Navigating the New Tenant Reforms: What You Need to Know

Western Australia's rental landscape is evolving, with significant reforms aimed at improving the rights and experiences of tenants. These changes, introduced to create a fairer and more balanced rental market, have implications for both landlords and tenants alike. Whether you're a property owner or a renter, understanding these reforms is essential to navigate the rental market effectively. Let's delve into the key changes and what they mean for you.

INCREASED SECURITY OF TENURE:

One of the most notable reforms is the introduction of longer fixed-term leases. Previously capped at five years, fixed-term leases can now extend up to 10 years, providing tenants with increased security and stability. This change aims to address the uncertainty often faced by renters, allowing them to plan for the long term and establish roots within their communities.

RENT INCREASES:

Under the new reforms, rent increases are limited to once every 12 months, providing tenants with greater predictability and financial security.

Landlords must also provide tenants with at least 60 days' notice before implementing a rent increase, allowing renters ample time to adjust to any changes in their housing expenses.

If a rental agreement is periodic (with no end date), the minimum 12-month time frame between rent increases will apply immediately when this reform begins.

If a rental agreement is fixed (with a specific end date), the minimum 12-month period between rent increases will apply once the fixed term ends.

ESTIMATED TO START JULY 2024

RETALIATORY ACTION

If a tenant believes their landlord or agent is taking action against them for exercising their rental rights (known as retaliatory action), they can challenge that action in the Magistrate’s Court.

For example, a tenant thinks their rent was deliberately increased, or their lease agreement not renewed, just because they asked for some basic maintenance or made a complaint about their landlord or agent.

Retaliatory action is action taken by the landlord or agent as payback or because the tenant sought to enforce their rental rights. Action by a landlord or agent that might be considered retaliatory includes:

Issuing the tenant with a breach notice (other than for non payment of rent)

A rent increase.

Commencing termination action.

Non-renewal of the tenancy agreement.

Only the Magistrates Court can decide if the action by the landlord or agent is retaliatory.

The court can make an order it considers appropriate in the circumstances. This could include an order setting aside the landlord’s action or for compensation.

ESTIMATED TO START May 2024

RENT BIDDING BAN

A tenant cannot be pressured into paying more money to help them secure an available rental property.

Landlords or agents:

Must advertise properties at a set amount. For example: ‘$425 per week’ not ‘offers between $400 and $500 per week’.

Must not encourage a potential tenant to offer to pay more than the advertised rent amount.

If a landlord or agent asks or encourages a tenant to offer more money, contact Consumer Protection on 1300 30 40 54.

Landlords and their agents will be able to accept offers of more than the rental amount when the offer is freely given by tenants.

However, they cannot encourage or pressure a tenant to offer more than the rental amount. This includes phrases like:

“someone else has made an offer, would you like to match it?”;

“there are lots of people interested in this property, you can secure it if you offer more rent”; and

“you have not been working full time for very long, you might want to strengthen your application by offering more rent.”

If a tenant proposes offering a higher rent, the lessor or their agent must respond along the lines:

“That is a matter for you and not something I want to comment on. You need to make your own decision about the value of the property and the rent you wish to pay”.

ESTIMATED TO START MAY 2024

PETS WELCOME

In most cases pets are allowed, however tenants must seek permission. Tenants will need to fill in an approved form to give to the landlord or agent.

Landlords or agents can refuse if: a local council by-law specifically prevents pets; they can prove a ‘good reason’ to the Commissioner for Consumer Protection – for example the property is not fully fenced.

A landlord can place ‘reasonable conditions’ on having a pet – for example a bird must remain in a cage, or the carpets must be professionally cleaned at the end of the tenancy.

A landlord or agent can use the pet bond in addition to the regular bond to clean mess and fix damage a pet has caused.

On reasonable grounds, an owner can refuse consent for your tenant to keep a pet without making an application to the Commissioner for Consumer Protection where keeping the pet would contravene a written law, local law or scheme by-law. An Owner may make an application to the Commissioner for Consumer Protection to refuse consent for your tenant to keep a pet in a range of circumstances, such as where the premises are unsuitable for keeping a pet or where keeping the pet is likely to cause the lessor undue hardship.

An Owner can place reasonable conditions on your consent for the tenant to keep pets. “Reasonable conditions” include:

Conditions about the number of animals that may be kept at the premises.

Conditions about the cleaning, maintenance or fumigation of the premises in relation to the keeping of the pet.

Conditions that you have had approved by an application to the Commissioner for Consumer Protection.

Conditions will be prescribed in the Residential Tenancies Regulations when the regulations are made.

The tenant is responsible for repairing any damage caused by the pet. The tenant will be responsible for any nuisance caused by a pet kept at the premises.

