“Terminating without Grounds” has good legs to stand on.

Rental Reform in QLD is once again a hot topic, particularly in light of the ongoing surges in the rental market and a seemingly never ending demand for housing.

Most rules examined (or proposed) in the latest round have been pretty well received – for example new requirements to ensure that properties meet minimum safety requirements (with a reasonably lead time to allow for practical implementation, one would hope), or the ability for a tenant to terminate a lease with 7 days’ notice to escape domestic violence – not likely to see any argument there.

On the other hand however, “Without Grounds Termination” is a phrase which has had plenty of blood boiling on both sides – unnecessarily. In simple terms, termination of a lease in this case is simply ending a lease on its contracted end date, rather than renewing. The “Without Grounds” component referring to the fact that the lease is ended without any fault on the tenant’s side. This isn’t an unreasonable kick to the kerb in the middle of a lease, its just an owner deciding that after fulfilling their responsibilities under a lease agreement for its full term, they would like to do something else with the property rather than continue the tenancy of the time.

That “something else” could be a quick once-over between tenants, it could be remarketing at a higher rental rate to a different segment of the market, it could be short-term accommodation or even just a sale with the flexibility of vacant possession. As it sits at the moment, that’s the right of the landlord, and the ability to choose what happens with your property (within reason) is the reason that many people find themselves more comfortable investing in property than other asset classes.

In a market where rentals are in short supply, there are those that would argue this puts tenants in an unfair position and should be changed to let tenants stay as long as they want, as long as they continue to pay the rent. In many cases, tenants ARE encouraged to stay, and sometimes that offers significant benefits for both parties. But in a market where an owner occupier is willing to pay a premium over what an investor might for the same property (and a lease has come to its pre-determined end), its hard to argue for taking an owner’s right to choose.