Residential Tenancies (Miscellaneous) Amendment Bill

Introduction and First Reading

The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (15:49): Obtained leave and introduced a bill for an act to amend the Residential Tenancies Act 1995. Read a first time.

Second Reading

The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (15:50): I move:

That this bill be now read a second time.

I seek leave to have the second reading speech and explanation of clauses inserted in Hansard without my reading them.

Leave granted.

Mr Speaker, I am pleased to introduce the Residential Tenancies (Miscellaneous) Amendment Bill 2023 (the Bill).

The Bill proposes to amend the Residential Tenancies Act 1995 (the Act), the Residential Parks Act 2007 and the Real Property Act 1886 to improve the rights of renters, modernise existing rental laws and ensure landlords can continue to manage properties effectively.

The amendments proposed in the Bill form part of the government's commitment to improve housing outcomes for people in South Australia.

Earlier this year, the commencement of the Residential Tenancies (Protection of Prospective Tenants) Amendment Act 2023 and amendments to the Residential Tenancies Regulations 2010 provided some immediate relief for tenants, through taking measures to ban rent bidding, protect tenant information, and make residential rental bonds more affordable.

The Bill contains broader reforms that are necessary to respond to the many challenges faced by tenants in SA.

In September 2023, the Senate Community Affairs References Committee delivered its interim report into the worsening rental crisis in Australia. This report highlights that the challenges faced by tenants to find suitable, affordable, and safe housing are of unprecedented scale, with Australia experiencing a period of extremely low rental vacancy rates and rising rent levels. In August 2023, the residential rental vacancy rate in Adelaide was 0.5%, the second lowest rate of the Australian capital cities, behind Perth.

The Bill proposes amendments to SA's rental laws that are consistent with the agreement made by National Cabinet on 16 August 2023, to 'A Better Deal for Renters', which focuses on improving renters' rights across Australia. Reforms within the Bill also consider the outcome of extensive consultation on the review of the Act conducted by Consumer and Business Services (CBS).

Broad public consultation was undertaken between 15 November 2022 and 16 December 2022, when more than 5,000 people completed a YourSAy survey, and over 150 submissions were received from key stakeholders and members of the public. The outcome of this consultation informed the drafting of the Bill, which was released for targeted consultation between 14 August 2023 and 4 September 2023.

All stakeholder groups who made submissions during public consultation were invited to provide feedback on the Bill as part of targeted consultation. Submissions were received from 21 stakeholders including the Real Estate Institute of South Australia, Shelter SA, Uniting Communities, Better Renting, RSPCA South Australia, the South Australian Civil and Administrative Tribunal and COTA SA.

This feedback informed the final version of the Bill that I am pleased to introduce today.

A key reform in the Bill is to prohibit the termination and non-renewal of tenancy agreements without providing a prescribed reason. Notice of termination on a prescribed ground must be accompanied by written evidence as approved by the Commissioner for Consumer Affairs . This measure is part of a series of amendments that will provide tenants with greater security of tenure and encourage longer tenancies.

It is proposed that landlords will retain the ability to terminate a tenancy by providing a notice of termination due to a breach of agreement, as specified at section 80 of the Act. Landlords will also be able to end a periodic tenancy agreement or not renew a fixed term tenancy agreement because they require possession of the property for the reasons detailed at section 81 of the Act.

To balance the rights of landlords, the reasons that may be used to end a periodic tenancy or not renew a fixed term tenancy will be expanded through regulations. These reasons, which will be finalised after consultation on the supporting regulations, are expected to include when:

The tenant or their visitor intentionally or recklessly causes serious damage to the property, including safety equipment and common areas;

The tenant or their visitor puts neighbours, the landlord, or the landlord's agent, contractors or employees in danger;

The premises are unfit for human habitation, destroyed totally, or destroyed to the extent that they are unsafe;

The tenant or anyone else living at the property seriously threatens or intimidates the landlord, their agent or the landlord's contractors or employees;

