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REIACT speaks out against proposed Residential Tenancies Act changes

The Real Estate Institute of the Australian Capital Territory (REIACT) has urged all landlords and tenants to speak up about proposed changes to the Residential Tenancies Act.

REIACT CEO Michelle Tynan said the proposed changes to the Residential Tenancies Act (RTA) could have wide and damaging consequences for private rental stock numbers in the territory.

“The minimum energy efficiency standards for rental homes consultation survey has revealed some concerning data for renters in the ACT,” Ms Tynan said.

“While a majority of rental providers agreed with the introduction of minimum standards for rental homes in ACT, 21 per cent of rental provider respondents indicated they would remove their rental properties from the market and 59 per cent indicated they would increase the rent if a minimum efficiency standard required investment by the provider.

“Figures provided by ACT Revenue in April 2020 showed there were 46,959 residential properties eligible for land tax, a worst-case scenario would result in 9861 properties being removed from the private rental market.”

Ms Tynan warned the proposed change to the current RTA could have an enormous effect on rental affordability in Canberra.

REIACT has requested the ACT Government establish a committee to investigate and provide fully costed recommendations.

“Without a minimum Energy Efficiency Ratio (ERR) rating or policy direction, the most balanced outcome for both tenants and rental providers cannot be achieved,” Ms Tynan said.

REIACT also met with the Attorney General back in March 2021 to give an overview of the use of ‘No Cause Termination’ clause in everyday practice.

However, REIACT said the consultation paper does little to address any considered protection measures that will be put in place for landlords who are at the mercy of retaliatory tenants.

Whilst the 26-week notice period in the current ‘No Cause Termination’ clause is the most generous in Australia, current legislation already allows for tenants to appeal this notice. Removal of the clause entirely, could see tenants actually worse off. 

“Many lessors choose to issue a no cause termination notice when they are genuinely selling a property or have a family member moving in, to allow their tenant 26 weeks to find new accommodation. With the removal of the clause this will see lessors only required to provide eight weeks’ notice to the tenant,” Ms Tynan said.

“For many investment owners in the ACT, these measures and the other proposed changes, could be the straw that ‘breaks the camel’s back.

“Changes to the RTA in 2019, along with increasing land tax and rates have many investors finding it, quite simply, too onerous to have a rental property in the ACT.

“The proposed changes could be seen as further erosion of their rights as property owners and therefore they will simply sell, and given the current market conditions in the ACT, for many, this will be a very attractive alternative.”

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