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New tenancy laws could prove problematic for Queensland landlords

The Real Estate Institute of Queensland (REIQ) has pushed back against State Government changes to rental laws, which could see landlords “inherit a tenant for life”.

The REIQ has recommended property managers issue a form 12 Notice to Leave document at the start of a fixed-term tenancy agreement, to confirm the end date of that tenancy agreement.

Under recent changes to tenancy laws, due to come into effect on October 1, there will be new parameters for property owners to end tenancies as well as new grounds for renters to end tenancies.

According to the REIQ, the reforms will make a lessor’s ability to end a periodic tenancy more difficult as they will no longer be able to evict a tenant without grounds.

REIQ Chief Executive Officer Antonia Mercorella said issuing a Form 12 at the start of the tenancy would mean both tenants and owners would have increased clarity on the tenancy and its end date.

“In Queensland, even though the parties have agreed on the length of a fixed-term tenancy agreement, the law still requires the lessor to issue a Form 12 at least two clear calendar months’ prior to the end date of a fixed-term tenancy agreement,” Ms Mercorella said. 

“After 1 October, under the new tenancy laws, a failure to provide a Form 12 within the required timeframe will result in the fixed-term tenancy agreement defaulting into a periodic agreement. 

“When this occurs, the lessor will effectively inherit a tenant for life unless it can satisfy one of the limited prescribed grounds for ending a periodic agreement. 

“Notably, a tenant will still retain the right to simply terminate the tenancy with 14 days notice without having to give any grounds.”

Ms Mercorella said the Form 12 affirmed the agreed contractual terms that the fixed-term tenancy agreement would end on the agreed date.

“Issuing a Form 12 does not, as has been alleged by some organisations, result in an early eviction or, in any way impact the tenant’s rights under the fixed-term tenancy agreement,” she said.

“Further, there’s nothing stopping the parties from agreeing to enter into a new tenancy agreement closer to the end date, at which point the Form 12 may be withdrawn.”

Ms Mercorella said the REIQ stood by this best practice recommendation. 

“As the peak body for real estate, our role is to ensure that real estate professionals comply with their legislative requirements and agency obligations,” she said.

“It is regrettable that we have been forced to promote this practice but the new legislation has left us with little choice given that it has failed to protect all parties in a tenancy relationship.”  

According to Ms Mercorella, the REIQ forewarned the government this practice would be recommended when the new legislation was being developed.

“The irony of the new legislation is that tenants will, from 1 October, have greater certainty and security under a periodic agreement than a fixed-term tenancy agreement,” she said.

“This is an absurd outcome given that periodic tenancies are inherently about providing maximum flexibility for both tenants and property owners.”

Ms Mercorella said the REIQ had created a new tenancy laws toolkit for property managers, which includes templated letters to encourage positive and effective communication with tenants and alleviate any concerns and confusion.

“We want to minimise any confusion through clear and effective communication to tenants, and that’s why our template letter explains that the issuing the Form 12 at the commencement of the tenancy does not remove their right to seek to negotiate entry into a new tenancy agreement at the end of the existing agreement,” she said.

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.