The ACT has become the first Australian jurisdiction to remove all forms of tenancy termination without a legitimate cause in a raft of changes that also bans encouraging rental bidding.
The historic ban on 'no-cause' evictions will come into effect tomorrow — April 1 — and means landlords cannot terminate a renters' lease unless they provide a legitimate reason.
The changes to the Residential Tenancies Act 1997 will also prevent landlords or real estate agents from asking prospective tenants to offer more in rent than what is advertised.
The changes also introduce a minimum standard for ceiling insulation and make it easier to grow food and use a composting system in rental properties.
What are considered 'legitimate reasons' to be evicted?
The banning of 'no-cause' evictions is intended to strengthen renters' rights and security in Canberra.
Under the previous legislation, a landlord could issue their tenant a notice to vacate (NTV) for no reason with at least 26 weeks' notice of the lease termination date.
If it was a fixed-term lease, that date had to be after the end of the fixed term.
But, from tomorrow, new grounds to terminate a tenancy will be introduced.
Legitimate reasons for terminating a lease under the new laws include if the landlord intends to move into the property or have a close friend or family member move in or if the landlord requires the property for a non-residential purpose like starting a business.
Tenancy agreements can also be terminated if the landlord intends to sell the property, or if the tenant has engaged in threatening, harassing, intimidating or abusive conduct toward the landlord.
Tenants are still able to challenge an eviction through the ACT Civil and Administrative Tribunal (ACAT), if they believe the termination of their tenancy is not appropriate.
Rental bidding must be voluntary
The other major change to the tenancies act is the banning of landlords and agents from encouraging or asking for rental bidding.
Rental bidding occurs when a prospective tenant offers more money in rent than the property's listed asking price.
Under the previous laws, a real estate agent at an open house could, for example, tell people in attendance that offering more would give them a better chance of obtaining a lease, or even outright ask applicants to offer more.
As of tomorrow, it will be a strict liability offence for landlords and agents to solicit rent bids, punishable by up to $800 for individuals or $4,050 for corporations.
Rental properties will also be required to be advertised at a fixed rental rate, meaning one cannot be advertised without a specific price or with a rental range, like a listing of $550-$600 per week.
The changes still allow for some flexibility when it comes to the listed price on a rental property, with landlords still being allowed to offer multiple different rent prices depending on specific inclusions at the property.
For example, a property can still be listed as costing $500 a week unfurnished or $600 a week with furniture.
The ban on soliciting rental bids however does not stop prospective renters from making them, but they must be offered entirely voluntarily.
Fruits, vegetables, flowers and compost
The reforms also strengthen tenants' rights to grow food and to compost food waste.
From tomorrow, renters will be able to plant fruits, vegetables, flowers, herbs, and shrubs that don't grow more than 2 metres in height if the existing garden vegetation does not need to be removed to do so.
The changes also allow for a removable compost bin to be placed at the property, with both compost bins and new plants now classed as minor modifications to the property.
The new rules are similar to those for pets in ACT rental properties; tenants must seek agreement from their landlords before growing food or putting in a removable compost bin, but a landlord cannot refuse a request without providing a good reason.
If a landlord wants to reject a request, they will have to apply for permission to refuse the changes through ACAT.
As with most other approved modifications to a rental property, new plants or compost bins will have to be removed from the property prior to the end of the lease unless the landlord has agreed for the changes to be permanent.
If a tenant fails to remove them before leaving the property after the end of their lease, landlords will still have the right to make a claim against the tenant's bond.
Minimum standards for ceiling insulation
From tomorrow, all residential rental properties in the ACT will also be required to meet a new minimum energy efficiency standard for ceiling insulation.
Landlords will have to notify prospective tenants about whether a property meets the minimum standards, or if it is exempt.
If a property does not meet the minimum housing standard, tenants will be allowed to seek a rent reduction, compensation, or end their tenancy.
The law will also now give landlords the right to access a rental property if they need to upgrade it to meet a minimum standard.
It is estimated that over 60 per cent of the ACT's rental properties are already compliant with the standard, meaning they will not require any upgrades.
Like the other changes to the tenancy act, this new standard commences from tomorrow, but unlike the other changes, it will have a phase-in period extending to November 30, 2026.
Until then, landlords will have nine months from when a new lease is signed for their property to comply with the standard – unless they have an exemption.
This is to allow landlords adequate time to make the required changes in their properties, and to stagger upgrades to avoid spiking demand for insulation and insulation installers around Canberra.
Eligible property owners can access interest-free loans of up to $15,000 to help bring homes up to standard.
Rental properties that have an existing lease that does not get renewed before November 30, 2026, must still be up to the new minimum standard by that date.
By December 2026, all properties entering the rental market will have three months to comply with the standard unless they have an exemption.
