Queensland rental legislation is about to change with a list of things that will benefit the tenants and do nothing for the landlords. Many property investors are concerned. While some of these changes are a bit of a surprise, with the right property manager looking after a landlord’s investment properties, nothing should be all that worried about.
The main two changes to the legislation do not have a tenant in a fixed term lease & pets. So let’s look at these in a little more detail about tenancy laws.
PERIODIC LEASES
When a tenant’s lease ends, if they stay in the property, it is still valid and then called a period lease. This means there is no end date. When this happens, the tenant can give two weeks’ notice whenever they want to vacate. Before Oct 1st 2022, the landlord could provide the tenants with two months’ Notice to Leave. This is what’s changing.
From Oct 1st, if a tenant is in a periodic lease, landlords will no longer be able to give a tenant two months’ Notice to Leave. Instead, it will be tough to get a tenant to leave.
LEGISLATION & PROPERTY MANAGERS
This legislation puts considerable pressure on property managers and landlords to ensure a tenant’s lease never falls into a periodic lease. By now, you may be asking whether you have read this right. Yes, you have. The bottom line is from Oct 1st, no tenant in Qld should be on a periodic lease.
The considerable alarm for landlords is it’s common for a property manager to offer a tenant a new lease, but they don’t sign it. They get chased up. Still don’t sign it, and then the current lease has expired, and the tenant is now on a periodic lease.
CAN A PERIODIC TENANCY LAWS STILL BE ENDED AFTER OCTOBER 2022?
Yes – a periodic tenancy can be ended in several ways including:
- For an unremedied breach, that is, a failure to pay rent
- Unremedied breach is any failure other than a failure to pay rent
- Noncompliance (tribunal order)
- Non-livability
- Compulsory acquisition
- Sale contract
- Ending of entitlement (employment)
- Ending of accommodation assistance
- Ending of housing assistance
- Serious breach (public and community housing)
- State government program
- Demolition or redevelopment
- Significant repairs or renovation
- Change of use
- Owner occupation
- Mortgagee in possession
- Abandonment
- Tribunal order (urgent application) for:
- Failure to leave
- Hardship
- Damage or injury
- Objectionable behaviour
- Repeated breaches
TENANTS NEED TO BE SENT A NOTICE TO LEAVE
To ensure a tenant’s lease does not become a periodic lease, tenants need to be sent a Form 12 Notice to Leave.
For some years now, when we send a tenant a lease to sign within the same email, we also send the tenant a Form 12 Notice to Leave. We explain that the new lease offer needs to be signed and returned within five days, or it’s void, and the information to go will take place. This procedure is a safety net for us, so we don’t need to chase tenants up. It sounds harsh, but before introducing this, we had to chase tenants constantly and often, they would sign the lease too close to the current lease end date. With the new changes in tenancy laws from 1st Oct, our lease renewal offer that we’ve been doing for some time now makes more sense than ever.
WHY TENANTS MAY BE SENT A NOTICE TO LEAVE BEFORE SEEING A NEW LEASE OFFER
Unfortunately, many agencies are sending all tenants a Form 12 Notice to Leave before the tenant sends a new lease offer. Property managers are doing this to protect the landlords. Tenants will find this a real shock.
If an agency has sent a tenant a Notice to Leave, it can be made void if a lease is then signed.
Suppose you are a tenant and have sent a Form 12 Notice to Leave before a lease renewal offer. In that case, you should ask your property manager for additional clarity according to tenancy laws. The landlord may wish for you to vacate, OR they may simply be sending you this as a safety net as they still plan to send you a lease offer, but it’s not ready to ship yet.
INSTRUCTIONS
Asset Agents may need to implement this process where we send a Notice to Leave while we wait for instruction from the owner on a new lease offer.
These legislation changes are going to create stress for everyone. Priority for the landlord that their property manager may forget, and the lease may turn into a period lease; stress for the property manager to remember to do this but mainly stress for the tenant as they will probably be getting a Notice to Leave before receiving a lease renewal offer.
WHAT SHOULD LANDLORDS BE DOING WITH THEIR CURRENT PROPERTY MANAGER?
Landlords need to ensure their property manager is all over this. Landlords can’t afford to take the risk of a lease turning into a periodic & the only way to ensure this is for the property manager to have a new process of sending a Notice to Leave, ideally at least two months before a lease end date.
CAN YOU SEND A NOTICE TO LEAVE JUST A FEW DAYS BEFORE A LEASE END DATE?
Yes, you can. If a lease is ending on 15th Dec, you can send a two-month Notice to Leave on the 13th Dec, and while after the 15th Dec, the tenant has not been in a lease, they have been issued a two-month notice to leave, which will stay in place until 13th Feb when they will need to vacate the property.
WHAT TO DO IF YOU HAVE A TENANT ON A PERIODIC LEASE?
If you have a tenant on a periodic lease, you need to send them a new lease offer urgently. You are giving them five days to sign. Before 1st Oct you should also send them a Notice to Leave as per tenancy laws. Unfortunately, if your tenant is in a period lease after the 1st Oct & has not been sent a message to leave, they can choose not to sign a new lease and stay.
