Mark your calendar for changes
Whether you are a current landlord or just a hopeful prospective one, you should have the 1st of October in your calendar. Now just a week away, this date heralds the next slate of tenancy legislation changes being implemented across rental properties here in QLD.
The changes to rules around pets has gotten plenty of attention, with the rules now closer to those applied by apartment buildings and other body corporate setups – that is, you can no longer have a blanket ban on pets, and instead need to act reasonably in assessing things case by case. Its not quite open slather on bringing along the menagerie, but it does mean that for those renting a house with a fenced yard, owners will have limited opportunity to say no. They can however still put in place limits as far as inside vs outside, and any damage caused by pets is outside of normal wear and tear expectations.
Furry friends aside, it’s the changes to the way periodic leases are dealt with which pose the most potential risk to a landlord, and this can be particularly of concern where properties have been self-managed and perhaps things have gotten a bit lax, with rents at genuine 2012 prices, not 2022 ones.
From October 1st, a periodic lease can only be terminated due to an owner (or immediate family) requiring the property to move into, major renovations being undertaken, or an owner selling the property. Outside that, the long-established ability to simply end the tenancy for whatever reason (“without grounds”) with 60 days’ notice no longer exists.
Now for most, this shouldn’t really matter. An investor wants a tenant in their property paying rent after all, don’t they? Well in the vast majority of cases they absolutely do! But in cases where an owner wishes for more flexibility – whether it be to reposition the property in the rental market (as landlords have the right to do), or any other reason, then it might be more of a concern.
An example of this could be where someone buys a property with an existing periodic tenancy in place, where the rent has been the same for a decade. New owner buys on the basis that there is a higher potential rental return that justifies the current price but leaves the tenant in place til settlement. Under the new rules, that higher rental return might be further out of reach than anticipated.
As always, talk to your property manager or friendly local agent for more information, on how this can affect your investment strategy.