si queensland p law society - queensland law society · term tenancy to an end for “no reason”...

SI QueenslandP Law Society

Law Society House, 179 Ann Street, Brisbane Qld 4000, Australia GPO Box 1785, Brisbane Qld 4001 | ABN 33 423 389 441 P 07 3842 5943 | F 07 3221 9329 | [email protected] | qls.com.au

Office of the President

23 December 2019

Our ref: WD Multi

Confidential

Renting in Queensland Strategic Policy and Legislation Housing, Homelessness and Sport Department of Housing and Public Works GPO Box 690 Brisbane Qld 4001

By Express Post

Dear Rental Reforms Team

Rental reforms - Consultation Regulatory Impact Statement - Ending tenancies fairly, Minimum housing standards, Minor modifications, Domestic and Family Violence Protections and Renting with Pets

Thank you for the opportunity to provide comments on the Consultation Regulatory Impact Statement (Consultation RIS).

The Queensland Law Society (QLS) appreciates being consulted on this important stage of the proposed reforms.

QLS is the peak professional body for the State’s legal practitioners. We represent and promote over 13,000 legal professionals, increase community understanding of the law, help protect the rights of individuals and advise the community about the many benefits solicitors can provide. QLS also assists the public by advising government on improvements to laws affecting Queenslanders and working to improve their access to the law.

This response has been compiled by the QLS Property and Development Law Committee whose members have substantial expertise in this area.

Inadequate consultation timeframes

QLS is extremely concerned at the short timeframes for responding to the Consultation RIS, which was released on 16 November 2019.

Responses are requested by 28 December 2019, in the middle of the traditional business closure period of 25 December 2019 to 2 January 2020.

The reforms that are proposed in these documents are significant and will affect a wide range of stakeholders in the property industry beyond landlords and tenants.

This is an inappropriate time of year to conduct such significant consultation and it is an inadequate length of time.

Law CouncilOF AUSTRALIAQueensland Law Society is a constituent member of the Law Council of Australia

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In light of the short timeframes, QLS, with the assistance of its volunteer committee members, has prepared a limited response below focusing on a few key issues.

There are likely a wide range of other issues which we have not had the time nor opportunity to consider in detail. If we have not commented on other aspects of the Consultation RIS, it should not be taken as assent or support.

Ending tenancies fairly

QLS is concerned that pursuing Option 5, that is, requiring property owners to end fixed term tenancy agreements only for specified approved reasons, is fundamentally inconsistent with the nature of a contract.

In particular, this proposal recommends the removal of the option for a landlord to bring a fixed term tenancy to an end for “no reason” other than reaching the end of the contractual lease period.

A fixed term tenancy is a contract under which a tenant is permitted to occupy premises for a specified period of time. The parties to the contract understand at the outset that the contract is for a set period.

The proposal to remove the right of the landlord to rely on the contracted end of the tenancy period fundamentally undermines the nature of a fixed term contract as a basic tenet of ourlaw.

The Consultation RIS suggests that adding a range of “additional grounds for owners to end tenancies due to changes in their circumstances will protect owners from being unfairly locked into tenancy arrangements that no longer meet their needs until the tenant is ready to move on.”

QLS is concerned that listing a set of limited and specific grounds runs the risk that a landlord will be penalised if his or her personal circumstances do not fall within those specified grounds. It is essentially impossible, when drafting legislation of the kind proposed, to list exhaustively all of the potential reasons which a reasonable person would consider appropriate. QLS does, however, support the reforms in relation to providing support to tenants attempting to escape domestic and family violence.

QLS is also concerned that this proposal will not achieve the intended objective of increasing tenants’ security or reduce the risk of retaliatory or arbitrary eviction when a tenant seeks to enforce their rights. Some of those risks are identified in the Consultation RIS, including:

• Investment in the private rental market may be discouraged because of the landlord’s loss of control;

• Owners may pass on additional risk management costs to tenants through higher rents;

• Owners may prefer to rent the property as a short term rental through Airbnb or a similar service, reducing rental supply; and

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• Tenants will be subjected to a much more vigorous vetting process at the time of leasing the property.

