Chapter 4Strengthening the rights of renters
2.1The committee’s interim report exposed the weaknesses of the current rental system in relation to protections for renters’ rights as well as barriers to enforcement. Accordingly, the committee was encouraged by National Cabinet’s commitment to ‘A Better Deal for Renters’ to guide states’ and territories’ action on renters’ rights and improve consistency in rental policy and regulation across different jurisdictions. The committee also recommended in its interim report that the Australian Government take a coordinating role to implement stronger rental rights.
2.2This chapter discusses key issues—relating to rent bidding, rental applications, break lease fees, and no-grounds evictions—that arise at different stages of the rental life cycle and how harmonisation and additional regulations across jurisdictions could better protect all renters.
A Better Deal for Renters
2.3On 16 August 2023, National Cabinet agreed to ‘A Better Deal for Renters’ with a view to ‘harmonise and strengthen renters’ rights across Australia’. This secured high-level agreement from states and territories to a number of measures, including bans on soliciting rent bidding; simplification and standardisation of rental applications; minimum quality standards for rental properties; limits on the frequency of rent increases; limits on break lease fees; and requirements for reasonable grounds for eviction. The full, nine-point agreement is set out at Appendix 2.
2.4Throughout the inquiry, participants expressed broad support for ‘A Better Deal for Renters’. For example, Ms Farah Farouque, Director of Community Engagement at Tenants Victoria, stated:
We certainly welcome that, through the National Cabinet process, there is a national framework to better harmonise rental rights across a patchwork of systems. … this will shift … the baseline in many jurisdictions.
2.5NT Shelter submitted that it is ‘strongly supportive’ of ‘A Better Deal for Renters’, claiming that the measures strike the right balance between the interests of landlords, real estate agents and renters:
The issues are not unreasonable or onerous on landlords and agents but will make a significant difference in reducing unnecessary stress and anxiety on the part of tenants.
2.6On the other hand, the committee also heard concerns that ‘A Better Deal for Renters’ does not go far enough to protect the rights of renters. The Australian Council of Social Service (ACOSS), for instance, submitted that:
The recent National Cabinet agreement to A Better Deal for Renters takes some steps in the right direction, but much more needs to be done to give tenants greater security and better quality, more efficient, affordable and accessible housing.
2.7The following sections of this chapter explore in greater detail the issues addressed by ‘A Better Deal for Renters’ that arise at different stages of the rental life cycle.
Rent bidding
2.8Rent bidding occurs when an applicant for a rental property offers an amount of rent above the advertised asking price in order to secure the property. As noted in the interim report, rent bidding has proliferated during the rental crisis, exacerbating the unaffordability of the rental market.
2.9NT Shelter outlined several examples of practices by landlords and real estate agents that could encourage rent bidding:
listing a property at an unrealistically low price, and asking applicants to offer more money
listing a property with a misleading rent range, where the landlord would not rent the property at the lower end of the range
listing a property without a price, and giving applicants unrealistic estimates of what the landlord might accept
telling a prospective tenant that another applicant had offered a higher rent when this is untrue.
2.10Under ‘A Better Deal for Renters’, National Cabinet agreed to ‘implement a ban on soliciting rent bidding’, meaning that landlords and real estate agents would not be allowed to ask or encourage prospective tenants to offer rent above the advertised asking price.
2.11At the time of the agreement, soliciting rent bidding was already prohibited in every state and territory jurisdiction except South Australia, Western Australia and the Northern Territory (NT). Furthermore, South Australia had already passed legislation to prohibit the solicitation of rent bidding but it had yet to come into effect, and the Western Australian Government had already announced in early 2023 its intention to implement a ban. These bans are largely similar in form across different jurisdictions—the legislation generally requires rent for residential premises to be advertised at a fixed price, and makes it an offence for a landlord or their agent to solicit an amount of rent that is higher than the advertised amount.
2.12Despite these measures, the committee heard that rent bidding still occurs on a large scale. Ms Antonia Mercorella, Chief Executive Officer (CEO) of the Real Estate Institute of Queensland (REIQ), for example, gave evidence that:
The way that our laws work in Queensland and in a number of other jurisdictions is that, when one puts in an ad for a rental property, it must be advertised at a set price. When it's advertised and people come to look at it, you can't solicit by saying, 'You'll have to pay more,' and you can't seek that they pay more. … because it has been so competitive, we have seen people offering over and above the rental asking price. It hasn't been solicited, but they have offered it.
2.13Numerous submitters suggested that renters feel they have no choice but to participate in rent bidding to secure a lease in the current climate of low rental vacancy rates. For instance, Martina testified at a public hearing in Brisbane:
… we made more than 30 applications and we did not get any answer. The only thing that we could hear from the real estate was, 'You have a good rental history, but there are people who are willing to pay more.' … They are desperate for a place to live, and they are desperate for a place to call home.
Practices that indirectly invite rent bidding
2.14Several inquiry participants suggested that state and territory regulations should be strengthened to prevent landlords and agents from indirectly inviting rent bidding.
2.15Residential tenancy laws in most Australian jurisdictions go some way towards addressing the issue, by prohibiting rental properties from being advertised for a price range or without a price. However, the committee heard concerns that rental application technology (otherwise known as ‘RentTech’) is insufficiently regulated and currently facilitates rent bidding.
