Consulting the Public: Proposed Reforms to The Residential Tenancies Act
In early August 2021, The ACT Government released a Consultation Paper (the Paper) on Proposed Reforms to The Residential Tenancies Act 1997 (ACT) (the Act). The Justice and Community Safety Directorate, who drafted the Paper, are attempting to “consult” members of the public who are willing to give feedback on the proposed reforms. The consultation period elapsed on Tuesday 17 August, and it will be interesting to see what impact the written feedback has on the considered reforms.
The reforms considered and proposed in this Paper involve ending no cause evictions, rent bidding, the right to compost and grow food, and minimum standards.
What are no cause evictions?
Currently, the Act allows a landlord to end a tenancy agreement without any reason for the termination, also known as a ‘no cause’ termination. The reform proposes to remove that ability and ensure that a landlord only terminates an agreement with a reason prescribed by the Act.
A landlord can implement the current ‘no cause’ termination with a notice to vacate at least 26 weeks before the tenancy end date. For fixed term agreements, the tenancy end date must fall after the end of the fixed term. Should the tenant wish to vacate the property prior to the date given in the notice to vacate, they may do so provided the required notice is given in accordance with their tenancy agreement.
The evolving housing market in Australia, that is seeing renters looking for longer term renting options, gave rise to the consideration of the implications that no cause evictions have. The reform seeks to secure and enhance the sustainability of the ACT’s tenancy laws, giving tenants the reassurance that the termination of their tenancy will only come about with reasons prescribed by the Act and giving landlords the capacity to still end the tenancy with reason.
Should this reform be implemented, two main issues may present:
- Whether there are currently sufficient prescribed termination grounds in the Act for landlords to manage tenancies in the absence of the no cause ground; and
- Whether any additional protections for landlords or tenants are needed when ‘no cause’ terminations are removed.
The Paper also gives the suggestion of the following Potential Additional Prescribed Grounds for Termination:
- Use of the rental premises for a non-residential purpose.
- Effective management of social housing stock.
- Loss of eligibility for accommodation assistance.
- Termination at the end of a fixed term tenancy.
What is Rent Bidding?
Rent bidding can be divided into two categories. The first category is voluntary bidding, where a tenant makes an offer to pay more than the advertised price for the rental property. The second category is solicited bidding, where the landlord or agent invites tenants to make their best offer to “win” the rental property. Apps such as Rentberry, LiveOffer and RentWolf give landlords, agents and prospective renters a platform for this style of bidding, similar to online auctions. The Paper suggests that voluntary rent bidding is more common than solicited bidding in the ACT, with some tenants bidding to pay an extra $100.00 per week over the listed price.
The Act does not contain any specific law or regulations for rent bidding, but the Australian Consumer Law prohibits misleading or deceptive conduct, including in transactions in the rental marker1, which is applicable to both real estate agents and private landlords. Real estate agents have conduct rules that including that they must act honestly, fairly and professionally, as well as not issue advertisements or male communications that are false or misleading2.
The Paper has drawn the conclusion that the following issues could arise from reforming the Act’s regulations around rent bidding:
- Rent Prices.
- Voluntary versus solicited rent bidding.
What was stopping renters from growing food and composting?
A component of the ACT Climate Change Strategy 2019-2025 is to reduce organic waste from households. Allowing tenants to maintain gardens that produce fresh food for personal use and to reduce waste ending up at landfill by composting would align with the ACT Climate Change Strategy. New South Wales and Victoria have law that are more flexible around this area, which could be used as precedents.
Under the Act currently, tenants can compost and grow food without gaining the consent of their landlord if their efforts do not involve any modification to the property and are relatively small scale. Utilising raised and removable garden beds and compost tumblers does not require consent form the tenant’s landlord, but they must seek approval from their landlord if they wish to dig into the ground or fix raised garden beds to the side of the property.
The Paper suggests that the best way to implement this reform would be to insert a regulation that would mean that:
- Tenants would not have an absolute right to modify the property to grow food or to compost.
- Instead, the tenant would have to make a written request to the landlord to ask for consent.
- The landlord would not be able to refuse consent without the agreement of ACAT.
- If the landlord wanted to refuse consent, they would need apply to ACAT within 14 days of receiving the tenant’s request.
- If the landlord did not respond to the tenant’s request within 14 days, they would be taken to have consented.
From this reform, the Paper notes that issues could arise from this reform, including landlords and tenants may have differing views on garden aesthetics and the expense of garden alterations.
What are the minimum standards?
The introduction of the Residential Tenancies Amendment Act 2020 provided the ACT Government with the power to implement minimum standards in relation to premises which are subject to a residential tenancy agreement, such as:
- physical accessibility;
- energy efficiency;
- safety and security;
- sanitation; and
The ACT Government is yet to use these powers.
The Paper is aiming to be provided with the public’s view on other minimum standards that should be introduced, as well as the best way for the above standard to be implemented.
The Act lacks specification around the expectations of a rental property’s premises. It lists that the premises must be fit for habitation, reasonably clean, reasonably able to be repaired and reasonably secure. The generalised description of the conditions means that the condition of the rental properties in the ACT can meet these requirements in a subjective and inconsistent manner.
The Paper takes an in depth look at how the jurisdictions of New South Wales, South Australia, Tasmania and Victoria prescribe their minimum standards, what the minimum standards are prescribed for and how compliance and enforcement is regulated.
The compliance and enforcement of these minimum standards is an important factor to consider if reforms of the ACT’s minimum standards are implemented. Potential avenues for the implementation of the standards include:
- A fixed commencement date – a date which all rental properties would need to ensure the are compliant with the minimum standards set out in the regulation.
- A phase in of standards – staggering the dates which standards must be implemented by so that landlords have ample time to comply with the regulations, given the costs and time that may be involved.
- Compliance required when entering a new lease – a ensuring compliance occurs before the commencement of a new lease.
The Paper requested the public’s view on the reforms, potentially opening a can of worms in relation to residential tenancies.
If you want to find out more about what the public was consulted on, a copy of the full Paper can be found here.
If you have any questions about your rights as a tenant or responsibilities as a landlord you should contact the Aulich team for more information at firstname.lastname@example.org.
 Section 18 of the Australian Consumer Law, in force in the ACT under the Fair Trading (Australian Consumer Law) Act 1992.
 The regulatory scheme for real estate agents is the Agents Act 2003 and the Agents Regulation 2003 (see the rules of conduct in Schedule 8).