The Queensland Government has introduced legislation that will force landlords to provide minimum standards in rental properties.
With more than 566,000 privately rented properties in Queensland, more than a third (34.2 per cent) of Queenslanders are renters and more people are now renting than paying off a mortgage.
In late October, the Queensland Parliament passed the Housing Legislation (Building Better Futures) Amendment Bill 2017. The Bill amends the Residential Tenancies and Rooming Accommodation Act 2008 (RTRA Act) and will introduce minimum standards for rental properties. An attempt to pass the Residential Tenancies and Rooming Accommodation Amendment Bill 2011 in 2014 imposing minimum standards was defeated.
The RTRA Act establishes the rules for residential and rooming accommodation and sets out the rights and obligations of tenants, lessors (landlords) and agents.
Amending the RTRA Act enables new provisions to be made within the Residential Tenancies and Rooming Accommodation Regulation 2009 to specify the minimum housing standards in relation to building and health matters that are the lessor’s and/or agent’s responsibility. The minimum standards will be in addition to existing obligations, and the premises and its inclusions will need to comply with any prescribed minimum housing standards at the start of, and during, a tenancy. It is envisaged that having clear standards will help define the current requirements that the premises are “fit to live in” and “in good repair”.
The new legislation introduces a “minimum housing standard” for private rental properties to adhere to. The standards have yet to be determined (and can change at any time for any reason) but are expected to cover issues including:
- sanitation and drainage
- cleanliness and repair
- ventilation and insulation
- protection from damp and its effects
- construction, condition, structures, safety and situation of the premises
- the dimensions of rooms in the premises
- privacy and security
- provision of water supply, storage and sanitary facilities
- laundry and cooking facilities
- freedom from vermin infestation
- energy efficiency
Landlords will be required to ensure that the premises comply with the minimum standards before letting the property to a tenant.
It is expected the Residential Tenancies Authority will monitor compliance with the minimum standards and have the power to impose penalties for non-compliance. Separately, the Local Government Association of Queensland will also lobby the State Government to grant regulatory powers to councils to enforce building maintenance on residential properties to an acceptable standard.
The new minimum standards will be prescribed by regulation after consultation.
From an insurance perspective
We will monitor the introduction of the minimum standards and the ramifications these standards, and particularly the implications if a property fails to meet them, may have on landlord insurance cover.
In general: The condition of a premises can have a direct impact on whether an insurer will take on the risk and offer cover. The introduction of minimum standards may contribute to an insurers’ assessment of the property’s risk profile. Substandard properties (those which fail to meet health and safety requirements, which already exist in various acts, regulations and codes) are unlikely to be insurable. In addition, it is already a condition of most building policies that the premises must be maintained and failure to undertake maintenance can void a policy. It should also be noted that the provision of security at a property can impact positively on premiums.
When the Bill was being discussed, it was noted that a lack of enforceable minimum standards was impacting real estate professionals as their Professional Indemnity costs were rising. The introduction of standards could have the potential to affect PI premiums – and we will continue to monitor developments.