Further risks with pursuing this option are:

• That a landlord will be more likely to pursue recompense for a tenant’s minor breaches during the term of a fixed term lease. This may include a greater likelihood of a landlord seeking to terminate the lease early in circumstances where the landlord might otherwise have waited for the end of the fixed term, thereby effectively reducing rather than improving the security of a tenant;

• The potential for more rent increases as a result of more periodic leases. A landlord may decide to offer a shorter fixed term lease of 6 months rather than 12 months, which will effectively be a probation period of 6 months. At the end of the fixed term, the lease becomes a periodic lease and if the landlord is not able to rely on one of the specific "approved reasons”, the landlord may instead decide to increase the rent; and

• Predictability around rent increases should be carefully considered. The Consultation RIS states that “Future reforms will also consider protections for tenants against retaliatory rent increases” (page 68) but it would seem appropriate that this should be reviewed and thoroughly explored as part of these reforms, to avoid prematurely rolling out reforms which increase existing housing stress.

QLS also queries:

• the evidence that a landlord must provide in order to prove the approved reason for terminating the lease, without requiring the disclosure of potentially sensitive personal information (for example, the need for a family member to move into the property); and

• Any proposal that will increase the burden on an already busy QCAT without significant additional funding, noting the proposal that QCAT will be responsible for orders ending a tenancy.

QLS suggests that alternative options for achieving greater security for tenants include:

• Providing appropriate funding to community legal centres to assist tenants who seek to enforce their rights against the landlord, so that tenants can legitimately challenge a retaliatory termination or other improper action; and

• Encouraging landlords to consider offering longer fixed term leases to tenants from the outset. It is to the benefit of the landlord to have the property securely leased for a longer period of time, where the longer term arrangement suits both landlord and tenant.



Minor modifications

Subject to the comments under the heading “Domestic and Family Violence Protections”, QLS raises the following concerns with the recommendation of “Option 3 - Establish mechanisms to manage minor modifications with appropriate safeguards":

• Owner’s consent should be obtained for any minor modifications of the kind outlined in the Consultation RIS, not only those proposed as "amenity or personalisation modifications".

o QLS acknowledges that where the proposed modification is for health, safety, accessibility and security reasons, most of the examples provided are minor and will likely not damage the property. However, some can be more intrusive and could significantly damage the property during installation and for this reason, consent should be obtained.

o Permitting a tenant to make modifications of this kind without consent may expose the tenant to asbestos or other hidden dangers arising from the proposed work, which the owner is in a better position to know and warn against.

• However, if the decision is made to introduce the option of permitting modifications for health, safety, accessibility and security reasons without consent, QLS strongly supports the retention of the tenants’ obligations to repair any damage caused through the installation or removal of the modifications and further, that the landlord can require the tenant to remove the modifications and repair damage at the end of the tenancy.

• The Consultation RIS indicates that in accordance with existing obligations, the parties will "agree how the modifications are to be managed at the end of the tenancy" (page 138). If this option is pursued and owner’s consent is not required for certain modifications, then no notice is given to the owner prior to the modification being carried out. As part of this proposed reform, it would seem prudent that the parties be required to reach agreement on restoration, etc, before the modification work is done, otherwise it will invite disputes at the end of the tenancy.

• QLS notes that the Anti-Discrimination Act 1991 provides certain protections to a tenant who requests modifications for accessibility reasons. It is unclear from the analysis in the Consultation RIS whether in practice, these provisions are providing insufficient protection. A better option may be to educate landlords and property managers of their existing obligations under the Anti-Discrimination Act 1991, rather than introduce new processes which appear to achieve the same end.

• The proposed 7 day timeframe for an owner to respond to a request for a minor modification (or be deemed to have consented to the change) is too short and is not reasonable. If this proposal is pursued, this timeframe should be amended to allow a landlord or the landlord's representative at least 14 days but ideally 21 days to respond, particularly given that the request will likely first be made to a property manager who will then need to contact the landlord.



• QLS is concerned about the proposal that the landlord is deemed to have consented if the landlord does not respond to a request. Whether this is a reasonable approach to take will depend on what is classified as a modification to which this applies, including the scale of the modification and the potential damage to the property as a result of the modification. It is difficult to identify those modifications exhaustively in advance. In practice, QLS anticipates that the unintended consequence of this type of reform will be that landlords will seek much higher bond amounts, in case the tenant does not make good the alterations at the end of the tenancy or the work causes damage to the property (for example, the tenant does not engage a qualified tradesman to undertake the work and it needs to be rectified). This outcome would potentially detract from the intent of the reform. A landlord would generally expect to have the right to agree to a modification on a conditional basis or refuse consent, before the work is carried out.

If this reform is pursued, it is critical that a landlord has access to a clear and efficient process for adequate compensation for making good modifications, either from the bond or another process.

