Laing + Simmons criticises Residential Tenancy Bill

Laing + Simmons criticises Residential Tenancy Bill

19 January 2010 by Staff Reporter 0 comments

The recent changes to the Residential Tenancy Bill 2009 could have a negative impact on the rental market, Laing + Simmons general manager Leanne Pilkington has said.

According to Ms Pilkington, the new Bill was designed to even out the balance of power between tenants and landlords.

However, the Bill seems to have shifted the balance further away from landlords which could cause a mass exodus from the market.

“Recent reports suggesting rents across Sydney will rise significantly this year, on the back of a severe shortage of available rental stock, is troubling news for the market,” Ms Pilkington said.

“Surely the government should be encouraging investment in residential property, and encouraging existing landlords to stay in the market. But many of the proposed changes to the legislation do the opposite.”

Ms Pilkington said the Bill has removed the notion of a fixed term lease, so that a tenant would be free to break the lease as long as they gave ’14 days notice’ to their landlord.

“What impetus is there for a landlord to enter a fixed term lease, and how could they possibly budget their investment, if it can be dissolved on a whim,” she said.

“Conversely, landlords will be required to increase the notice period from 60 to 90 days to tenants once a fixed term expires. Once the tenant advises vacant possession, which they can do at any time in this 90 day notice period, they are only liable for rent up to that point.

“This is a prime example of how far the law could potentially be steered away from landlords,” she said.

Ms Pilkington also pointed to the proposed change that will enable tenants to make cosmetic changes to the premises without the landlord’s consent as another example of the unfairness of the legislation.

“While the costs of installation will have to be met by the tenant, the legislation stipulates that a landlord must not unreasonably withhold consent to a fixture, alteration, addition or renovation that is of a minor or cosmetic nature,” she said

“Not only is a minor cosmetic nature not defined, but the scope for disputes at the commencement and end of a lease, when the alteration may need to be reversed, is huge.

“The industry obviously welcomes legislative changes that reduce the number of disputes between tenants and landlords and improves dispute resolution mechanisms, but unfortunately the changes proposed at this stage open the door for a vastly greater number of disputes to occur.”

The proposed legislation contains 12 parts including changes to the rights and obligations of landlords and tenants; lodging and claiming rental bonds; and the use of tenancy databases.

The recent changes to the Residential Tenancy Bill 2009 could have a negative impact on the rental market, Laing + Simmons general manager Leanne Pilkington has said.

According to Ms Pilkington, the new Bill was designed to even out the balance of power between tenants and landlords.

However, the Bill seems to have shifted the balance further away from landlords which could cause a mass exodus from the market.

“Recent reports suggesting rents across Sydney will rise significantly this year, on the back of a severe shortage of available rental stock, is troubling news for the market,” Ms Pilkington said.

“Surely the government should be encouraging investment in residential property, and encouraging existing landlords to stay in the market. But many of the proposed changes to the legislation do the opposite.”

Ms Pilkington said the Bill has removed the notion of a fixed term lease, so that a tenant would be free to break the lease as long as they gave ’14 days notice’ to their landlord.

“What impetus is there for a landlord to enter a fixed term lease, and how could they possibly budget their investment, if it can be dissolved on a whim,” she said.

“Conversely, landlords will be required to increase the notice period from 60 to 90 days to tenants once a fixed term expires. Once the tenant advises vacant possession, which they can do at any time in this 90 day notice period, they are only liable for rent up to that point.

“This is a prime example of how far the law could potentially be steered away from landlords,” she said.

Ms Pilkington also pointed to the proposed change that will enable tenants to make cosmetic changes to the premises without the landlord’s consent as another example of the unfairness of the legislation.

“While the costs of installation will have to be met by the tenant, the legislation stipulates that a landlord must not unreasonably withhold consent to a fixture, alteration, addition or renovation that is of a minor or cosmetic nature,” she said

“Not only is a minor cosmetic nature not defined, but the scope for disputes at the commencement and end of a lease, when the alteration may need to be reversed, is huge.

“The industry obviously welcomes legislative changes that reduce the number of disputes between tenants and landlords and improves dispute resolution mechanisms, but unfortunately the changes proposed at this stage open the door for a vastly greater number of disputes to occur.”

The proposed legislation contains 12 parts including changes to the rights and obligations of landlords and tenants; lodging and claiming rental bonds; and the use of tenancy databases.

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