What do minimum rental standards mean for landlords?

What do minimum rental standards mean for landlords?

For residential landlords who want to maintain the value of their assets, keeping things in good order is usually a priority.

Minimum standards legislation is a means by which governments can prevent the minority of landlords who don’t – or won’t – maintain their properties in reasonable repair, from endangering and exploiting tenants. Such laws are a state matter and legislation currently varies from state to state.

South Australia and Tasmania have already introduced legislation covering minimum standards, while a review of the Residential Tenancies Act is underway in Victoria, which could result in them following suit.

Further north, Queensland, is about to introduce a minimum standards regime. Under changes passed in Parliament in late 2017, private landlords will need to ensure their properties meet specified minimum standards before they’re made available on the rental market.

Standards will be determined following a consultation process and are expected to cover a gamut of areas, including sanitation, ventilation, privacy, security and protection against damp. Minimum standards can also include the requirement to provide the basic amenities most home owners and renters take for granted, such as a cooking area, a bathroom and hot and cold running water.

Discussion is ongoing over who will be responsible for ensuring properties are compliant and what sort of oversight is required, with many stakeholders supporting the use of an independent third party to conduct inspections and ensure repairs are carried out.

Sorely needed standards

Minimum standards work in the interests of both landlords and tenants, according to James Farrell, Director of Community Legal Centres Queensland.

Issues around repairs and maintenance have the potential to undermine the health, safety and wellbeing of tenants, but fear of eviction can deter many individuals from pursuing legitimate repair requests.

“Having clear expectations for landlords, agents, regulators and tenants will help people understand their rights and responsibilities,” Farrell says.

For investors who maintain their properties well, minimum standards have no practical impact, but it can be a different story for those whose properties are unsafe, unsanitary, or which lack basic amenities in working order.

“Landlords who own sub-standard properties should consider whether they want to improve the property, or make alternative investment decisions,” Farrell says.

“Most Australian landlords do the right thing and the vast majority won’t be required to make any improvements to their properties. We’re not talking about making every property the Hilton, just making sure that they meet the community’s expectations of housing that is habitable, safe and meets tenants’ basic needs.”

Benefits for both sides

While the benefits for tenants are obvious, there’s also an upside for landlords in a regulatory regime that ensures dodgy and dangerous ‘dives’ aren’t able to be put up for rent on the open market.

“Removing ‘slum’ landlords or regulating the type of housing they provide will have benefits for the industry and the reputation of investors and property owners,” Farrell says.

As well as improving the health and wellbeing of renters, minimum standards may save landlords money in some instances by ensuring they undertake repairs in a timely fashion, rather than waiting until small problems become large ones.