2.16Digital Rights Watch (DRW) pointed out that:
… online application forms with an editable “rental amount” field circumvent prohibitions on soliciting rental bids by the nature of their design.
2.17One renter explained that they felt pressured to engage in rent bidding because of the editable ‘rental amount’ field used by RentTech platforms:
Both tApp and 2Apply will invite you to specify how much rent you are willing to pay. This is essentially a blind auction, as you have no visibility into the bids which have been lodged by others and so you’re almost guaranteed to overpay if you decide to bid and you’re desperate. … these forms allow people to specify whatever price they will pay, which is essentially an invitation to bid.
2.18Additionally, submitters indicated that some RentTech platforms rate prospective renters’ applications more highly if they offer more rent. A 2022 investigation by the Guardian and Linda Przhedetsky, a PhD candidate at the University of Technology Sydney’s Faculty of Law, revealed:
Applying to rent at the advertised price of $490 a week for a two-bedroom townhouse in the Melbourne suburb of Brunswick resulted in a Snug Match Score of 74. But offering an extra $10 a week pushed the score up to 77. Each additional $10 a week offered increased the score by two or three points. It reached a score of 88 when the offer hit $540 a week.
2.19Ms Przhedetsky underlined that this occurred in a jurisdiction that had banned the solicitation of rent bidding, but it was unclear whether the laws applied to automated RentTech processes. As such, she submitted that:
… unless clear regulations are developed to prevent the misuse of [automated decision-making] ADM tools in the rental market, these tools may be used to disadvantage renters.
2.20Likewise, Ms Samantha Floreani, Program Lead at DRW, urged for the regulation of rent bidding to extend to RentTech platforms.
Accepting voluntary rent bids
2.21Inquiry participants highlighted that a significant limitation of regulation banning the solicitation of rent bidding is that landlords and agents can still accept bids offered voluntarily.
2.22A number of submitters recommended that landlords and agents should be prohibited from accepting offers of rent that are higher than the advertised price, and there should be a legislative requirement for the advertised price to match the actual price agreed in the lease.
2.23As one renter explained:
The market should come in to play when a property is empty to determine price based on a supply & demand, but the advertised price should be locked in. Whilst an agency or landlord should be able to advertise whatever price they would like, that advertised price should be the final amount locked into the agreement.
2.24NT Shelter submitted that this should be subject to the ability for landlords to accept offers of rent below the advertised price.
2.25The Renters and Housing Union (RAHU) argued that this would ‘help prevent informal rent bidding, improve rent transparency, and discourage evictions driven by an intent to increase rent’.
2.26Since the announcement of ‘A Better Deal for Renters’, the Victorian Government expressed its intention to ban all rent bidding, including ‘mak[ing] it an offence to accept bids, and introduc[ing] tougher penalties for agents and landlords who break the law’. This was welcomed by Tenants Victoria, who stressed that vulnerable renters should not be penalised for making rent bids.
2.27On the other hand, Dr Hazel Blunden, a former renter turned property owner, suggested that the solution to rent bidding may not lie in banning the practice, but rather, in boosting the supply of social and affordable housing to obviate the need for renters to bid against each other:
While there are people who have the capacity to pay for rental [sic], they compete against many others and outbid them to have an application accepted. Unsurprisingly, real estate property managers and landlords will choose the potential tenants who will pay the most and present the least perceived risk. Private landlords are not social housing providers or charities, and to expect them to behave as such is unrealistic. New builds of social and affordable housing managed by Housing NSW and community housing organisations is essential.
The difficulty of enforcing rent bidding regulations
2.28The committee heard of the challenges of enforcing regulations relating to rent bidding due to the lack of available information on actual rents paid. Some submitters proposed measures to boost transparency, for example:
… bidding wars might be easier to expose if all rentals listed on the internet are required to be listed as 'rented' with the actual per week rental listed. This is similar to houses for sale which are listed in the 'sold' category with their final price.
2.29Mr Christopher Carr of WEstjustice advocated for adequate funding of government agencies responsible for overseeing residential tenancies and ensuring compliance, as well as the prosecution of real estate agents who breach rent bidding regulations.
2.30The enforcement of rental regulations will be discussed further in Chapter 5.
Rental applications
2.31The committee’s interim report outlined a range of issues raised by inquiry participants in relation to the rental application process. Chief among these were the burdensome and invasive requests for applicants’ personal information, and the security of that information.
2.32Under ‘A Better Deal for Renters’, National Cabinet agreed to:
Make rental applications easier and protect renters’ personal information:
(i)Prescribe a rental application form in each jurisdiction, with required documents limited to two in each of the following categories: identity, financial ability to pay rent, suitability;
(ii)Require the destruction of renters’ personal information three years after a tenancy ends and three months after tenancy begins for an unsuccessful applicant;
(iii)Require tenants’ personal information to be provided and corrected within 30 days of a request by a tenant or prospective tenant; and
(iv)Specify information not allowed to be collected from a tenant or more generally (e.g. disputes with landlords).
2.33The following sections discuss stakeholders’ views on regulating rental applications and safeguarding applicants’ personal information, in the context of ‘A Better Deal for Renters’.
