Key Updates to Renting Laws and How They Affect Property Investors in Cairns

Queensland’s legislative assembly has recently enacted significant reforms to its existing rental laws to address the ongoing rental crisis. Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Bill 2024 has now passed, introducing Stage 2 rental law reforms and continuing professional development (CPD) requirements for property agents. These changes have prompted reactions from various stakeholders, including the Real Estate Institute of Queensland, who have voiced concerns about the implications for landlords and property managers.

As property investors, it is essential to stay informed about these legislative changes. At Cairns Property Collective, we are committed to keeping you updated with the latest developments and providing expert insights to navigate these changes effectively.

Overview of the New Legislation

On 23 May 2024, the Queensland Government passed the Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Bill 2024. This Bill introduces several key changes, which will take effect upon receiving royal assent. Some of the new laws were implemented from 6 June 2024..

Immediate Changes:

• Rent Bidding Prohibition: Lessors or property managers can no longer accept offers from tenants to pay rent above the advertised price.
• Limits on Rent in Advance: A lessor or property manager cannot accept rent in advance exceeding two weeks for periodic tenancies or one month for general tenancies at the start of a tenancy, although they can accept greater amounts if offered during the tenancy.
• Rent Increase Frequency: Rent increases are now linked to the property rather than the tenancy. Rent cannot be increased within 12 months of the last increase, regardless of tenant or lessor changes.
• New Entry Grounds: Additional entry grounds for installing, maintaining, or replacing smoke alarms in rooming accommodation.
• Expanded Confidentiality: Enhanced confidentiality provisions for domestic and family violence cases.
• Portable Bond Scheme: Provisions to introduce regulations for a portable bond scheme, code of conduct, and modifications for accessibility, safety, and security.

Forthcoming Changes:

• Standardised Tenancy Applications: Introduction of a prescribed form for tenancy applications with limits on information requested from tenants.
• Verification of Identity: New requirements for verifying tenant identities.
• Fee-Free Payment Methods: At least one fee-free rent payment method must be offered.
• Evidence for Bond Claims: Lessors must provide evidence to substantiate bond claims within 14 days.
• Extended Entry Notice Periods: Entry notice periods extended from 24 to 48 hours.
• Regulated Reletting Costs: A statutory formula for calculating reletting costs if a tenant breaks the lease.
• Improved Information Handling: New processes for collecting, storing, and destroying personal information.

Additional Key Updates from the RTA:

• Undue Hardship: Managing parties may apply to the Queensland Civil and Administrative Tribunal (QCAT) for permission to increase rent within 12 months due to undue hardship. Tenants can make representations regarding affordability.
• Fixed Price for Rooming: All rooming accommodation must be advertised at a fixed price.
• Rental Bond Processes: Bonds must be lodged for each room in premises where the owner lives and there are three or fewer rooms for rent, including student accommodation.
• Regulation and Enforcement: New regulations for a portable bond scheme, rental sector code of conduct, and applications for safety, security, or accessibility modifications.

CPD Requirements for Property Agents

A CPD regime for property agents will commence 12 months from the date of royal assent. Agents must complete CPD requirements annually, with specifics determined by the Office of Fair Trading and a stakeholder advisory panel. This regime aims to enhance the professionalism and competence of property agents across Queensland.

Our Perspective

At Cairns Property Collective, led by industry veteran Ben Lee Long, we are dedicated to guiding you through these changes. Ben's extensive experience and proactive approach ensure that you remain compliant with the current laws and prepared for future developments. Here are some of Ben’s insights on the new reforms:

• Rent Increase Restrictions: Linking rent increases to the property rather than the tenancy may discourage investment and lead to higher rent hikes. We’re concerned about the impact on tenants as rent increases will be much more substantial. This restriction may also mean that shorter lease options (when requested by a tenant) need to be highly thought out, and ensure to include forward planning in relation to rental price.
• CPD Regime: The introduction of CPD is a positive step towards maintaining high professional standards among property agents.
• Rent Bidding and Advance Payments: Prohibiting rent bidding and limiting advance payments are fair measures to protect tenants.

Preparing for Changes: Tips for Landlords and Tenants

• Stay Informed: Keep up-to-date with the latest developments from trusted sources like REIQ and Cairns Property Collective.
• Review Agreements: Landlords should review rental agreements and management practices to adapt to new requirements smoothly.
• Seek Expert Guidance: Tenants should understand their rights and responsibilities under the new laws. Consulting with experts like our team at Cairns Property Collective can help navigate these changes.
• Engage in the Process: Participate in public consultations to influence the final legislation.

While these reforms represent significant changes, they offer an opportunity to improve the rental market system. Cairns Property Collective is here to guide you through these changes, ensuring you are well-equipped to handle the new laws. With our deep local knowledge and commitment to professional, personalised service, you can trust your property goals are in expert hands.