Rental apartment

Government seeks new powers to introduce minimum rental standards

The Government introduced the Housing Legislation Amendment Bill to Parliament this month, seeking to give themselves the power to set and prescribe the minimum standards for all rented accommodation in Queensland. What does this mean for Queensland’s rental market?

With this new Bill, the Government is hoping to set minimum housing standards for rented accommodation throughout the state.

What exactly does that mean, “the power to set and prescribe the minimum standards”?

It is understood that the Government wants to create a set of conditions that all rental accommodation in Queensland must comply with, and, should they succeed, these conditions will be retrospective. This means in addition to applying to new homes being built, anybody who owns an investment property today will have to make their property comply with the new minimum standards.

In Queensland 34 per cent of us rent our home, so this not a small number of properties. It’s more than a third, or about 566,478 dwellings, according to the 2016 Census data. And the responsibility to make the dwellings compliant with the new standards would fall to the landlord and/or the property manager.

Some examples of what these minimum standards could include are minimum room size, minimum number of windows, or green star energy efficiency rating of the dwelling.

What does the Government want?

At this stage, this Bill only seeks the power to set minimum standards. Exactly what those powers look like is another step set down for a later date.

The REIQ is aware that other organisations within the property manager training space are reporting inaccurate information about the Bill and what it is seeking to do.  It is important to understand that this Bill only seeks to give the Government power to set a minimum housing standard.

When the Bill was introduced into Parliament, in its first reading, Minister for Housing and Public Works Mick de Brenni said:

“The amendments will provide a head of power for a regulation to prescribe minimum housing standards. Further public consultation will be undertaken about how and what these standards may look like and how they will be enforced, as part of the drafting of any of the relevant amendments to the Residential Tenancies and Rooming Accommodation Regulation 2009.”

What does the REIQ think?

As part of its ongoing advocacy and stakeholder work with the Government, the REIQ has provided a submission outlining our objections to the Bill.

“It is the REIQ’s view that not all owners of the approximately 566,478 private rented dwellings in Queensland will be prepared (or in a financial position) to absorb additional costs that may be associated with ensuring those dwellings meet minimum housing standards and it is likely instead that many may either pass such costs on to tenants through gradual rent increases or if such costs are too prohibitive, not renew the tenancy at all,” we wrote in our submission.

The REIQ also outlined concerns that if compliance with minimum housing standards becomes too onerous, investors may choose to invest elsewhere. If this happens, fewer investors combined with potential rent increases that existing tenants may face, it is likely that the level of affordable rental accommodation will fall.

Here’s a better solution

The REIQ has proposed an alternative solution that would offer tenants the protection and certainty of safe, secure rental accommodation without introducing an onerous ‘one size fits all’ minimum standard that would impose prohibitive costs on property investors.

REIQ CEO Antonia Mercorella said flexibility would better ensure success.

“We are advocating that the lessor (the landlord) commission a health and safety inspection for every rental property,” Ms Mercorella said.

“The health and safety report should be completed by a licenced building professional and should address whether the residence complies with all relevant building codes, with regard to the age and structure of the dwelling,” she said.

“If the dwelling does not comply, the report will provide a recommendation on the work required to make the property compliant and the report should also be made available to the tenant prior to taking the tenancy.”

The REIQ solution accommodates landlords and property managers while offering tenants the same security of safe rental accommodation that complies with all existing building codes and regulations.