Limitations on documents and information collected
2.34As described in the interim report, the committee heard that prospective renters are often forced to provide ‘excessive and unreasonable’ amounts of personal information when applying for rental properties. The National Association of Renters’ Organisations (NARO) stressed that:
Applicants for rental properties are required to provide a vast amount of personal information, much of which is not necessary for determining if they can afford and look after a property and abide by tenancy obligations. A recent survey by Tenants’ Union NSW documented that this included passports, proof of marital status, visa status, car registration, social media accounts, medical records, bank statements and employment contracts.
2.35Inquiry participants gave examples of applicants being asked for information about their lifestyle and personal relationships, and even whether they have ‘prominent tattoos’.
2.36Samira, a federal public servant renting in Canberra, compared the invasiveness of the rental application process to the process of obtaining a government security clearance:
It's currently potentially less invasive to obtain a negative vetting level 1 security clearance than it is to pass a background check to be approved to rent a house in Australia. Certainly, getting a baseline clearance is a similar process. Let me point that out in context: it is easier for a citizen or a resident of this country to obtain access to national security information than is for them to rent a property.
2.37Submitters emphasised that the collection of information irrelevant to a person’s rental application increases the risk of tenant selection decisions being influenced by prejudice.
2.38‘A Better Deal for Renters’ seeks to address this issue by committing states and territories to ‘specify information not allowed to be collected from a tenant or more generally’.
2.39At the time ‘A Better Deal for Renters’ was agreed to, Victoria was the only Australian jurisdiction that placed legal restrictions on the information that can be requested of applicants to residential rental agreements. South Australia had passed similar legislation but it had yet to come into effect.
2.40In Victoria, landlords and agents are prohibited from requesting that applicants disclose certain categories of information specified in the regulations, namely:
their history of any disputes with residential rental providers;
their rental bond history;
bank statements containing daily transactions; and
information about them that relates to an attribute protected under equal opportunity legislation (such as age, gender identity, disability, race, sex, and sexual orientation) unless a reason for the request is provided in writing.
2.41Several inquiry participants suggested that other Australian jurisdictions should mirror Victoria’s provisions and ensure that the protections apply to ‘all data collection methods, including social media and online tracking’.
2.42Ms Linda Przhedetsky, PhD candidate at the University of Technology Sydney’s Faculty of Law, noted, however, that a shortcoming of the Victorian approach is that it ‘may prove inflexible if new types of information (not considered at the time that the regulation is developed) become available’. She suggested this issue could be avoided by using a prescribed rental application form.
Prescribed rental application form
2.43‘A Better Deal for Renters’ committed states and territories to:
Prescribe a rental application form … with required documents limited to two in each of the following categories: identity, financial ability to pay rent, suitability.
2.44The committee heard widespread support for a prescribed rental application form to standardise the information that can be requested of applicants. For example, Mr Joel Dignam, Executive Director at Better Renting, testified:
When we had that announcement from the National Cabinet, we consulted with Better Renting supporters and asked them to fill out a quick survey … the seventh item on that list, around tenancy applications—improving privacy and moving towards prescribed application forms—was very positively received. … they thought, 'This is great. I've been forced to hand over so much information when I apply; it's a massive time-sink; it's degrading.' And this, actually, while it might seem small, will make a very big difference to renters.
2.45Inquiry participants outlined a range of benefits to introducing a prescribed rental application form, including:
protecting applicants’ privacy;
minimising the time and stress involved in applying for a rental property; and
mitigating the risks associated with the over-collection of applicants’ personal information, including the risk of tenant selection decisions being influenced by irrelevant or discriminatory considerations.
2.46The categories of documents listed in ‘A Better Deal for Renters’—identity, financial ability to pay rent, and suitability—are consistent with the New South Wales (NSW) Fair Trading Commissioner’s recommendation that landlords and agents should only request information that is reasonably necessary to:
verify the applicant’s identity;
show that they can pay the rent under the agreement when it falls due; and
show that they are likely to look after the property.
2.47Mr Hayden Groves, President of the Real Estate Institute of Australia (REIA), agreed with these limited categories, saying at a hearing:
… some real estate agents are requesting social media profiles and whatnot from prospective tenants. The REIA cautions practitioners against those sorts of things. We really just need to make sure that the applicant for the property is who they say they are and can meet their obligations under the lease, and that would be sufficient.
Design considerations for a prescribed application form
2.48Snug, a RentTech platform, suggested that real estate agents should not need to hold identification documents in their full form, but rather, should be able to verify an applicant’s identity by sighting the documents and making a record of the date and time of sighting and the last few digits of the identification number.
2.49The committee heard that prescribed rental application forms should be carefully designed to consider the needs of disadvantaged and vulnerable cohorts (such as refugees, people experiencing homelessness, and victim-survivors of domestic or family violence) who may have difficulties providing certain documents.
2.50Ms Linda Przhedetsky suggested that when designing prescribed rental application forms, state and territory governments should consult with ‘relevant organisations that support people experiencing vulnerability to ensure that their clients would be in a position to provide the specified documents’.
2.51Submitters mentioned that a degree of personalisation is important in the application process to account for individual renters’ unique circumstances. For instance, one renter proposed the inclusion of ‘a field … that allow tenants to introduce themselves and explain some of their “out of the box” circumstances’.
Protections for applicants’ personal information
2.52The interim report highlighted the data security risks associated with the collection, use, storage and destruction of rental applicants’ personal information.
