification categories:

Minor modifications:

  • Any renovation, alteration or addition that can be removed or undone at the end of the tenancy so that, except for fair wear and tear, the property is returned to substantially the same condition as when the tenancy commenced. This covers picture hooks, blu tack, painting, putting up shelves and anchoring furniture to walls.

Special modifications:

Any renovation or modification related to:

  • Safety (i.e. deadlocks, security alarms, child locks)
  • Disability on recommendation from a health practitioner (i.e. ramps, grab rails)
  • Energy efficiency improvements
  • Telecommunication services or access (i.e. NBN).

Pets

The new reforms will give tenants a greater say in allowing pets in rental properties. The laws would create a presumption in favour of allowing tenants to have pets in their rental home, meaning applications with a pet or pets included can no longer be unreasonably refused by a landlord unless there is a sound justification. This would include if a property is not suitable for the animal or if the animal is likely to cause unreasonable damage.

Break-lease fees and obligations

The new measures include limitations on the break lease fees payable by a tenant if they choose to cease the residential tenancy agreement earlier than the set term. While break-lease clauses will still remain an option in tenancy agreements, the new changes will limit any fee to the loss experienced by the landlord, particularly if a replacement tenant is found within a defined period. This would mean that if a tenant moves out and another moves in on the same day, the landlord cannot charge the full break-lease fee. The amount of the lease term which had expired will also be taken into consideration.

The new bill was debated and passed through Parliament on 21 February 2019, and while not yet enacted, is due to commence in early March 2020.

The impending new laws have been widely debated with claims they favour tenants over landlords, however Minister Ramsay said the measures are about balancing rights and creating a fairer housing market.

“The ACT Government is committed to making sure that people, especially vulnerable people, in our community have the protections they need in the rental market,” said Minister Ramsay. “These laws are yet another step towards more secure, liveable and affordable housing for all Canberrans.”

The Minister also added that the ACT Government intends to continue its work on the issues that affect renters, following on from the detailed consultation on tenancies and other living arrangements like caravan parks, student accommodation, and boarding houses.

“This government will keep working to deliver amendments and services that support our housing priorities and will continue to deliver legislation and policy reforms that prioritise the most vulnerable households in our community,” said Ramsay.

If you would like to know more about what the Residential Tenancies Act reforms mean for you, contact your local Peter Blackshaw office.

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