The tenant has failed to comply with a SACAT compliance order;

The tenant has already been given two breach notices and the same breach occurs;

The property is being used for illegal purposes;

The tenant has brought in other tenants or sub-tenants without consent;

The tenant has not paid the bond as agreed;

The landlord is a government housing authority and the tenant misled the authority so they could get social housing;

The tenant has been involved in an illegal drug related activity in the property;

The tenant is keeping a pet without consent and SACAT has made an order excluding the pet;

The tenant is renting a house from a charity or a community housing provider and the tenant no longer meets the charity or community housing provider's eligibility requirements to continue as a tenant;

The tenant has engaged in false, misleading or deceptive conduct or concealed material facts from a landlord or agent in inducing the landlord to enter into the tenancy agreement.

Consultation highlighted that some tenants are apprehensive to exercise their rights under the Act, fearing retaliatory eviction. As a measure to ensure that tenants can exercise their rights, such as requesting necessary repairs, the Bill proposes to insert a new section 90A into the Act to allow SACAT to determine that a notice of termination has no effect when SACAT is satisfied it is a retaliatory notice. This change is consistent with the agreement made by National Cabinet to ensure provisions to allow appeals against retaliatory eviction notices are fit for purpose.

I understand that tenants are sometimes forced to leave rental properties due to disproportionate rent increases, which cause their rent to become unaffordable. Section 56 of the Act currently allows SACAT to determine rent to be excessive, by considering factors including the general level of rents for comparable premises in the same or similar localities and the state of repair and general condition of the premises. The Bill proposes to amend this provision to require that SACAT must also have regard to whether the increase in rent was disproportionate, when deciding if a rent increase is excessive. It is proposed that tenants who believe their rent is excessive will have 90 days after being notified of a rent increase, to apply to SACAT for a determination on whether the rent increase is excessive and should be reduced.

The Bill proposes several reforms to encourage longer tenancies. Under the Real Property Act 1886, the title of a registered proprietor is indefeasible subject to, amongst other things, a residential tenancy agreement not exceeding one year. The Bill proposes to amend this to three years to offer landlords greater security from a caveat being placed on their property by a tenant who has a fixed term tenancy agreement exceeding 12 months. This proposed change to the Real Property Act 1886 is consistent with equivalent legislation in other Australian jurisdictions.

Tenants may be reluctant to enter longer fixed term tenancies due to concern about their liability to continue paying rent should they need to end the tenancy early. The Bill proposes to introduce section 75A, which limits the amount of unpaid rent that a landlord can claim to a maximum of one month of rent for each year remaining of the fixed term agreement. This must not exceed six months' rent in total. When there is less than one year remaining on an agreement, a tenant will only be liable for a maximum of one month of rent. It is noted that landlords will remain entitled to the costs associated with re-letting, such as advertising costs. The introduction of section 75A aligns with National Cabinet's agreement 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.

Pets can offer physical and mental health benefits to their owners and can provide support to people experiencing loneliness. Many tenants in South Australia report struggling to find pet friendly rental accommodation. According to the RSPCA, one in five animals surrendered is due to their owners being unable to find a rental property that allows pets.

The Bill proposes to introduce a presumption that a tenant who applies to keep a pet in a rental property cannot have their request unreasonably refused, provided the tenant agrees to comply with any reasonable conditions imposed by the landlord. Reasonable conditions may include requiring the pet to be effectively restrained during inspections and requiring carpets in the premises to be cleaned to a professional standard at the end of the tenancy.

Tenants will have the option to apply to SACAT if they believe their request for a pet was unreasonably refused or they are not satisfied that conditions imposed by the landlord are reasonable.

It is also a challenge for some South Australians to find an accessible rental property. This challenge is intensified by limitations on how rental properties can be modified.