2.53Per Capita stressed that ‘the improper use of technology to harvest, retain and sell rental applicant data must be considered a pressing issue for investigation by governments’. The Forcibly Displaced People Network gave evidence that:
Some community members noted that they feared the amount of data real estate agencies collect on applicants. Providing a large amount of identifiable data poses risks to people who are transgender or fear persecution from their families if the data is hacked.
2.54Under ‘A Better Deal for Renters’, states and territories agreed to:
… require the destruction of renters’ personal information three years after a tenancy ends and three months after tenancy begins for an unsuccessful applicant; [and]
require tenants’ personal information to be provided and corrected within 30 days of a request by a tenant or prospective tenant …
2.55At the time of the agreement, provisions of the Privacy Act 1988 (‘the Privacy Act’) provided some protections for rental applicants’ personal information, however DRW told the committee that ‘Australia’s privacy laws are outdated and not fit for purpose’. Victoria was the only state that supplemented the Privacy Act with some protections in residential tenancies legislation. South Australia had passed legislation on this issue but it had yet to come into effect.
The Privacy Act
2.56The Privacy Act requires organisations with an annual turnover of over $3 million to adhere to 13 Australian Privacy Principles which cover:
the collection, use and disclosure of personal information;
an organisation’s governance and accountability;
integrity and correction of personal information; and
the rights of individuals to access their personal information.
2.57Inquiry participants drew the committee’s attention to the fact that a substantial proportion of landlords and real estate agents are not regulated by the Privacy Act. Mr Thomas Chailloux, Policy Officer at the Public Interest Advocacy Centre (PIAC), stated that:
The Australian Privacy Act currently covers only about half of real estate agencies because it is based on the turnover of agencies. So it doesn't cover the smaller agencies, and it doesn't cover landlords.
2.58According to Ms Samantha Floreani of DRW, the REIA estimates that ‘up to two-thirds of real estate agents [are] currently not subject to the Privacy Act’.
2.59Inquiry participants called for the Privacy Act to be amended to apply to the ‘property management and RentTech sector as a whole’, irrespective of turnover. Mr Thomas Chailloux argued that expanding the Privacy Act’s application to cover all real estate agencies would be justified because of the sensitive nature of the information that they collect.
2.60Several reform options were raised by inquiry participants, including:
creating a specific provision in the Privacy Act to ensure that it applies to all real estate agencies and RentTech businesses;
lowering the Privacy Act’s threshold of annual turnover for small businesses; or
removing the small-business exemption from the Privacy Act.
2.61In September 2023, the Australian Government released its response to the Privacy Act Review Report and acknowledged that ‘the community expects that if they provide their personal information to a small business it will be kept safe and not used in harmful ways’. The Australian Government agreed in-principle that the ‘small business exemption should be removed in light of the privacy risks applicable in the digital environment’.
2.62On the other hand, the RentTech platform, Snug, argued that the Privacy Act already provides ‘robust and sufficient protections for consumers’. Snug proposed that ‘industry guidelines and training’ would be sufficient to address stakeholder concerns regarding data security and privacy.
State and territory privacy regulations
2.63Aside from the Privacy Act, few regulations exist at the state and territory level to protect rental applicants’ personal information. At the time of writing, only Victoria and South Australia have such regulations, though NSW has non-binding guidance and is currently reviewing its legislation.
2.64The Australian Housing and Urban Research Institute (AHURI) summarised that:
Current tenancy regulations offer minimal protection for tenant [sic] and those applying for rental property in terms of retention of data. … the security with which this information is stored, and the length of time it is stored are currently not well regulated.
2.65In Victoria, landlords and agents can only use personal information provided through a rental application form to assess the person’s suitability as a renter or to meet a requirement under the residential tenancies legislation.
2.66South Australia’s residential tenancies legislation was recently amended to regulate personal information provided for the purposes of a rental application. Any person who holds such information must:
‘take such steps as are reasonable in the circumstances’ to protect the information from ‘misuse, interference or loss’ and ‘unauthorised access, modification or disclosure’;
not disclose such information except in particular circumstances, such as having the consent of the person to whom the information relates; and
‘take such steps as are reasonable in the circumstances’ to destroy the information within a particular time frame.
2.67Ms Linda Przhedetsky recommended that other Australian jurisdictions consider introducing regulations similar to those in Victoria and South Australia.
2.68Submitters noted that important areas of reform include data security measures, the duration of data retention, and renters’ right to access and correct their personal information.
Private RentTech platforms
2.69As mentioned in the interim report, private RentTech platforms are increasingly being used at the rental application stage, and raise a number of issues in relation to applicants’ personal information. According to DRW, RentTech is not currently captured by any residential tenancies legislation in Australia.
2.70Prospective renters are often concerned about the privacy risks associated with using RentTech. For instance, a renter expressed her fear that the information she uploaded to RentTech platforms may not be secure:
… all real estate agents of houses we applied for used third party software for the applications, which means we all have so much incredibly personal and valuable data sitting with so many different companies. Our personal information is vulnerable to hacking or even being sold on to interested parties, because we weren't about to read all the terms and conditions, because we just needed a place to live. … We're just waiting to hear about one of those companies being hacked and all our data on the dark web.
