The current rental industry has experienced significant change over the past 12-18 months and there are more changes on the horizon. The state government has 18 proposed changes with the plan to introduce the draft bill by the end of this year. Here are just a few of them:
Ending a Tenancy Agreement
Currently, landlords are able to end a fixed term tenancy without a reason by giving a tenant a minimum of 28 days prior to the end of their lease. They are also able to end a periodic lease without a reason by giving 90 days notice. The proposed changed is that a landlord will only be able to end a fixed term OR periodic lease for a ‘prescribed reason’ as set out in the Residential Tenancies Act.
The current prescribed reasons are the landlord or a family member is moving in, selling the property, demolishing the property or renovating. There is also some proposed additional prescribed reasons including; illegal activity by a tenant or a tenant threatening, abusing, or harassing the property manager, landlord, or neighbour. A tenant/s who believe their tenancy has been ended without proper cause will be able to dispute it at the South Australian Civil and Administrative Tribunal (SACAT).
An extension of this proposed change is that the minimum notice period to end a fixed term tenancy will increase from 28 days to a minimum of 60 days but must only be for one of the prescribed reasons.
Routine Inspections
The number of allowed routine inspections per year will also be reduced to a maximum of 4. Currently, landlords can inspect once every 4 weeks. This proposed change raises many questions . For example, will an agent or landlord be required to issue a breach notice to reinspect? Does a re-inspection count as one of the 4 allowed inspections? Can a tenancy be ended for repeated breach notices of this nature?
Pets
Renting with pets is quite a hot topic that can potentially have real impact on the rental market. The proposed changed is that a tenant’s application that includes pets, cannot unreasonably be refused, provided the tenant agrees to comply with reasonable conditions set by the landlord. Whether this will apply only to a new tenancy or will also extend to existing tenancies, is still to be clarified. Again, tenants can apply to SACAT if they believe their request was unreasonably refused. Will a pet bond be introduced?
Bonds
On 1st April 2023, the bond threshold increased. For rent of $800 per week and below a 4 week bond can be charged and rental properties achieving over $800 rent per week, a 6 week bond can be charged.
There is speculation that these proposed changes are tenant-focused, giving tenants more control over some aspects of a tenancy while a landlord is losing some of their control over their own investment. If these proposed changes are introduced they will need to be managed effectively in order to minimise any potential negative flow-on effect on the rental industry. We do not want new investors being deterred from investing in real estate and current investors deciding that real estate investment is too high-risk.
How can we help our landlords continue to achieve a successful investment.
The relationships that we build and maintain with our landlords will help their investment properties adapt to these proposed changes. Our systems and processes used by the professional property management team at McGrath Real Estate can help safeguard landlords and minimise the risk to their investment properties. Our property managers can provide comprehensive routine reports that include detailed notes and comments for every room throughout a home, and photos that complement those notes. Given the proposal to reduce inspections to 4 per year, these reports will be vital in ensuring a tenant is maintaining a property.
Our strict rent arrears processes and daily rent payment monitoring ensure rent payments are made on time and tenants failing to make their payments are followed up and issues are addressed, minimizing the financial loss to the landlord. Setting clear expectations with tenants from the start of the tenancy can also help avoid issues down the line.
Now more than ever, and especially if the proposed changes are introduced, a landlord will benefit from the assistance of a professional property manager. This is not just due to proposed changes but also as most of us lead busy lives and prefer to spend their time enjoying it rather than monitoring their rental property to ensure everything is going smoothly. A good investment is one you can set and forget, and watch it grow.
The professional Property Management team at McGrath Real Estate can provide valuable support and expertise to landlords, ensuring their properties are well-managed and protected. Our innovative property management style will ensure that any landlord’s investment is well cared for in the changing landscape of the rental industry.
If you’re looking to work with a property manager who understands the SA Rental Laws, the proposed changes, and how if might affect your property and your income, phone our office on 8350 4200, or drop into 42 Brighton Road, Glenelg.