New laws may devastate rental market and caravan parks

Will controversial new laws leave landlords out of pocket, dissuade investors and increase rents?

New rental reform laws being proposed in Queensland could devastate caravan parks and residential investment portfolios and create much higher rents for more than a million tenants.

Trevor Rawnsley, the CEO of Australian Resident Accommodation Managers Association (ARAMA) said the government proposals would likely push even more stock onto the short-term rental market “because the restrictions on operating long-term residential rental will be just too high, too difficult and will force costs up.”

While Mr Rawnsley said his association welcomed the government’s proposals on minimum standards for the condition and safety of properties, he claimed other proposals would only damage the market and push rents higher.

And John Kennedy, owner of the Wallace Motel & Caravan Park at Maryborough, three hours north of Brisbane, told Accom News: “The rental market is in disarray and the Queensland Government just made it a lot harder for landlords to get rid of dodgy renters. ie: the ones that trash your assets, ruin your finances, and tarnish your reputation; the minority that punches well above their weight on the risk factor for rental investments.

“It doesn’t take a rocket scientist to figure out there was going to be a reduction in supply – and now we have a housing crisis. What did they expect?” Asked Mr Kennedy.

“We reduced our ‘supply’ considerably as a direct result of these naïve laws and I know of many more caravan parks that have done the same. The net result is thousands of fewer options in our sector alone, a sector that once played an important part in ‘interim’ housing. It’s just not worth it!”

Landlords could face hefty bills to fix rental properties that don’t meet the minimum standards being proposed to take effect from September 2023.

Real Estate Institute of Queensland chief executive Antonia Mercorella said she had advocated for minimum standards for rentals but did not want them to be so onerous it would force landlords to sell their properties, rather than spend money to fix them.

More than 36 percent of Queenslanders live in rental accommodation, the number boosted by interstate tenants fleeing to the Sunshine State during COVID.

The new Queensland legislation, which has now been referred to the Parliament’s Community Support and Services Committee for review in August, includes a raft of other changes.

Under new laws, Queensland tenants fleeing domestic, or family violence could end a lease within seven days.

For landlords wanting to end a lease when a property was tenanted, it had to be done with an approved reason.

Pets would be allowed in rentals — but landlords could introduce “reasonable conditions” for them, which includes asking tenants to keep pets outdoors or requiring a property be fumigated at lease end.

Tenants will be able to make minor modifications to a property for health, safety and access reasons, without needing the permission of the landlord, like adding deadlocks and furniture anchors.

Brisbane Greens councillor Jonathan Sri said the new laws would result in some Queenslanders being forced on the streets, because some landlords would not want to repair properties to meet the standards.

Vacancy rates in Brisbane and the Gold and Sunshine Coasts were below 1 percent for the first three months of 2021, and rents on the Gold Coast were now more expensive than in Sydney.

Michelle Weston, the Chief Executive Officer of the Caravan Parks Association of Queensland, said that caravan parks were “close living environments and that is really important to ensure that the protections of the many who live in them are not overridden by the rights of an individual.

“We would hate to see a situation,” Ms Weston said, “where one person in a caravan park can create an environment that makes other residents fearful and the park does not have the ability to remove that person under legislation, which leaves everyone else distressed in the park.”

Mr Rawnsley said the new proposals could see investors “either move away from residential as an investment and move into short stay, whether it’s through Airbnb or onsite management.”

“The proposals will just make it harder for Queenslanders to rent,” he said. “When there’s less residential stock because it’s less appealing to the private investment market, rents will go up and more and more people will find it harder and harder to rent a property.

“It’s tough now and if you make it more costly and with more restrictions on investor/owners they’re just going to move out of that market and invest in something else.

“If you’ve got a sticky tenant who chooses not to pay rent it’s going to be easier for them to stay there and not be evicted. A lot of investor/owners are going to be building contingencies into their rent in case they have to cop a couple of weeks of non-payment.

“We are a pet loving nation but if an investor/owner doesn’t want a pet in their property, they should not be forced into accepting a tenant with a pet. We believe pets should be approved by the landlord and not forced on the landlord – and then there are costs associated with pets in a property.

The proposal about breaking leases because of domestic violence is controversial.

“Incidents of domestic violence are horrible things,” Mr Rawnsley said, “but the Queensland government has a fidelity fund that is taken from the interest on monies in trust accounts, or the residential tenancy authority takes the interest on our bond money – there are hundreds of millions of dollars in these fidelity funds – yet the Queensland Government is expecting private investor/owners to cough up in the event of domestic violence at their property. It’s not fair to them.

“The people out of pocket will be the landlords and if that doesn’t dissuade them from having their stock in residential it will certainly make them increase rents trying to cover their losses.”

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