2.71Additionally, Ms Linda Przhedetsky argued that many people are unable to provide meaningful, informed consent to the privacy policies of RentTech platforms because people lack the time and legal literacy required to properly comprehend these policies.
2.72Concerns were also raised regarding the use of opaque algorithms to process applicants’ personal information, ‘making it difficult … to know if, when and how information is being used illegally or unfairly’. DRW noted that:
… machine learning, automated decision-making systems and other forms of data processing and analytics … increased pre-existing issues of bias and potential unlawful discrimination [and] end up harming marginalised communities the most, which we also know are more likely to be renters.
2.73Accordingly, various inquiry participants called for stronger regulation of RentTech. The committee heard that:
Specific regulations will improve access to justice for people who rent. It will allow people to take RentTech platforms to their state or territory’s legal and tribunal system for breach of the law.
2.74Ms Linda Przhedetsky suggested that Australian RentTech regulations could be informed by the work of the United States Federal Trade Commission and the Consumer Financial Protection Bureau that have recently undertaken public consultation on issues arising from the use of automated decision-making technology to screen rental applications.
2.75DRW proposed that regulations could require: risk and compliance assessments of RentTech platforms; a mandatory code of conduct for handling renters’ data; and proactive disclosure of the data used to train algorithmic models.
2.76Conversely, the RentTech platform, Snug, suggested that ‘healthy competitive markets drive consumer welfare’, and therefore opposed the introduction of RentTech regulations. Snug argued that ‘non-regulatory methods should be the first measure to expand markets and promote innovation’.
Alternatives to private RentTech platforms
2.77DRW suggested that usage of RentTech for rental applications should be ‘opt-in, rather than opt-out’, explaining:
Real estate agents should be required to communicate clearly with renters that signing up to any such app is optional, that there is no downside or risk of penalty for choosing not to use it, outline the risks related to using a third party platform, and provide an explanation of alternatives should the renter decide not to sign up.
2.78Several inquiry participants underlined the need for rental applicants to have the option of a paper-based application for accessibility purposes. People with limited digital literacy, older renters, and people in remote areas who have difficulties accessing the internet were identified as cohorts who would benefit from a paper-based application.
2.79The committee also heard there is potential for state and territory governments to play a larger role in managing rental applicants’ personal information, with one renter suggesting, ‘perhaps there could be a government website that we could use instead of these suspicious third-party companies’. Ms Samantha Floreani, Program Lead at DRW, stated at a public hearing:
I think that there's a growing appetite for government to intervene when it comes to things like digital identity so that each individual business that you interact with doesn't need to collect your identity documents or store them.
2.80Ms Floreani cautioned that ‘creating a centralised [government-run] pool of highly sensitive data … could … be a target for … malicious attacks’ and there would need to be strong safeguards in place, but the concept was ‘worth investigating further’.
2.81The submission by DRW stated that a rental application platform managed by state rental regulators:
… would ensure consistent and fair application of regulations, … create a new revenue stream for regulators … [and] generate a powerful public dataset for understanding the state of the sector.
Tenants blacklists
2.82As mentioned in the interim report, landlords and real estate agents can blacklist renters in databases that are accessible to other rental providers. Being listed in these databases can seriously damage renters’ ability to secure future rental housing. Private renters Jennifer and Mark spoke of their firsthand experience of being blacklisted:
Our names have been listed on a national real estate agency internal database blacklist called the TICA virtual manager. This blacklisting will ensure we will never be able to secure private rental ever in any Australian state or territory.[127]
2.83Under state and territory legislation, these blacklists are referred to as ‘residential tenancy databases’ that are:
… for use by landlords or agents of landlords for checking a person’s tenancy history to decide whether a residential tenancy agreement should be entered into with the person.
2.84These databases contain renters’ personal information such as their ‘defaults or alleged defaults on any tenancy agreements, including damage or failure to pay rent’. Legislative provisions exist in every Australian state and territory to regulate the listing of renters’ personal information in these databases.
2.85Though the provisions vary slightly across different jurisdictions, they generally require landlords and agents to:
notify rental applicants of any residential tenancy databases that the landlord/agent usually uses to decide whether to rent to a person;
notify rental applicants if personal information about them is in a residential tenancy database that the landlord/agent has used to decide whether to rent to them;
only enter information in a residential tenancy database that relates to particular breaches by particular people;
give a person a copy of the information in a residential tenancy database that relates to them, if requested; and
notify a database operator in writing if the landlord/agent becomes aware that information they have listed is ‘inaccurate, incomplete, ambiguous or out of date’.
2.86The City Futures Research Centre (CFRC) remarked that:
… these rules are the result of an unusually co-ordinated reform effort in the 2000s, and are fairly strong. … However, there are gaps in current regulatory frameworks.
2.87Despite the regulations, evidence to the committee demonstrated that renters are not sufficiently informed about how these databases are used, what information they hold, and how to access that information. For example, one renter had heard of a ‘secret database … where [real estate agents] can write reviews on you’ but was not aware of any rights that renters have in relation to this information.
2.88Several inquiry participants pointed out that many internal and informal blacklists remain unregulated. Shelter SA called for blacklists to be:
… more heavily regulated and policed, especially when owners/agents operate private groups on social media platforms that are difficult to monitor, to prevent negative sharing of tenant details that may impact on future tenancies …
2.89Some inquiry participants highlighted that there is no equivalent database to enable renters to make an informed decision about who to rent from, and called for the ‘informational imbalance between renters and landlords’ to be rectified. To support mutual transparency in landlord-tenant relationships, DRW suggested:
… exploring a database for landlords who have or have not maintained their properties to an agreed standard – a star rating of sorts, enabling tenants to make choices as to who they may wish to rent from.