WHAT IF A LEASE IS ENDING, AND THE TENANT WOULD NOW LIKE TO MOVE TO A PERIODIC
While this is technically possible, it would be madness for any landlord to allow it as it gives the tenant too much power never to move out. Often it’s a tenant’s preference to be on a periodic lease as it gives them great flexibility to vacate whenever they choose with just two weeks’ notice. Even before the new legislation changes, having a tenant leave with just two weeks, information exposes a landlord to have an empty investment.
If a tenant’s lease is ending and they wish to avoid signing another 6 or 12-month lease. A landlord could agree to sign a concise lease for three months. We currently have a few tenants whose lease has ended, and they plan to buy, so we have resigned them on a three-month lease. While this could be better, we’ve agreed to assist the tenant in a difficult situation.
PETS
Property investors will no longer be able to advertise ‘No Pets.’ It is no big deal; all our ads already say “Pets on application.” If an owner is against pets, they can choose an applicant with no pets. Although once a tenant moves in, they can request a pet, and denying that will be more challenging.
It’s my experience that tenants have excellent rental references & they have pets. The pets are excellent tenants too. It’s not really about the pets; it’s about the owners and how they care for a property. Pets seem to follow the owner’s lead.
We have lots of great tenants with pets. Their homes are clean and tidy and smell fantastic too. We’ve also taken over properties where the tenants have not been that ideal. Dirty & messy. Those pets are cloudy and confused too.
CURRENT TENANT REQUEST FOR A PET
From 1st Oct, tenants can use a form from the RTA website to request a pet. The property manager or landlord has 14 days to decline; if they don’t, the pet is automatically approved. Suppose the owner or property manager agrees to the pet. In that case, they can do so with reasonable conditions, which would always be better than not responding and the pet being automatically approved with no suitable conditions.
OWNER DECLINING A PET
For an owner to decline a pet, they need an excellent reason. For example, the property may not have adequate fencing; however, if that’s the case, the tenant would probably be more than happy to organise secure fencing themselves. It may be possible the pet could cause damage to the property that is above the bond. It is a compelling reason for declining a pet as if a pet urinates on the carpet, the only way to resolve this is having the rug replaced, which would almost certainly always be more than the bond.
An owner can also decline a pet if the tenant does not agree to the owner’s reasonable conditions for approval. For example, the owner might agree under the state it’s kept outside; if a tenant does not agree to this good condition, the pet can be declined.
PET APPROVAL SUBJECT TO REASONABLE CONDITIONS
Owners do have some safety nets. Owners are able to approve a pet subject to reasonable conditions. These can be the pet must stay outside. I can’t think of too many owners happy for their furry children being forced to live outside and this reasonable condition could be used by owners to deter tenants from taking on a pet. “Yes your adorable fur ball is approved but it’s not allowed inside.” Of course a tenant could and probably would sneak a furry friend inside but this would be fairly risky & I do not recommend any tenant do this.
OTHER CONDITIONS
Other reasonable conditions for a pet to be approved would be that the carpets must be professionally cleaned every 12 months. It’s my experience, though, when a pet wee’s on the carpet, the smell is impossible to remove. It can be masked, but it’s never gone.
I took my poodle to my parent’s house in Sydney last year. Romeo is very well-behaved. Within minutes he had done a massive wee in the living room. What the? Luckily the carpet was about 40 years old, and with perfect timing, the new carpet was on order and being installed within a month. Imagine if it was the new carpet Romeo had done this to. Yikes.
Owners can also request registered pets with the council. They are still trying to figure out the rules around snakes, guinea pigs, and birds.
PET BOND & A HIGHER RENT
Tenants will often offer us extra bonds for their pets. A pet bond is not allowed. Legally we can only hold up to 4 weeks’ rent in bond. While a tenant can offer to pay more rent, an owner or property manager can not request it as per tenancy laws.
PET DAMAGE IS NOT FAIR WEAR AND TEAR
If a pet causes any type of damage, the tenant needs to have it fixed.
Here is a list of what I see that’s common
- Cat claws pulling the carpet
- Cat claws scratching wooden stairs or walls
- Urine smell on carpet
- Strong dog odour on the carpet
- Dog scratches on the back of doors
- Fly screens damaged
- Dead grass patches from urine
- Slow grass tracks from active dogs running the same course repeatedly
Of these, the biggest is carpet. Having the rug cleaned will not remove the smell of urine; it needs to be replaced; tenants need to budget for this, realising if they have an inside pet and it urinates on any carpet, they will be in for a fairly significant expense.
ARE THERE OTHER CHANGES FROM 1ST OCT
Yes, there are. The media is saying many property investors will leave the market in droves. Still, with the right property manager looking after a landlord’s investment, it’s a little to worry about.
If you are a property investor and have questions or concerns regarding tenancy laws, reach out. Happy to help.