The Bill proposes change to section 70 of the Act, which specifies the process for requesting alterations to rental properties. This change will prevent a landlord from unreasonably withholding consent to an alteration or addition to a rental premises that is minor, necessary to ensure the provision of infrastructure or a service of a prescribed kind, or required for a disability within the meaning of the Equal Opportunity Act 1984 and would not significantly change or affect the structure of the premises. Changes to this section would also prevent a landlord unreasonably withholding consent to an alteration or addition if the tenant has mobility or access needs relating to their age, which is reasonable and necessary for the tenant and would not significantly change, or affect the structure of, the premises.

Changes to section 70 of the Act will make it easier for tenants to make minor modifications such as installing wall anchors to safely mount furniture, adding picture hooks, installing child safety gates and changing internal window coverings. These changes will also create more opportunities for tenants to make changes to improve the accessibility of a property, through measures such as adding safety rails, temporary ramps, and custom shower heads, provided these changes are made good at the end of the tenancy.

All rental properties are required to meet the prescribed minimum housing standards under the Housing Improvement Act 2016.The Bill proposes to introduce section 67A, which will clarify that a landlord under a residential tenancy agreement must ensure that their property complies with these standards on or before the day on which the tenant enters into occupation of the premises. It is noted that section 67A does not require an independent auditor to conduct inspections to ascertain compliance with these standards. Should a rental property not meet these standards, section 67A allows a tenant to request the landlord carry out urgent repairs to ensure the premises complies with these standards. Section 85B will allow a tenant to serve a notice of termination if their rental property does not comply with these standards.

The Bill proposes that tenants will be able to terminate tenancies in other circumstances. Under the proposed section 85AA, when a tenant has served a notice of breach of a residential tenancy agreement on the landlord on two occasions and the landlord has remedied the breach in the prescribed period on both occasions, should the same breach occur again, the tenant may serve a notice of termination without providing a period for the landlord to remedy the breach.

It is proposed that a tenant will also be able to terminate a tenancy in circumstances where the tenant has been offered and accepted accommodation by the South Australian Housing Trust (SAHT) or a subsidiary, or by a community housing provider.

Section 85C proposes that a tenant can terminate a tenancy if they require care of a kind prescribed by the regulations, such as care within a nursing home, and they need to vacate in order to obtain that care, or the tenant requires prescribed temporary crisis accommodation and needs to vacate the premises to obtain that accommodation.

At the National Cabinet meeting on 16 August 2023, agreement was obtained from all states and territories to implement a number of reforms to better protect tenants who are experiencing domestic and family violence.

The Bill proposes measures to strengthen protections for tenants who are victims of domestic abuse. This includes the introduction of section 85D, which will allow tenants to serve a notice of termination in circumstances of domestic abuse by providing supporting evidence to their landlord instead of making an application to SACAT.

Section 90B proposes to allow SACAT to order that a termination notice served on a tenant is invalid, if the tenant has been subject to domestic abuse and SACAT determines the termination notice was served due to the act of a person who subjected the tenant to that domestic abuse.

The inclusion of the proposed sections 66A and 66B will allow a person experiencing domestic abuse to alter any external door or window lock without the permission of their landlord, provided keys to these new locks are issued to the landlord or agent as soon as possible.

Changes to section 89A of the Act are also proposed. These changes will provide SACAT with greater jurisdiction to make decisions about whether a tenant who has experienced domestic abuse and was not responsible for damage caused by their co-tenant, should be liable to pay compensation to the landlord for this damage. In practice, this will allow SACAT to refund a victim's portion of a rental bond and hold a co-tenant responsible for any damages they caused, even when the amount of compensation owed to the landlord is greater than this tenant's portion of the bond.

The Bill proposes to provide additional protections for people living in shared accommodation. Extending the definition of rooming houses will afford more renters living in shared accommodation protections under the Act. The definition of a rooming house will be amended to mean premises in which 2 or more rooms are available for valuable consideration.

The proposed inclusion of sections 103B-103E to the Act establish a rooming house registration scheme for rooming houses with accommodation available for 5 or more persons. This register will be maintained by CBS and require that prescribed rooming house proprietors provide CBS with evidence that they are fit and proper to carry out business involving the provision of accommodation under rooming house agreements.

