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Industry scare tactics branded unhelpful

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Shelter WA, Circle Green Community Legal and independent housing and tenancy law experts have released a detailed rebuttal to claims made by the Real Estate Institute of WA (REIWA) on the impacts of reforms to WA’s rental laws, as the Make Renting Fair campaign relaunches this week.

Significant consultation has been undertaken by Consumer Protection over the past three years, including a detailed discussion paper which sought input on key issues for reform, including improving security of tenure for tenants, removing ‘no grounds’ terminations, introducing minimum standards, the right to keep pets and make minor modifications, and improving the dispute resolution process.

“The real estate industry has claimed that the impact of two particular changes going ahead- the removal of no grounds evictions and allowing renters to make minor modifications like adding a picture hook – will cause thousands of investors to sell their properties, leading to a shortfall in rental properties, which in turn will cost the government over one billion dollars to fill the gap with additional social housing,” Shelter WA CEO Michelle Mackenzie said.

“These claims are ridiculous, but our worry is they’re unnecessarily scaring the community about really wonderful changes and benefits fair laws would bring to renters and landlords alike.”

In response to claims made in public by REIWA, Shelter WA commissioned an independent review by a number of academic and tenancy law experts, with input from the Australian Housing and Urban Research Institute (AHURI) Curtin Research Centre and Dr Chris Martin from the City Futures Research Centre, UNSW Sydney to investigate the claims made by REIWA.

The review considered five claims made by REIWA, and found:

Allowing minor modifications will increase property management costs.Exaggerated, illogical. Time and expense saved by eliminating back – and – forth correspondence about minor issues. Bonds and make good provision protect owner.
Removing ‘no grounds’ evictions will increase property management costs and breach notices.Not supported by evidence in other jurisdictions.
Removing ‘no grounds’ evictions will make it impossible for landlords to remove ‘problem’ tenants.Inaccurate. Landlords will still be able to evict tenants who are not complying with their lease agreement within 14 days.
Fairer laws will cause an exodus of property investors from the market and the loss of thousands of rental properties, which will cost government $1.3 billion in additional social housing.Grossly exaggerated. Even if properties were sold, they could be purchased by renters or by community housing providers to retain as rental stock.
WA tenants are not the most satisfied renters of any Australian state or territory.WA lags behind most other states and has some of the most insecure forms of tenancy.

“The review concluded that the negative impacts predicted are inaccurate, exaggerated, and have not been observed in other jurisdictions where similar reforms have taken place. Put simply, the predictions by REIWA are not reliable,” Dr Chris Martin said.

“No-grounds evictions give cover to discrimination and retaliation. Reasonable landlords don’t need them but they make all tenants less secure in their homes.

“Just this month the ACT announced it intends to remove no-grounds evictions altogether and has released a draft bill for consultation.

“WA is currently lagging behind most of the rest of the country on security for tenants. Getting rid of no-grounds evictions would mean WA leading on tenure security and being a place where people can genuinely make a home in rental housing.”

Changes to improve security of tenure and help make the house feel more like a home are timely given the acute rental and cost of living crisis we face in Western Australia.

The latest data from SQM research show a rental vacancy rate of just 0.6 per cent across the entire Perth metropolitan area, while Perth average rents have increased 30 per cent since April 2021.

“WACOSS has been hearing from community service organisations right across the sector that, rental stress is the number one cause for households seeking emergency relief to simply put food on the table and keep their lights on,” Louise Giolitto, CEO WA Council of Social Services said.

“We are seeing the negative impact of the lack of security of tenure leading to evictions and lack of regulation around rent increases. We know of many cases where rents have been increased by up to $150 in one year, and those tenants were forced into homelessness,” Sara Kane, CEO Circle Green Community Legal said.

“We strongly welcome any changes to improve the security and wellbeing of Western Australia’s 700,000 renters,” Ms Kane said.

“Here at home hundreds of thousands of renters can be evicted at short notice, without any reason, which hangs over their heads constantly and puts them in fear of requesting repairs and maintenance,” Ms Mackenzie said

“WA’s tenancy laws do not meet the contemporary needs of tenants, many of whom rent for life, and we urge the government to ignore this scare campaign, end this outdated practice and embrace the positive changes made in other states,” Ms Mackenzie said.

“Why is it still legal in WA for families to be evicted from their homes for no reason?” Ms Mackenzie concluded.

Fast facts and No grounds evictions and fixed term evictions clarifier

  • In WA, tenants can be evicted without any reason at any point during a periodic tenancy provided 60 days’ notice is given by the landlord.
  • Tenants can be evicted without any reason at the end of any fixed term tenancy provided with 30 days’ notice.
  • These reforms would remove “no reason” evictions for periodic tenancies and limit “no reason” evictions to the first fixed term tenancy, after which landlords would need to give a reason the tenant has breached the tenancy agreement.
  • Under the reforms, landlords will still be able to evict tenants who breach the tenancy agreement at any time with just 14 days’ notice.
  • In a rental market experiencing record low vacancy rates, this makes it extremely insecure for tenants, who are unlikely to assert their rights for repairs and maintenance for fear of eviction.
  • In a study of 890 WA renters conducted in 2019-20 by the Make Renting Fair campaign;
    • Over eight per cent had been evicted without reason
    • 13 per cent had not had a lease renewed at the end of a fixed term due to a request.
    • 39 per cent had rent increased when they renewed their lease
    • 76 per cent reported they would find it very difficult or difficult if rent was to increase by 10 per cent
    • Five per cent had been renting for more than 10 years
  • In WA rents can be raised twice a year, with no limit on the amount increased.
  • In Perth rents have increased by 30 per cent (at July 2022) since the moratorium on rent increases and evictions lifted in April 2020 rental prices (SQM Research, July 2022)
  • WA regions have been hit particularly hard, with increase of 45 per cent in Busselton, 32 per cent in Geraldton, 33 per cent in Port Hedland in the two years to July 2020-July 2022 (SQM Research, July 2022)
  • At July 2022 the rental vacancy rate in Perth remains at a historic low of 0.6 per cent. REIWA considers a balanced market as being somewhere between 2.5 and 3.5 per cent. (SQM Research, July 2022)

Read the Response to the REIWA ‘Synergies’ report here.

Available for Interview

Dr Chris Martin is an expert on Australian residential tenancies law and can be contacted at c.martin@unsw.edu.au and (02) 9065 7501 or 0407 065 760.

Michelle Mackenzie, CEO Shelter WA, via Chantal Caruso at 0447 201 377.