Australian Landlord Rights Explained

As a landlord, it can be difficult to keep up with legislation changes, and with so many states introducing tenancy reforms and changes, there’s a lot of information in the media that doesn’t always make a lot of sense or is hard to understand.

As a real estate agency in Perth, we know that in Western Australia it’s been some time since tenancy legislation was last updated – over a decade in fact – and the state government has talked about introducing new legislation and making changes for some time. Now that COVID is no longer really affecting us, these proposed changes are aimed to make the rental market fairer for tenants and easier to understand for landlords.  

Let’s explore some changes under review! 

Proposed Changes to Rental Legislation in Western Australia 

Western Australia is bringing in legislation that falls into line with most other states. The big changes centre around:

• Rents will only be allowed to increase once every 12 months as opposed to once every six months that it is currently
• In most cases, tenants will be allowed to have pets. A landlord will need to apply to the Commissioner for Consumer Protection and have a reasonable reason to do so if they do not want pets in their property
• Tenants will be able to make certain minor modifications, however, may be required to restore the property to original condition when vacating. Modifications will only be allowed to be refused on certain grounds
• Release of bonds will be streamlined, and disputes over bonds and other issues will be handled by the Commissioner for Consumer Protection
• Funding boost for tenancy advocacy groups and legal centres to assist tenants in trouble

Annual Rent Increases

This area is probably one of the more important areas of the new legislation, and it’s important to be working with your property management team in Perth on this now, rather than waiting until further details are released.  

You may have heard in Queensland for example, that legislation was changed to only allow a rent to increase every 12 months, instead of every six months (similar to what we currently have). The issue with this legislation is that many landlords were caught out, unable to increase rents as planned.  

Here in Western Australia, we have plenty of notice that this change is coming in, which means you have plenty of time to plan ahead. Start talking with your rental agency now, ensuring your tenants are on 12-month agreements where possible, and that you are assessing rents yearly so that when this new legislation does come into effect, you aren’t behind the ball.  

Rent Bidding  

With the rental market being as tight as it is, we’ve been hearing about a lot of rent bidding going on. This is essentially where a landlord or property manager pressures or encourages a tenant to offer more than the advertised rent to secure a property.  

As part of this change to the legislation, rental properties will need to be advertised with a fixed amount and not a range.  

It is important to note that while landlords and property managers will not be able to encourage tenants to increase rent, tenants will (like in many other states) be allowed to offer more than the advertised price if they choose to.  

This is happening quite a lot in many other states who have a “no rent bidding” provision in their legislation, and really reflects the current rental property market. It should be noted however, that your property management team in Perth should still be securing tenants based on rental history and capacity to pay rather than just how much more they offer.  

Minor Modifications  

This is one area we are certainly waiting to hear further information on, and it has been noted that the state government is still working on details around tenants being able to make minor modifications to properties.  

If we take examples from other states, some of these modifications do strike a balance between the needs of tenants and owners. Modifications like installing ramps, grab bars in bathrooms and toilets and other safety measures are essential in allowing some tenants to live safely. 

It does remain to be seen what other minor modifications will be allowed, but we expect that there will be an approval process and reasonable reasons a landlord can refuse modifications.   

Bond Disagreements and Releases  

Like many other states, the release of security bonds, and any disputes over bond payments, will be streamlined.  

When it comes to releasing bonds at the end of a tenancy, tenants and landlords can both apply separately for bond release and how the bond payment is to be disbursed. For bond payment disputes, as well as disagreements on pets and minor modifications, the Commissioner for Consumer Protection will be tasked with determining the outcome.  

Keeping Pets in a Rental  

In many cases, tenants currently need to choose between having a home and keeping their pets. Australia has one of the highest levels of pet ownership in the world but pet friendly rentals can be difficult to come across.  

While details haven’t been released on the grounds a landlord can refuse a pet, we expect that legislation will be like other states that have made these changes whereby there will need to be a written request for approval, reasonable approval conditions (such as keeping the pet outdoors, requiring professional pest control etc) and unreasonable conditions of approval.  

We also expect that there be a list of conditions a landlord can refuse a pet request on, which may include things like too many pets at the property, the property is unsuitable for the type of pet, having a pet would contravene strata by-laws, or it is illegal to have that type of pet.   

No Grounds Evictions  

Western Australia isn’t the only state to consider no grounds evictions, and it’s been a contentious issue in most states where it has been brought in. Victoria, Tasmania, the ACT and Queensland have all recently passed laws that allow landlords to only evict a tenant if certain criteria is met.  

This is however one part of the legislation that is not presently changing. Landlords will still be able to provide 60 days’ notice to leave for periodic leases and 30 days’ notice for fixed term leases.  

What are the Benefits to Landlords?  

After reading all of this, you are probably questioning what the benefits are to landlords in these changes to rental legislation; it’s a good question, and frankly it’s been a question asked by many landlords in other states where similar changes have been made. 

The benefits we see to landlords include: 

More tenants who are willing to stay long term.  

Tenants not being pushed above their income limit for rent.  

Retain the right to evict tenants without a reason with the correct notice.  

Why These Changes Now?  

So, these changes were first floated by the WA state government a few years ago, however COVID put a stop to them being implemented earlier. However, what we are seeing is the after-effects of COVID and material shortages holding up new home builds, which means housing supply isn’t keeping up with demand.  

Perth currently has one of the lowest vacancy rates in the country, making it a landlord’s market, which in turn makes it difficult for a tenant to secure a home long term.  

We know that increasing interest rates, as well as increasing costs to landlords are seeing them leave the rental market. In fact, the REIWA notes that more than 19,200 rentals have been lost across WA since January 2021. In contrast, more than 70,000 people have moved to the state in the same period.  

It has been more than a decade since rental laws in the state were reviewed, and times have changed. It is hoped that these changes will balance the needs of both tenants and landlords in a challenging environment.  

What Differences Can We Expect to See  

Tenancy advocacy groups have been calling for many of these changes for some time. With a tight rental market, providing safe, secure, and affordable housing is the aim through boosting supply is the aim. Western Australia is one of the last states to make these changes, they will bring the state into line with all other states across the country.  

Beneficially, the WA state government is investing in various ways to try and get more homes built, including offering stamp duty concessions, and attempting to expand the construction workforce in the state.  

New legislation isn’t expected to come into effect until the second half of 2024, so we may not get a full view of the details of the changes until early to mid-next year.  

Property Management Perth

If you’re looking for an experienced property management team in Perth to take you into these new legislation changes, get in touch with Thought Leaders Real Estate. We’d love to help you navigate these changes as a landlord.