Further changes to the rooming house provisions within the Act include amending section 105U so that a proprietor may only terminate a rooming house agreement on a prescribed ground and by providing 60 days' notice. Presently, a proprietor can terminate a periodic agreement without ground by providing 4 weeks' notice.

South Australia is currently experiencing extremely low rental vacancy rates, making it a competitive time to be in the market for a new rental property. It is important that tenants who receive notice that their residential tenancy will not be renewed have enough time to secure new accommodation. The Bill proposes to amend section 83A to require that a landlord may only terminate a fixed term residential agreement at the end of the fixed term on a prescribed ground with 60 days' notice, as opposed to 28 days. This will provide tenants with more time to secure a new rental property and make the necessary arrangements to move house.

The Bill also proposes to allow tenants to vacate their rental property within the 60-day notice period and not pay rent after they vacate. This provision will be contingent on a tenant having had their tenancy terminated or not renewed on certain grounds, such as the landlord moving into the property, and requires the tenant to provide seven days' notice to the landlord or agent if they intend to vacate early.

At present, a landlord or agent may inspect a rental property once every four weeks. This is out of step with all other Australian jurisdictions, which allow a maximum of four routine inspections each year. The Bill proposes to amend section 72 of the Act to reduce the number of routine inspections permitted so that a maximum of four routine inspections per year is allowed, unless SACAT order that additional inspections are appropriate. Circumstances that may warrant additional routine inspections include where a tenant has issues with hoarding and more frequent inspections are required to ensure the safety of the property is maintained.

It is noted that section 72(1)(i) of the Act allows a landlord or agent to enter a rental property for a genuine purpose with the consent of the tenant. This section allows for landlords to hold re-inspections, should any issues arise during a routine inspection that the landlord and tenant seek to rectify without a landlord issuing a notice for breaching the tenancy agreement.

As a measure to ensure the privacy of tenants during the sale of a tenanted property, it is proposed that section 72(5a) is included in the Act to allow for regulations to prescribe requirements relating to the production, distribution or publication of documents or records in connection with the relevant entry onto the premises. This will allow the regulations to provide restrictions regarding how tenants' belongings can be photographed and published in real estate advertisements.

As a step towards improving energy efficiency standards in rental properties, the Bill proposes to introduce section 68A, which specifies that any new or replacement fixture in a rental property will be required to meet certain energy or water efficiency standards, which are to be detailed in regulations.

The inclusion of section 73A specifies that a landlord and tenant may enter into an agreement under which the tenant is able to pay for the installation of a solar energy system. This section is intended to clarify that no section of the Act prevents tenants and landlords forming agreements about the installation of energy saving infrastructure by a tenant.

The Bill also proposes changes to statutory and excess water charges. It is proposed that section 73 of the Act is amended to specify that a landlord is responsible for rates and charges not based on the level of consumption, such as the water supply charge. If the premises is separately metered, the landlord and tenant may agree otherwise. Further, a tenant is not required to pay rates or charges if the landlord fails to provide a copy of the invoice within 30 days.

The introduction of section 73B proposes to clarify that a landlord is responsible for excessive water usage charges caused by a fault in water infrastructure or equipment or other appliances, fittings, or fixtures at or connected to the premises when the tenant has notified the landlord of the issue as soon as practicable. It is noted that the tenant and landlord are not responsible for costs associated with a fault that is the responsibility of SA Water.

The Bill also proposes to introduce measures to prevent the provision of misleading information. Section 47C will require that a landlord or agent make prescribed information available to prospective tenants and do not make any statement or representation they know to be false, misleading, or deceptive or knowingly conceal a material fact of a kind prescribed by regulation. It will also be a requirement that tenants are informed of information related to embedded networks, when entering a tenancy where an embedded network is present.

