How Will Owners & Tenants Be Impacted If RTA Is Amended?
With 61% of the 7,000 Western Australian Property Owners surveyed indicating that they will sell and exit the market if the Residential Tenancies Act is amended, this will further deepen the housing crisis that the State is facing.
Last March, the Consumer Department Division of Western Australia circulated a survey on proposed changes to the Residential Tenancies. As many of you are aware, we covered this issue on our blog with the pertinent issues discussed in the paper proposing the major RTA review.
Revealing the potential impacts of the proposed changes in RTA, Synergies Economic Consulting report focused on 2 key areas which were of pressing concern:
- The right of a property owner to terminate a tenancy
- The requirement for tenants to seek consent prior to making property modifications
Other changes that were proposed included policies on pets, landlord disclosure, privacy on tenancy applications, regulation of rent increases etc.
With the current rent crisis in WA, the results indicate that a significant proportion of investors will possibly exit the market if the changes take place. What does this mean for property owners, tenants, taxpayers and the industry as a whole?
The report indicated that WA tenants would pay up to $105 million extra in increased rent per year and an estimated $142,5 million in higher property management costs incurred across the rental sector by Property Owners. As for the government, they would need to fork up an estimated $.13 billion in government funding required by the social housing sector due to the retraction of investors in the market.
Considering that Mum & Dad investors make up 90% of the rental owners, most investors use property investment as financial security for their future. If they were to exit from the market, that would put additional pressure on the WA government and therefore, the taxpayers, in supplying housing stock.
In short, both Owners and Tenants will be worse off if the RTA changes. But the worst part? Low-income tenants are the ones who will be most affected!
As it is right now, the government is offering incentives for large property investors to enter the market through its Build-to-Rent scheme – see our article here.
In the interest of keeping the rents low and not further putting stress on an already tensed rental market, REIWA recommends that the following considerations be evaluated:
- Maintaining the need for a tenant to get consent before modifying the rental property.
- Maintaining the need for a tenant to get consent before bringing a pet into the rental property.
- Keeping the ability for an owner to terminate tenancies with ‘no grounds’.
- Preventing the law from imposing additional minimum standards on rental premises before they can be rented.
- Retaining the ability for the parties to enter into a fixed-term lease.
- Ensuring tenants are bound to the terms of a residential lease.
For the last 70 years, we, at Time Conti Sheffield have continued to advocate for our Owners, Tenants and the industry. And we will continue to be at the forefront of the industry by providing “Service You Deserve and Advice You Can Trust”.
Our Mission Statement
Time Conti Sheffield offers WA Property Investors the highest standards of Bespoke Property Management services. We are passionate advocates for our clients, business and industry. Our values are based on honesty, transparency and respect. We take pride in all that we do. We win the trust of our Owners because we are experienced and our Tenants because we genuinely care. We respect and value our employees. Committed to continuous education and a high customer service ethos, we are industry leaders that stay ahead of the curve.
