Over the past few weeks, there has been an uproar among property industry bodies as the QLD Government had put forward a raft of proposed changes to residential tenancies that risked tipping the ledger heavily towards tenants, with landlords left out in the cold in some circumstances.
The originally proposed changes included: an automatic right for tenants to request rent reductions without proof of need, an automatic right for tenants to extend their lease by 6 months during the crisis, a right for tenants to refuse entry for all but emergency maintenance, the ability for tenants to terminate a lease with just 7 days notice, and of course the moratorium on evictions due to non-payment of rent subsequent to COVID-19.
Designed to help support tenants that might have been put in a precarious position, the risk here was failing to take into account the position of thousands of property owners who might similarly find themselves with a reduced income or loss of job, but with the added costs of a mortgage and other property expenses to cover. While the major banks have been quick to offer additional support in regards to suspension of payments for those with mortgage stress, those payments still need to be made, either by way of recapitalisation of the loan or an extension of the payment period, meaning those costs don’t go away.
Thankfully, we have now seen a more moderated version come forward from the State Government, taking into account the reactions and advice of the property industry and in particular the REIQ, who have been campaigning diligently over the past weeks for a fairer and more balanced approach to a critical sector of the economy.
Under the newest version of the proposal, we now see: a minimum threshold of a 25% reduction in income (with a requirement of proof of same) before qualifying to apply for rental relief, better guidelines for access to and inspections of rental properties, a 75% loss of income threshold before tenant’s can terminate a lease, with a cap on break fees and a limit on automatic extensions to 30 September 2020. While still not perfect, this represents at least a step in the right direction and should provoke sighs of relief from many property investors across the State.
On a positive note, long term rental demand remains solid locally, and while vacancy rates appear to freed up, properties are still being rented in good time in many circumstances.