To balance the rights of landlords, and ensure prospective tenants are deterred from providing misleading information, the Bill proposes to introduce a provision at section 47B to require that a prospective tenant does not give a landlord false information or a falsified document in connection with an application to enter a residential tenancy agreement.

At present, a landlord is not entitled to compensation (i.e., break lease costs) where the landlord terminates the agreement due to a breach by the tenant and the breach is for something other than unpaid rent. The Bill proposes the addition of section 84A. This section will specify that landlords are entitled to costs or expenses of a kind determined by the Commissioner in connection with the termination of a residential tenancy agreement in prescribed circumstances.

When National Cabinet met on 16 August 2023, it was agreed to move towards a national standard of no more than one rent increase per year for a tenant in the same property across fixed and ongoing agreements. To implement this, the Bill proposes to amend section 55 of the Act to clarify that an increase in rent, even by mutual agreement, must be at least 12 months after the date on which the residential tenancy agreement was entered into, or, if there has been a previous increase of rent under this section, the last increase. Section 55 also clarifies that if the agreement type changes (i.e. from fixed to periodic) the rent still cannot be increased within 12 months after the start of the original agreement or the last rent increase.

New provisions within the Act are proposed to accommodate changes to the payment of tenant bonds. Changes to sections 61-63 of the Act will allow regulations to provide for lodgement of bonds by tenants and clarify that bonds will be returned to tenants equally unless otherwise consented to or disputed. Further, changes to these provisions will clarify that SACAT may disclose sealed orders to CBS to allow CBS to make bond repayments in accordance with these orders.

Section 63 of the Act specifies the process for the repayment of bonds. At different stages of this process, parties are provided with 10 days to take certain actions. This timeframe of 10 days was designed to allow for communication via the postal system. The Bill proposes that these timeframes are prescribed in regulations, with the view to reduce these timeframes in circumstances where all parties have access to the online bonds system.

The Bill proposes to introduce section 67B into the Act. This section requires a landlord who becomes aware that drug related conduct has occurred at a rental property must test the property for contamination and remedy any contamination so that the property meets the minimum housing standards under the Housing Improvement Act 2016. The proposed introduction of 80A will allow a landlord to terminate a tenancy agreement if they are aware the tenant has engaged in or allowed another person to engage in drug related conduct on the premises and testing indicates the property is contaminated.

The Bill will also clarify that a landlord or agent must not unreasonably withhold consent for a tenant to sub-let a property. To ensure that community housing is reserved for tenants who meet eligibility requirements, a landlord who is a community housing provider may withhold consent for a tenant to sublet the property when the sub-tenant does not meet the eligibility requirements to occupy the property. The Bill also proposes to introduce section 74B into the Act to specify that a landlord or agent must not charge a fee for giving consent to a tenant to sub-let the property.

The Act currently lacks detail about the process for ending a tenancy following the death of a sole tenant. The Bill proposes to amend section 79 of the Act to clarify that a tenancy agreement will terminate 30 days after the death of the tenant, unless an agreement is reached with an administrator or next of kin of the deceased tenant, the tenancy is terminated earlier by notice, or a SACAT order specifies otherwise.

The Bill proposes change to requirements regarding the manner and payment of rent. Changes to section 56A of the Act ensure the payment of rent is in a reasonably convenient manner and, in particular, to ensure that at least one means of payment is electronic and does not involve the collection of rent by a third party for a fee. This will guarantee that tenants who seek to transfer rent payments electronically, are able to do so without being charged.

It is further proposed within the Bill that section 99J of the Act is amended to prevent a landlord, agent, or database operator charging a tenant a fee for giving the tenant personal information listed about them on a residential database.

Section 101 of the Act specifies that the income derived from the Residential Tenancies Fund may be applied for purposes connected with, or arising under the Act or the Residential Parks Act 2007 that are approved by the Commissioner. The Bill proposes to amend section 101 so that the Minister responsible for the Act may also approve the application of this income.

