Major WA rent reforms outlaw rental bidding

A major overhaul of Western Australia’s rental laws will see rent bidding outlawed and rent increases limited to one per year.

The WA State Government on Friday (26 May) announced the changes that will also allow tenants to keep pets, unless there is a compelling reason not to, and allows them to make cosmetic changes, such as painting walls, and other minor changes to the premises.

There were no changes to eviction rules, with ‘no grounds evictions’ still permitted.

But the days of renters outbidding each other above the advertised price are gone in WA.

The practice had become particularly widespread as vacancy rates in Perth and other regional centres dropped below 1 per cent amidst a severe rental crisis mirrored around the country.

There are nearly 20,000 fewer rental properties now than two years ago and vacancy rates are at a 42-year low.

Commerce Minister Sue Ellery denied the changes would prompt more landlords to offload their investment properties and worsen the rental shortage.

“Our position is the reforms that I’ve announced today will balance the need for greater rights for tenants, with certainty for existing landlords and potential investors in the rental market,” she said.

“If we restrict the decisions that owners can make about how they manage and use their asset, the risk we take is that they remove them from what is already a really tight rental market.”

REIWA CEO Cath Hart said the reforms struck the right balance between investors and renters.

“No grounds terminations has been a particular concern for investors and potential investors and they will welcome the decision to leave this unchanged. It gives them certainty and they can move forward with confidence, knowing they can manage their asset appropriately,” she said. 
  
“WA is a unique market and we are pleased the Government recognises this. 
  
“Our housing is more affordable than other states and our tenants tend to spend a shorter time in the rental market before moving onto home ownership. 
  
“Our resources-based economy also means our tenant population is more fluid, due to the transient nature of the FIFO workforce. 
  
“The additional reforms announced today give tenants more certainty in their leases while supporting investment, which is essential to increasing supply and reducing queues at home opens.” 

Ms Hart said rent bidding was more common in the private landlord market than among  properties managed by REIWA members.

Pet bond overlooked

She said that families having to choose between their beloved pets and a home available for rent was a tough call for many. She welcomed the changes that gave greater freedom to renters but said further details needed to be ironed out.

“We’re waiting to see the finer details of this reform and hope to see changes to the pet bond to cover potential damage to the property and we will work with government to ensure a fair and balanced outcome for all parties. 
  
“When it comes to modifications, our previous research has shown investors are not hesitant to approve minor modifications, but their main concern is rectifying any changes at the end of the lease. 
  
“The reform announced today addresses that concern, with tenants required to restore the property to its original condition at the end of the tenancy.” 

Housing Minister John Carey said the key to providing rental relief was to boost housing supply.

“We are using every lever we can to accelerate the delivery of housing in Western Australia (and) the changes and the reforms that we’re announcing today strike the right balance.”

The announcement in WA comes soon after a nationwide study highlighted degree to which landlords and renters were in conflict, with around three quarters of rental relationships deemed positive.