• It is not reasonable to require the landlord to seek an order from QCAT restraining the tenant from undertaking the tenant’s proposed accessibility and security modifications. If the tenant considers that the refusal is unreasonable, the tenant should make an application to QCAT. As noted earlier, it will be important to provide further funding to:

o QCAT to deal with these applications; and

o Community legal centres to assist tenants in making such applications.

• The Consultation RIS is unclear as to how these modification processes would work in a community titles scheme scenario, particularly if the proposal regarding landlord’s deemed consent is implemented. Further consultation needs to occur in this regard.

• The Consultation RIS suggests that “restoration bonds” could be explored in a later stage of these reforms. QLS considers that this would be an integral and critical part of any “Minor modifications” reforms and that it would be premature to pursue these reforms without fully exploring the "restoration bonds” concept as a mechanism for balancing the parties’ rights in this situation.

Domestic and Family Violence Protections

Overall, we support the recommended option to strengthen tenancy laws in a manner that better protects people attempting to escape domestic and family violence.

QLS has consistently advocated for measures to support and protect people experiencing domestic and family violence. We acknowledge the devastation of domestic and family violence on individuals and families in our community.

The time leading up to and immediately after leaving a violent relationship can be the most dangerous for a person experiencing violence. We agree that tenancy reform is critical in



increasing safety for people experiencing domestic and family violence, potentially preventing further violence and reducing homelessness.

We expect there would be some inconvenience caused to a landowner in these circumstances, however, in our view, the recommended options appropriately balances the interests of tenants and landowners, in consideration of the seriousness of domestic and family violence.

With respect to providing evidence that a person is experiencing or has experienced domestic and family violence during the tenancy, we submit that a solicitor should be included in the list of authorised professionals able to complete a certification statement on the Domestic and Family Violence Notice of Intention to Leave form. People experiencing domestic and family violence often seek legal advice as part of the separation process and solicitors play a key role in supporting people through this difficult process. Solicitors who engage in this work understand the complex dynamics relating to domestic and family violence and are encouraged to undertake ongoing education around these issues. In addition, QLS has developed Best Practice Guidelines for Queensland solicitors working with clients affected by violence. Solicitors have a robust understanding of their duties in this regard.

As such a reform is a governmental policy response to address a social issue, QLS recommends that consideration be given to establish a State government fund which can recompense landlords who are affected financially by these changes. QLS also recommends that the State government advocate to insurance providers to encourage the availability of landlord insurance cover for loss of rental and property damage in these situations.

As these proposals are developed and specific drafting is prepared, QLS would be pleased to participate in the process with a view to identifying any unintended consequences and the practical implications for the changes in the legislative framework.

Minimum housing standards

On the information provided and in the limited time for consultation, QLS cautiously supports the proposal to prescribe minimum housing standards supported by enhanced repairs and maintenance provisions.

The difficulty with such a proposal will be developing specificity in the drafting, to ensure that the standards are clear, easily interpreted and easily applied by all stakeholders.

Further consultation on the draft standards will be critical, to ensure that the right balance is found with the drafting and that the new standards are consistent with existing regulatory obligations. QLS would be pleased to participate in this further consultation process.

Renting with pets

QLS acknowledges the analysis in the RIS in relation to reforms about renting with pets. Such reforms are a challenging area of balancing the rights of landlords and tenants.



If it is proposed to pursue Options 4 and 6, the drafting of the legislation and any accompanying guidance will be critical to ensure that it is clear, unambiguous and easily applied by landlords, tenants and property managers. It must also be consistent with existing regulations at the State and local government levels.

QLS encourages further consultation on the draft legislation and guidance, to ensure that the specific drafting meets the needs of all stakeholders. QLS would welcome the opportunity to be involved in this process.

Next steps

Given the short timeframe for consultation and the significance of the reforms outlined, QLS strongly encourages wide-ranging further consultation over an extended timeframe on all of the proposals put forward in the Consultation RIS.

Stakeholder consultation will lead to better outcomes for all involved in this industry.

QLS would be pleased to participate in this process.

If you have any queries regarding the contents of this letter, please do not hesitate to contact our Legal Policy team via [email protected] or by phone on (07) 3842 5930.

Yours faithfully

Bill PottsPresident

Queensland Law Society | Office of the President

mailto:[email protected]

si queensland p law society - queensland law society · term tenancy to an end for “no reason”...

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