Getting the balance right: Further changes to the Residential Tenancies Act

Protecting the rights of both landlord and tenant is a delicate balancing act. The Residential Tenancies Amendment Bill 2019, introduced into the Legislative Assembly on 26 September 2019, builds on the recent changes to the Residential Tenancies Act 1997 (which commenced on 1 November 2019) and provides the tenant with greater rights and protection against potentially unreasonable practices. Whilst some of these changes may be necessary, it does pose the question whether the balance between the rights of the tenant and the landlord has tipped too far.

Residential Tenancies Act Changes

The Bill – introduced in September – amends the Residential Tenancies Act 1997 by:

  • Introducing a right for tenants to terminate a residential tenancy agreement (even during the fixed term of the agreement) by giving 14 days written notice to the Landlord if:
    • the tenant accepts accommodation in a residential aged care facility or social housing dwelling; or
    • the landlord offers the property for sale either within 6 months of the beginning of the tenancy agreement and without the landlord giving notice of an intention to sell to the tenant prior to entering into the agreement or if two inspection requests are made more than eight weeks apart;
  • Creating an opportunity for the minister to make minimum standards for rented residential premises relating to physical accessibility, energy efficiency, safety and security for residential premises (and it appears that regulations will be made in respect of at least minimum energy efficiency ratings);
  • Requiring a landlord to show that any illegal use of premises justifies the termination of the residential tenancy agreement if the landlord seeks to terminate the agreement due to the tenant’s use of premises for an illegal purpose;
  • Limiting the number of inspections a landlord is permitted to undertake when selling a property to no more than two (2) per week; and
  • Clarifying that the standard terms applicable to periodic tenancies are those in force under the Act from time to time.

How do changes impact landlords and tenants?

While some changes are necessary to protect those more vulnerable tenants, other changes, like the tenant’s right to terminate due to the landlord’s failure to give notification of the sale of the property, may be considered overly restrictive and onerous by some. This overly restrictive framework is likely to lead to a rise in the number of disputes before the ACT Civil and Administrative Tribunal (ACAT) and therefore higher costs – more so for landlords – and could therefore disincentivise future investment in the residential property market. Should this occur and Canberra’s rental stock shrinks, the very changes brought about for the benefit of the tenant will be (eventually) to the tenant’s detriment.