The Bill proposes to introduce section 114A into the Act, which provides that except in exceptional circumstances, leave must not be granted in relation to an application for a review of a decision by SACAT if a person was ordered to make a payment to another person and that has not occurred. This section is intended to prevent parties applying for a SACAT decision to be reviewed in order to delay making a compensation payment. A person will not be prevented from applying for a review of the decision when the compensation payment has been made.

The South Australian Government recently announced it will explore making the necessary changes to ensure ancillary dwellings, such as granny flats, can be rented to non-family members. This Bill proposes change to the definition of a residential tenancy agreement within the Act, to clarify that a residential tenancy agreement can include an agreement to rent a granny flat.

Reforms to the Residential Parks Act 2007 are also proposed by this Bill. As a measure to encourage transparency relating to embedded networks, section 14 will be amended to require that a park owner must provide prescribed information to a resident if electricity is supplied via a connection point that is part of an embedded network.

The Bill also proposes change to section 18 of the Residential Parks Act 2007 to include a new provision clarifying that residents of residential parks are not required to pay entry or exit fees, a management fee, a fee for amenities provided by the park (known as a communal contribution fee) or any other prescribed fee regardless of how the payment is described, including if this additional fee is described as 'deferred rent'. However, the resident and park owner may still agree to defer the payment of rent under an agreement so that it is paid at a later date than when it would fall due. Late rental payments must be calculated with specific reference to the regular rent fee payable for occupation. For example, a residential park owner may agree to allow a resident to pay $20 of the weekly rent of $200 late such that $180 is paid now and $20 is paid after the due date.

To discourage landlords and residential park owners from contravening the Act and the Residential Parks Act 2007, the Bill proposes to raise penalties to ensure the costs of contravening provisions are consistent and proportionate deterrents.

The Bill progresses reforms to South Australian tenancy laws that will ensure tenants are safe, secure and happy in their homes. They are also key in shaping the roles and responsibilities of landlords and land agents. These changes are significant, as they are a key component of the first substantive review of the Act since 2014.

I would like to thank everyone who participated in the review of the Act, through completing the survey, making submissions and sharing their stories.

In particular, I also thank the Real Estate Institute of South Australia, SACOSS, Uniting Communities, Anglicare, Shelter SA, SA Unions and the Honourable Robert Simms MLC who have worked constructively with the Government on these reforms.

Subject to passage of this Bill through Parliament, I will seek further amendments to the Residential Tenancies Regulations 2010 to support the changes proposed in the Bill.

I commend this Bill to the House and I seek leave to insert the Explanation of Clauses in Hansard without my reading it.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Residential Tenancies Act 1995

3—Amendment of section 3—Interpretation

This section is amended to allow receipts to be in paper or electronic form.

4—Amendment of section 55—Variation of rent

Subsection (6), which currently disapplies section 55 from a provision of a residential tenancy agreement under which the rent payable under the agreement changes automatically at stated intervals on a basis set out in the agreement, is deleted.

5—Amendment of section 81—Termination because possession is required by landlord for certain purposes

Section 81(4) is amended to adopt language consistent with section 91A(1).

6—Amendment of section 100—Residential Tenancies Fund

The Commissioner is authorised to pay unclaimed money to the Treasurer in accordance with section 6 of the Unclaimed Money Act 2021.

7—Amendment of section 105I—Rent increases

The equivalent amendment to the amendment to section 55 is made in relation to rooming house agreements.

8—Amendment of section 105U—Termination of rooming house agreement

The phrase 'providing for accommodation on a periodic basis' is deleted so that section 105U(6) applies to fixed term agreements as well as periodic ones.

9—Amendment of section 114A—Internal review in relation to certain orders

Certain orders are excluded from the definition of relevant decision.

10—Insertion of Schedule 4

Schedule 4 is inserted:

Schedule 4—Transitional provisions—Residential Tenancies (Miscellaneous) Amendment Act 2025

Transitional provisions are inserted for the purposes of the measure.

Debate adjourned on motion of Mr Teague.