2.90The proposal for a landlord database will be discussed further in Chapter 5 along with other measures to enforce renters’ rights.
Break lease fees
2.91The committee heard that break lease fees exacerbate the financial strain on tenants and ‘act as an additional barrier for tenants to find appropriate and suitable housing to meet their needs’.
2.92Some submissions claimed that break lease fees create difficulties for renters who may need to leave a tenancy due to changes in personal circumstances. Better Renting highlighted the inherent ‘volatility and unpredictability in many people’s lives’, and the need for greater flexibility and freedom for renters:
People lose their jobs, relationships change, families move. Or, sometimes your landlord is a jerk and you’d rather move somewhere else. In these situations, it would be harmful for people to be trapped in a long fixed-term and face potential penalties for ‘breaking lease’. Rather, we want tenants to be in control of their tenancy. If people want to keep staying in their home, they should have that option. If they want to move out, they should have that option.
2.93Ms Isabelle Butler, Senior Lawyer at the University of Melbourne Student Union (UMSU) Legal Service, observed that university students often have to end their fixed term leases early because they may be ‘given a lease term that does not accord with their university year’.
2.94The CFRC pointed out that since renters often do not have access to certain information about the rental property and the landlord before signing the lease, they may discover during the lease that the property is not suitable for them:
When they commence a tenancy, renters typically know very little about the dwelling (just what they’ve seen on a 15-minute inspection with multiple other prospective tenants), and nothing about the landlord. … It is appropriate that renters should want to keep their options open …
2.95Peter, a private renter, complained of the unfairness of the current system which penalises renters, but not landlords, for breaking a lease early:
If I signed a lease coming in a month's time and the landlord, in three or four months time, decided that he or she would like to put someone else in the property, there's no penalty for the landlord in that situation. However, if my situation changes and I decided that I would like to break this tenancy agreement, my penalty is $3,600 as a sorry fee for inconveniencing you. I find that disparity disempowering …
2.96Under ‘A Better Deal for Renters’, National Cabinet agreed to:
Limit break lease fees for fixed term agreements to a maximum prescribed amount which declines according to how much of the lease has expired (e.g. a maximum of four weeks’ rent if less than 25 per cent of the fixed term has expired).
2.97At the time of the agreement, only NSW and the ACT restricted the amount of break lease fees a renter can be charged.
2.98NSW has a ‘tiered system’ whereby the amount of break lease fees that a tenant must pay is proportionate to how much of the lease has expired. Under the NSW legislation, the maximum break lease fee for a fixed term agreement of less than three years is four weeks of rent (where less than one quarter of the fixed term has expired), reducing to one week’s rent (where three quarters or more of the fixed term has expired).
2.99In the ACT, if under half of the fixed term has expired the renter will be liable to pay six weeks of rent, whereas if half or more of the fixed term has expired the renter will be liable to pay four weeks of rent.
2.100Ms Isabelle Butler of the UMSU Legal Service testified that a tiered system for calculating break lease fees would provide ‘a lot of clarity to both renters and landlords to avoid … disputes’ and supported the implementation of such a system across Australia.
No-grounds evictions
2.101Mr Leo Patterson Ross, CEO of the Tenants’ Union of NSW, observed that ‘no-grounds evictions have more than doubled since the beginning of COVID’.
2.102In Make Renting Fair WA’s June 2022 survey of nearly 400 renters, 32 per cent reported experiencing a no-grounds eviction in the past year.
2.103The committee heard that the availability of no-grounds evictions ‘unjustly places renters in a deeply precarious position, establishing a systemic power imbalance between tenant and landlord’.
2.104Under ‘A Better Deal for Renters’, National Cabinet agreed to:
Develop a nationally consistent policy to implement a requirement for genuine reasonable grounds for eviction, having consideration to the current actions of some jurisdiction[s]
2.105At the time of the agreement, there were significant differences in state and territory approaches to no-grounds evictions. Western Australia explicitly allows no-grounds evictions, while South Australia and the NT allow no-grounds evictions for periodic tenancies. Other jurisdictions have placed restrictions on the use of no-grounds evictions.
2.106The ACT has entirely banned no-grounds evictions (noting that the NSW and South Australian governments have announced their intention to do so). In the ACT:
… landlords cannot lawfully end a tenancy unless there is a specific and legitimate reason for doing so. The RTA [Residential Tenancies Act 1997 (ACT)] now sets out all the grounds on which a tenancy can be ended and no other grounds for termination are permissible.
2.107Throughout the inquiry, participants conveyed widespread support for the removal of no-grounds evictions. Dr Chris Martin, Senior Research Fellow at the CFRC, emphasised the importance of this reform:
National Cabinet's announcement … of intended tenancy law reform … for only genuine, reasonable grounds for eviction … is a crucial reform. It's a reform on which every other reform—indeed, even the exercise of tenants' existing rights—depends …
2.108Better Renting echoed that ‘the most important change in all jurisdictions is to end no-cause terminations’. Make Renting Fair WA stated that ‘it was incredibly disappointing that the WA government retained no grounds evictions’.
