Rental reforms in Queensland and Victoria could cause a surge in tenancy disputes that could eventually harm the market, according to the Real Estate Buyers Agents Association (REBAA).
The potential changes under the proposed rent reforms might make the market harder to navigate for tenants and landlords due to the "shades of grey", which are open to interpretation, said REBAA president Cate Bakos.
For instance, the reforms' references to "prescribed minor modifications", "significant repair and renovations", and '"reasonable pets" were too subjective and loose — Bakos said what may be considered sensible for one person can be alarming to another.
"For instance, an asthmatic landlord who doesn't want pets in a property they may choose to one day inhabit could struggle with this law. Likewise, an installation in the house may be deemed suitable to the tenant but could cause irreparable damage for the landlord," she said.
Bakos also criticised the proposed abolishment of the 120-day no-reason notice to vacate in Victoria.
"While we recognise that tenants deserve a stable home and a fair deal, we do question the appropriateness of an agreement that leaves one party in a position where they are bound while the other party has more discretion," she said.
While some of the proposed changes were aimed at boosting security and protection for tenants and property managers, Bakos said there is a need for clarity to prevent the surge in tenancy disputes.
"The danger is that the rules are too subjective, leaving uncertainty for tenants and landlords when the only clear parameters need to be determined by an independent third party in a tribunal hearing," she said.
"Reckless" reforms
Real Estate Institute of Queensland (REIQ) said the proposed changes in the state could potentially open a can of worms, discouraging investors from the local market.
Rental law changes in Queensland include the abolishment of a landlord's right not to renew a tenancy agreement at the end of the deal's term.
"If enacted, the law change would erode fundamental landlord rights and deter property investment across the state. The reforms' ripple effect would see renters struggling to find suitable housing under already tight conditions," REIQ communications manager Nicole Madigan said in a previous Your Investment Property report.
Propertyology head of research Simon Pressley had the same sentiment, saying the reforms could trigger a mass exodus of investors.
"With many existing owners of Queensland investment properties already disappointed by the poor financial performance of their assets, this new legislation will be the final straw for some landlords," he said.
Pressley said this could result in a dwelling-supply decline, which, in turn, would cause prices to rise.
"When one state imposes conditions that create a more difficult environment for investors to operate in, it's an easy decision for them to eliminate that state from their selection criteria," he said.
While experts and market watchers in Victoria welcomed the reforms in the Victoria, they said more needs to be done to ensure vulnerable tenants have easy access to their homes and are not charged excessive power bills.
"There are some clear opportunities to strengthen these regulations further to deliver greater safety, stability and privacy," said Tenants Victoria chief executive Jennifer Beveridge in a Domain report.
