7 October 2022
Rental Reform – Legislative Changes from 1 October 2022 for Ending Residential Tenancies
Written by Lawyer, Elaina Hea
The Housing Legislation Amendment Act 2021 (“HLAA”) was passed in October 2021, which amended the rights and obligations of tenants and landlords with respect to residential tenancies. Namely under the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (“RTRAA”) and Rooming Accommodation Regulation 2009 (Qld) (“Regulations”).
All the changes are being implemented in phases and from 1 October 2022,[1] there will be new laws in place for ending tenancies to provide increased protections for tenants, which means new obligations for landlords.
The current legislation enables landlords to end fixed term agreements and periodic agreements with tenants ‘without grounds’, provided the 2 months’ notice period is provided.
The HLAA aims to achieve the policy objectives of improving transparency around managing and ending tenancies fairly, through the following amendments:
- Removing lessor-initiated no grounds terminations of tenancies; and
- Introducing an expanded group of additional approved reasons for both landlords and tenants to end their tenancy agreements.
Removal of Landlord’s Right to End a Tenancy ‘Without Grounds’
From 1 October 2022, the HLAA removes the option for landlords to end a tenancy by way of issuing a Notice to Leave (RTA Form 12) on a ‘without grounds’ basis. However, this option will continue to be available to tenants if the required notice period of two weeks is given. The legislative changes also provide for an updated list of approved reasons to end a tenancy agreement and amended minimum notice periods that will be applicable to Form 12s. Some new or amended grounds for landlords to end tenancies include the requirement to undertake significant repairs or renovations, a sale or preparation for sale of the rental property, the end of a fixed-term agreement, or change of use.
New grounds for issuing a Form 12 Notice to Leave and new notice periods
Sale Contract (s 286) : Where the lessor has entered into a contract to sell the premises with vacant possession or is preparing to sell the premises and requires it to be vacant.
2 months and not before the end of fixed term
State government program (s 290B) : Where the premises is required for use under a program administered by the State under an Act
2 months and not before end of fixed term
Demolition or redevelopment (s 290C) : Where the lessor requires the premises to be vacant for a planned demolition or redevelopment.
2 months and not before end of fixed term
Significant repair or renovations (s 290D) : Where the lessor requires significant repairs or renovations to be carried out to the premises, which cannot be safely conducted while the premises is occupied
2 months and not before end of fixed term
Change of use (s 290E) : Where the lessor requires the premises for a use other than a residential tenancy for a period of at least 6 months
2 months and not before end of fixed term
Ending of entitlement to student accommodation (s 290F) : Where a tenant’s entitlement to occupy a premises is dependent on the tenant being a student, the lessor may provide notice to leave if the tenant is no longer a student
1 month
Owner occupation (s 290G) : Where the lessor, or the lessor’s immediate family, needs to occupy the premises
2 months and not before end of fixed term
Fixed Term and Periodic agreements
Upon commencement of the new laws, a landlord’s ability to end a periodic tenancy will be much more onerous given the removal of the right to bring a tenancy to an end on a ‘without grounds’ basis. Property owners will no longer be able to end a periodic tenancy agreement by simply providing a Form 12 Notice to Leave (Form 12) to tenants without grounds and adhering to the minimum notice period.
Where parties have formed an agreement on the length of a fixed tenancy, the legislation still requires a Form 12 to be issued by the lessor at least two months prior to the end date of the fixed term tenancy agreement.[2] By way of example, in the instance where parties have entered into a fixed term tenancy agreement with an end date of 31 December 2022, should a Form 12 fail to be issued by no later than 28 October 2022, the agreement would automatically switch to a periodic agreement,[3] despite any initial agreement on the end date. In circumstances where this occurs, lessors will need to satisfy new prescribed grounds in order to terminate the periodic tenancy agreement. On the contrary, tenants will have the option to issue a notice of intention to leave without ground with just 14 days’ notice.[4]
As such, the REIQ recommends that a Form 12 is issued by property owners at the start of a fixed term tenancy agreement to confirm the agreed end date of the tenancy agreement. The issuing of a Form 12 at the outset simply affirms the previously agreed tenancy term and the end date stipulated in the agreement. Closer to the end date, lessors and tenants are at liberty to enter into a new tenancy agreement, and accordingly, the Form 12 may be withdrawn.
Lessors may decide not to have the Form 12 issued contemporaneously with the fixed term tenancy agreement, however, this may trigger the risk of a fixed term agreement defaulting into a periodic agreement if there is noncompliance with the notice period. This may result in the lessor involuntarily being placed in the position of a periodic agreement with extremely limited grounds for termination.
It is important to note that whilst a Form 12 may be issued at the outset of a fixed term tenancy, lessors are still responsible for taking positive steps to ensure the tenant/s vacate the premises at the conclusion of the fixed term agreement if a new tenancy agreement is not entered into between the parties.
[1] Residential Tenancies and Rooming Accommodation Amendment Regulation 2022 (Qld)
[2] Housing Legislation Amendment Bill 2021 (Qld) clauses 59, 88.
[3] Residential Tenancies and Rooming Accomodation Act 2008 (Qld) section 70.
[4] Housing Legislation Amendment Bill 2021 (Qld), clause 88.