Aussie State Government Rejects Calls to End No-Grounds Rental Evictions

A ‘For Rent’ and a ‘For Sale’ sign is seen in Canberra, Australia on Feb. 27, 2023. AAP Image/Lukas Coch

The Western Australia (WA) government announced rental reforms that will help balance the needs between renters and landlords as the state is the last jurisdiction in Australia where renters can be evicted with no-grounds.

WA Commerce Minister, Sue Ellery, introduced rental reforms on May 26 that will improve the rights for renters and provide certainty for landlords.

The modernised tenancy law will reduce the frequency of rent increases and will only be allowed to increase once every 12 months—rent increases can currently occur every six months. The practise of rent bidding will also be prohibited.

The proposed ban on rent bidding will mean landlords and property managers won’t be able to pressure or ask applicants to offer a higher price than the advertised rent to secure the property.

Advertised rent prices will also need to be a fixed amount rather than a range.

Under the proposed changes, renters in WA will be allowed to have a pet or pets in most cases, and they will also be able to make certain minor modifications to the property.

WA tenants will not have to choose between a rental property and/or their pets, but landlords are able to add conditions to keeping a pet.

Landlords will only be able to refuse a tenant to keep a pet or pets on “reasonable grounds” with the consent from the Commissioner for Consumer Protection.

Certain minor modifications to the rental property can be made by tenants, with the landlord only able to refuse consent on certain grounds. Minor modifications such as painting walls and installing hooks are examples of certain minor modifications tenants will be able to make without permission from the landlord.

Any minor modifications made by the tenant to the rental property may need to be restored to their original condition at the end of the tenancy.

The release of security bonds and the end of tenancy will be streamlined in the proposed changes, which will allow tenants and landlords to apply separately for how the bond payments are to be disbursed.

Any disputes over bonds or disagreements over pets and minor modifications are to be referred to the Commissioner for Consumer Protection to handle and decide.

“It’s no secret that some tenants in Western Australia are doing it tough at the moment, facing a combination of low vacancy rates and rising rents. Prohibiting rent bidding and reducing rent increases to once a year will help ease the financial burden on many families,” Ellery said.

Reforms in Housing Supply Shortage

The WA government has not made any changes to the “no-grounds” evictions in the Act, as landlords can currently terminate a fixed-term tenancy without a reason with 30 days’ notice, or 60 days’ notice for ongoing periodic leases.

“As part of the 2023-24 State Budget, we’ve committed an additional $750 million (US$490 million) in housing, homelessness, and lands initiatives, which include 100 percent stamp duty concessions, a range of changes to Keystart loans, and $47.6 million (US$31 million) to expand WA’s housing construction workforce to bolster the supply of housing across our state,” said Housing Minister John Carey in the media release.

Real Estate Institute of Western Australia (REIWA) CEO Cath Hart welcomed the rental reforms and said while the “recent State Budget initiatives focused on supply, we also need a legislative environment that sustains and encourages investment.”

“Investors make up about 85 percent of the private rental market—and the majority of investors only have one property. Unfortunately, they have been leaving the market in significant numbers, so there are nearly 20,000 fewer rental properties now than two years ago,” Hart said in a media release.

“Over the course of the review of the Residential Tenancies Act, REIWA’s aim has been to make renting possible, and the reality is that it’s not possible without investors. If investors aren’t confident about property, they will put their money into other assets, and rental queues will remain long.

“The reforms announced today strike the right balance for owners and tenants. The next step will be to work through the detail of these measures, and we will continue to advocate for practical and pragmatic approaches to their implementation.”

Hart said the rental reforms recognised the need for legislation to create an environment that encourages investment while balancing the needs of tenants.

Western Australia’s Rental Market

REIWA reported that Perth currently has the nation’s lowest rental vacancy rate at only 0.7 percent in April, compared to 2.5 to 3.5 percent, which indicates a balanced market.

Perth’s rental vacancy rate in April 2022 was 1.2 percent, up from 1 percent the year prior.

“Our housing is more affordable than other states, and our tenants tend to spend a shorter time in the rental market before moving onto home ownership,” said Hart.

“Perth’s property market remains the most affordable in the country, yet it’s poised for continued growth,” said Johnson, Summit Developments’ senior development consultant, in a release by realestate.com.au.

Rental Reforms in Other States

Earlier this month, the New South Wales (NSW) government also introduced a rental reform proposal. On May 10, the Labor government introduced a bill that would commit to providing cost-of-living relief and better protection to NSW renters.

The bill also looked to close the loopholes in the existing ban on solicited rent bidding to include landlords and third parties, and create a portable bond scheme to reduce strain on renters. A ban on secret rent bidding will also be implemented by requiring landlords and agents to notify applicants of other offers from other prospective tenants that are higher than the advertised price.

The NSW government is also looking to end ‘no-grounds’ evictions, make it easier to have pets, and better protect renters’ personal information.

“This is a sensible cost of living measure to help ease the pressure on the over 30 percent of people in New South Wales currently renting,” said NSW Premier Chris Minns in the media release.

“These changes will create a fairer rental regime in this state by providing greater certainty as well as flexibility for both renters and owners.”