2.109Inquiry participants highlighted that ‘Australian jurisdictions are outliers amongst OECD [Organisation for Economic Co-operation and Development] jurisdictions in allowing no grounds evictions’. Australian renters enjoy less security of tenure than most comparable countries. According to AHURI:
In comparison with comparable countries, policy and legal settings for the Australian private rental market result in volatility in rental investment and weak tenant rights which do not facilitate secure occupancy. International experience demonstrates that it is possible to have a large private rental sector with small scale investors and higher levels of secure occupancy for tenants (Hulse et al 2011).
2.110The committee heard that in Germany ‘landlords can’t cancel rental contracts without a legally valid reason’, while in France ‘landlords cannot evict tenants during winter, even for rent arrears’. In addition, the United Kingdom (UK) introduced legislation in 2023 to abolish no-grounds evictions.
2.111The CFRC’s 2022 AHURI research found that ‘tenants’ insecurity was identified by advocates as the biggest problem with residential tenancy law and rental housing generally’.
Impacts of insecure tenure
Risk of retaliatory evictions
2.112Many inquiry participants told the committee that renters are prevented from fully exercising their rights due to the risk of retaliatory evictions by landlords. For example, a Melbourne renter expressed her fear that she would be evicted for requesting that the landlord fix the broken blinds, heater, and garage roller door on the property:
We are quite concerned that we will be painted as ‘problem’ tenants for asking for these issues to be rectified. … They may even try to terminate our lease because they don’t want to fix any of the issues as it’s easier for them to get rid off [sic] us than to pay for the upkeep of the property. … Can you imagine being too scared to raise an issue about something broken or falling apart in your home, for fear that you will be kicked out for doing so? Unfortunately, every single renter in Australia knows this feeling, or knows someone who has been asked to move out of a rental for asking for repairs.
2.113Organisations that provide tenancy advocacy and advice services reiterated the prevalence of retaliatory evictions. For example, Advocacy and Rights Centre Justice and Housing Justice gave evidence that:
Clients calling our service have reported being penalised with Notices to Vacate for voicing complaints about unaddressed repairs and things like living with mould, while other clients are often unwilling to pursue further action due to fear of eviction, being [sic] of how difficult it would be to secure another rental property.
2.114As such, Ms Natalie Bradshaw of Legal Aid NSW argued that the removal of no-grounds evictions is a ‘keystone of a tenant being able to fearlessly assert their rights’. Mr Shane Rattenbury MLA, Attorney-General of the ACT, explained that:
Removing no-cause evictions … gives tenants greater confidence in saying, 'No; under the legislation I don't have to agree to that, and you can't simply kick me out.'
Impacts on renters’ wellbeing
2.115As discussed in the interim report, renters’ lack of tenure security has serious impacts on their overall wellbeing, including their mental, emotional and financial health. These all-encompassing impacts were described by a renter who said:
I live in a perpetual state of fear—that I will be evicted; that my rent will increase to the point of unaffordability—that only escalates each inspection and once my fixed-term contract is up. … I have been a victim of a no-cause eviction, on the basis that the landlord wanted to raise the rent above the CPI [Consumer Price Index] limit. I have used at least two weeks of leave to attend rental inspections, apply for rental properties, move my possessions and set up basic necessities (electricity, gas) in two years. I have spent countless hours (over 70 hours at this point) attending psychological therapy sessions to help me manage the stress, anxiety and depression that surrounds housing insecurity as a renter.
2.116Another renter similarly underscored that evictions carry great weight and impact every aspect of their life:
Unlike landlords with multiple properties, I lack a safety net, as my rented dwelling is my only place to live. Hence, eviction is not just a mere inconvenience; it's a life-shattering and life-altering event. Being evicted, especially through no fault of your own, is incredibly distressing. It uproots your entire life, disrupts stability, and leaves you feeling vulnerable and uncertain about the future.
2.117Indeed, the Black Dog Institute and Suicide Prevention Australia cited research showing that evictions heighten the risk of suicide for individuals.
2.118Further, being evicted in the current rental crisis can push renters into homelessness. For instance, Ms Fiona York, Executive Officer of the Housing for the Aged Action Group (HAAG), testified that older renters experiencing an eviction are ‘devastated when they realise … they’re facing sleeping in their car or on the couches of their friends and family’.
2.119Mr Simon Schrapel, Chief Executive of Uniting Communities, confirmed that over the last 12 to 18 months, he has witnessed ‘a new cohort of people’ facing homelessness, ‘whose rental situations have deteriorated to the extent that they are either at the end of their lease, being evicted or cannot find rental accommodation to move into’.
Limited grounds for eviction
2.120Numerous inquiry participants proposed that having limited and clearly articulated grounds for eviction would improve renters’ security of tenure. For example, one renter asserted that the legislation should not allow for ‘reasonable cause evictions’ because this would be too broad and leave room for interpretation, thereby placing a burden on renters to argue that an eviction was not ‘reasonable’. Likewise, the Western Australia Council of Social Service (WACOSS) stressed, ‘it is crucial that this list is exhaustive and not too broad in scope, in order to … provide adequate protections for renters’.
