After more than a decade since the last review of WA tenancy laws, major amendments are being made to the Residential Tenancy Act 1987 (WA) (RTA).
A lot has changed during this time. The supply of housing has not kept up with demand. Labour and material constraints have resulted in delays in new home builds. Low vacancy rates combined with soaring rent increases have created tough market conditions for tenants. For owners, climbing interest rates and regulatory changes have caused them to leave the rental market. Tenants are seeking security of tenure.
Overview of reforms
The reforms to the RTA are made with a view to strike a balance between protecting an owner’s investment property whilst providing stability for tenants. The amendments will be implemented in phases. The most significant phase 1 reforms will:
· prohibit “rent bidding” in WA
· reduce the frequency of rent increases to once every 12 months
· allow tenants to make minor modifications to rental properties
· allow tenants to keep pets at rental properties
· streamline the release of security bonds at the end of a tenancy
· refer certain disputes to the Commissioner for Consumer Protection
Prohibition of “rent bidding”
Rent bidding is where prospective tenants offer an amount over and above the advertised price for a rental property, with the aim of being selected as the preferred tenant. Amendments to the RTA will see the practice curtailed, with properties being advertised for a fixed amount. Similarly, agents must not solicit or otherwise invite an offer of rent higher than the advertised amount. Whether the changes will also apply to private landlords or unsolicited offers from a prospective tenant remains to be seen.
Limiting rent increases
Presently, the RTA allows for rent increases to occur at six monthly intervals (if tenants are given at least 60 days’ notice and in the case of a fixed term tenancy, where the agreement specifies the amount of the increase or a method of calculation). However, proposed amendments provide for the frequency of rent increases to be reduced to once every 12 months (although, there would not appear to be a cap on how big those increases could be). This would bring WA in line with the approach taken in other jurisdictions.
Keeping of pets
For tenants who want to keep pets, the RTA presently requires permission from landlords (who can refuse a request without explanation). Tenants have no further recourse if the request is refused. Where permission to keep a pet is granted, lessors have the right to seek a pet bond (if the pet can carry parasites that can affect humans). Proposed amendments allow for tenants, in most cases, to keep pets at rental properties where they first seek permission. Landlords will only be able to refuse with the consent of the Commissioner for Consumer Protection and only when it is reasonable to do so. Landlords can, however, negotiate reasonable conditions for keeping a pet on the property.
Under the current RTA, landlords can either prohibit a tenant from making alterations or affixing fixtures to rental properties, alternatively, allow modifications with consent. Proposed changes will allow tenants to have greater freedom to make minor modifications (eg: hanging hooks or pictures on a wall) without having to seek the consent of landlords. However, tenants should be aware that they may be required to restore the premises to its original condition at the end of the tenancy. Under the changes, tenants would also be entitled to make other (as prescribed by regulations) modifications with landlord consent. If consent is withheld, landlords must obtain an order from the Commissioner for Consumer Protection confirming that it would be unreasonable to make the modifications.
Bond disputes contribute significantly to the Magistrates Court’s caseload (affecting timeliness of other residential tenancy matters). Presently, the Bond Administrator may only dispose of a bond if the parties have agreed the amount or there are court orders providing the amount. The implementation of a more effective process for disposal will allow a tenant or landlord to apply either unilaterally or via joint agreement to the Bond Administrator for release of the security bond. The Bond Administrator will then seek the views of all other interested parties before release. In the absence of a response, or if the parties agree to the original claim, the Bond Administrator would dispose of the bond. If the claim is disputed, then dispute resolution would be undertaken between the parties.
Presently, residential tenancy disputes are heard exclusively by the Magistrates Court. Concerns have been raised about the length of time taken for some matters to be resolved, the absence of written reasons for decisions (creating the perception of limited transparency and consistency of decision making) and the stress and inconvenience of attending court hearings. Proposed changes will see some disputes (over bond payments, pets and minor modifications) referred instead to the Commissioner for Consumer Protection for determination. The remainder of residential tenancy disputes would continue to be heard in the Magistrates Court. The aim of this shift is to provide an accessible system that is fast, fair, cost effective and, where possible, maintains constructive relationships between parties.
“Without grounds” terminations
At this time, it does not appear that changes will be made to the “without grounds” termination provisions in the RTA. The current provisions of 60 days’ notice for periodic leases and 30 days’ notice for fixed leases, at this stage, remains.
When are changes coming?
Following the publication of the Decision Regulatory Impact Statement by the Department of Mines, Industry and Safety (providing recommendations in relation to amendments to the RTA following stakeholder consultation), the process for drafting phase 1 changes has now commenced. When the legislation will be enacted, however, remains to be seen.