Tenants who currently have pets or wish to have a pet often face limited choice in the number of rental premises available, or they face uncertainty if they move to another rental property. Tenants can be faced with the significant emotional stress of having to abandon a much-loved pet to secure housing. Under the new laws, landlords will be permitted to refuse consent to have a pet where it is reasonable to do so. The landlord may also place reasonable conditions on the keeping of a pet, such as that it must be kept outside.

ESTIMATED TO START JULY 2024

HOME SWEET HOME - MODIFICATIONS

To help make a rental feel like a home, small, personalised changes (known as minor modifications) will be allowed in most cases, however tenants must seek permission.

The list of minor modifications allowed has not been finalised and may include:

Hanging pictures on the wall.

Putting up flyscreens.

Installing a water-saving shower head.

Planting a vegetable garden.

Landlords or agents can refuse if a local council by-law specifically prevents the change or there is asbestos or heritage listing. They can prove a ‘good reason’ to the Commissioner for Consumer Protection – for example it would be too costly to restore the property. A landlord or agent may be able to place 'reasonable conditions’ on minor changes - for example a vegetable garden must be well maintained, or a certain standard hook must be used. At the end of the rent agreement, a tenant will have to remove any changes made and restore the premises, unless the landlord or agent has agreed to leave them – for example remove picture hooks, fill in holes and repaint the wall.

The types of minor modifications that the new laws will apply to have not yet been decided. However, it is likely that the list of minor modifications may include things like picture hooks, LED light bulbs that do not need new fittings, curtains, blind cord anchors, adhesive child safety locks, vegetable or herb garden, flyscreens on doors and windows.

A landlord will be able to impose reasonable conditions on making modifications. The types of minor modifications will be decided through consultation in the coming months.

An Owner can refuse permission to make minor modifications however it depends on the type of modification that the tenant is asking to make and why you want to refuse. If the modification is on the list that will be prescribed in the Residential Tenancies Regulations, you will only be able to refuse consent in limited circumstances. The types of modifications on this list have not been decided yet but will probably include things like picture hooks, LED light bulbs that do not need new fittings, curtains, blind cord anchors, adhesive child safety locks, vegetable or herb garden, flyscreens on doors and windows.

Owners will be able to refuse the request without making an application to the Commissioner for Consumer Protection in a few situations, such as where the modification would disturb material containing asbestos or a written law or scheme by-laws prohibit making the modification. Owners will be able to make an application to the Commissioner for Consumer Protection to refuse in other circumstances such as where the modification would result in additional maintenance costs, would make the premises unsafe or the action required to reverse the modification is not reasonably practical.

You may also impose reasonable conditions on making the modifications. For some modifications this includes that the work must be undertaken by a qualified person. For other more significant modifications, landlords will be able to refuse consent, but consent cannot unreasonably be withheld.

You can place reasonable conditions on your consent for the tenant to make minor modifications. “Reasonable conditions” include:

Conditions that you have had approved by an application to the Commissioner for Consumer Protection.

This may include conditions that are specific to your premises, such as the placement and direction of security cameras on the exterior of the premises.

For certain types of modification, that the work must be done by a qualified person.

Further details will be decided through consultation in the coming months.

Unless otherwise agreed, the tenant will be required to either: restore the property to the condition it was in immediately before the changes were made (allowing for fair wear); or pay an amount equal to the reasonable cost of restoring the property.

ESTIMATED TO START JULY 2024

BOND RELEASE – LIKELY TO START JANUARY – JULY 2025

A streamlined bond release process will be much simpler and prevent disputes from going to court.

A tenant, landlord or agent can ask for the release of the bond.

The Bond Administrator will notify all of the other parties about the application.

If the parties agree, then the bond will be paid.

If the landlord and tenants do not agree, the Comissioner for Consumer Protection will hear from both sides and make a decision.

The rules about when the landlord is entitled to the bond money will not change.

If the tenant damages the property, or there is unpaid rent, the landlord may recover the debt from the bond.

ESTIMATED TO START January - July 2024

CONSUMER PROTECTION COMMISSIONER DECISIONS – LIKELY TO BEGIN JULY 2024

Disputes over tenants’ rights to have a pet, make minor changes to a property and bond release payments will no longer have to go to court.

The Commissioner for Consumer Protection will hear from both sides and rule on these disputes as an independent authority. This process is known as ‘Commissioner Determination’. Tenants, landlords and agents can make their case online.

Decisions of the Commissioner for Consumer Protection will be transparent and based on evidence provided by the tenant and landlord. A written decision of the Commissioner for Consumer Protection will be provided to the landlord and tenants so they can read the reasons why the bond was disposed in a particular way.

If parties are not satisfied with a decision of the Commissioner for Consumer Protection, they can appeal it to the Magistrates Court. The Magistrates Court will then make an order.