2.121Submitters drew the committee’s attention to overseas precedent. In Scotland, for instance, ‘landlords are unable to ask tenants to leave unless the ground for eviction falls under one of 18 specified exceptions’.
2.122Currently, though the legislative provisions vary across different states and territories, Australian landlords are generally able to terminate a lease for reasons such as the tenant’s failure to pay rent; the tenant’s breach of the residential tenancy agreement other than nonpayment of rent; the tenant’s use of the premises for an illegal purpose; sale of the premises requiring vacant possession; or the landlord or their family member requiring the premises for their own housing.
2.123Submitters suggested a range of potential grounds for eviction, many of which overlap with existing grounds for eviction in residential tenancies legislation:
the tenant’s failure to pay rent on an extended or systemic basis;
sale of the premises;
the landlord or their family member requiring the premises for their own housing;
the demolition or major renovation of the premises; or
changes to the use of the premises, for example using the property for a business.
2.124However, a number of submitters argued that the sale of a rental property should not, itself, be a ground for eviction. Dr Chris Martin of the CFRC noted that it should be possible for a renter to remain in premises that had been sold to another investor.
2.125A number of inquiry participants argued that the end of a fixed term lease should not be an accepted ground for eviction. Submitters noted that only the ACT has ‘comprehensively removed’ no-grounds evictions from its residential tenancies legislation because it is the only jurisdiction in which ‘lessors … cannot lawfully terminate a tenancy simply because a fixed term is ending’.
2.126Even in Victoria, Queensland and Tasmania—jurisdictions that purport to have removed no-grounds evictions—evictions are allowed at the end of a fixed term tenancy. Ms Aimee McVeigh, CEO of the Queensland Council of Social Service (QCOSS), stated, ‘to truly implement no-fault evictions in Queensland we need to remove the ability to issue a notice to leave at the end of the lease’.
Genuine grounds for eviction
2.127Inquiry participants supported the inclusion of a requirement for grounds for eviction to be genuine, such that landlords must provide evidence for the ground on which they seek to rely. Mr Leo Patterson Ross, representing NARO, stressed the need to ensure that landlords invoke ‘genuinely reasonable grounds’ that are ‘not being used to dodgy up and disguise what is effectively a no-grounds eviction or a retaliatory eviction’.
2.128Various submitters reported that grounds for eviction are frequently misused by landlords. Mr JR Hewitt of RAHU, for instance, told the committee that a primary reason for people joining the union was that:
… they were being evicted in a roundabout way—such as the landlord saying, 'We want to move into the house,' and then only two months later putting the house back on the rental market …
2.129Regional Alliance West, a not-for-profit community service organisation, submitted that no-grounds evictions facilitate a ‘“revolving door” of tenants with increasing rents’. Several submitters gave examples of landlords evicting renters without grounds in order to re-advertise the property for increased rent. Legal Aid ACT, for instance, testified that:
Before no-cause evictions were abolished we would see tenants who were evicted without cause whose property was then advertised for rent a few weeks later for a few hundred dollars more a week.
2.130ACT residential tenancies legislation already includes some provisions that require ‘written evidence supporting the lessor’s reason for the notice [to vacate’. The ACT Government’s submission explained that:
… where a lessor wishes to terminate a private tenancy agreement other than for breach, the lessor will be required to show evidence of their genuine reliance on a termination provision (for example, architects’ plans for a renovation, or a statutory declaration as to their intention to move into the property).
Implications for landlords
2.131Some submitters argued that the removal of no-grounds evictions would undermine the rights of landlords. There was concern that landlords would lose control over their asset, with the Property Owners’ Association of Queensland (POAQ) stating that:
… further interference by government on the ability of landlords to effectively manage their investment … only adds to the numerous disincentives for investment into rental housing and consequently lead to more landlords to either sell or re-purpose their rental property.
2.132A number of landlords and peak industry bodies were worried about the inability to evict renters who are in arrears or are not taking care of the premises. Mr Wesley Hockey, a landlord, said:
Evicting a tenant is truly a nightmare nowadays already. … I had a tenant recently that didn’t pay rent for 4 [four] and a bit months and I struggled to evict her.
2.133The Productivity Commission identified that tenancy law reforms ‘that reduce landlords’ ability (perceived or actual) to easily evict “problematic” tenants’ may have potential unintended consequences as they:
… may make landlords less willing to rent to tenants they view as higher risk—potentially increasing tenant screening and discrimination in the rental market (Ambrose and Diop 2021).
2.134Conversely, Dr Emma Power, Associate Professor in Urban Geography at Western Sydney University, argued that the removal of no-grounds evictions would strike an appropriate balance between the rights of landlords and tenants:
‘With cause’ requirements retain the right of landlords to provide tenants with a notice to vacate at the end of a fixed-term lease or when the property is required for a different purpose in the case of a periodic or ongoing lease. ‘With cause’ evictions better balance the need of tenants for greater housing security with the rights of landlords to repurpose properties when required.
2.135Several inquiry participants drew the committee’s attention to other jurisdictions where no-grounds evictions had been abolished and there had not been negative consequences:
… there are many countries who do have no-grounds evictions. We're going to be the last country in the OECD to do it. The only other hold-outs are the UK and parts of America. But all of Europe and most other countries that are comparable to ours just have not had this system, and so we can see that their rental system did not fall apart and, in fact, they are often much, much better places to rent.