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Discover the secrets of successful property management and investing on "The Property Investors Handbook" podcast. Join Colleen Sutherland as she shares expert insights and strategies for acquiring, managing, and maximising returns on real estate investments. Whether you're a beginner or seasoned investor, this podcast is your essential guide to navigating the world of property investment. Tune in and unlock the keys to financial success in real estate.
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Welcome back to the Property Investors Handbook Podcast. I'm your host, Adam Bell, and today we're diving into the recent changes in rental laws in Queensland, which took effect back on the 6th of June, 2024. Now, these changes are reshaping the rental landscape, ensuring fairness and transparency for both tenants and property investors.
Joining us again is Colleen Sutherland from Sutherland's Property Management Group, who's gonna help us navigate through these new regulations and really just. Break them down in layman's terms. So we understand what they're all about.
Colleen, welcome to the show.
Thank you so much, Adam.
Okay. So we've got four to go through, don't we? And they, they are pretty big changes and we want to make sure your clients understand what they are, what they mean, and also what it does mean for tenants. So I think really, we just really want to know what, what they are.
So I understand the first one rent bidding, is now. unlawful Can you explain what that actually means?
What it means, so rent bidding has always been, unlawful in Queensland. We must advertise a property at a fixed rent and then sell it. That's how much the property is. So say it's $500 a week.
Mm-Hmm. .
And that's how much the property is.
Sure.
What's happening now is there are tenants who are offering above the rent that we've advertised in order
to get the property in order.
Yeah. In order to be first in line with the applications. So, and it could be as little as $10 more, or it can be $50, a hundred dollars more. And what happens there is then the landlord will go, yep, let's choose that guy who's.
and then that knocks everybody else out of the race. Right.
You now can't do that.
We now can't do that. We can't accept it. So even if you come and say to me, well, I'll give you an extra 50 and I don't have to know about it, it's because it's not advertised. That could be a bait and We could get into a lot of trouble if we accept that extra 50 a week.
Sure. Okay. So what you're doing there then is you've got to advertise rental properties at a fixed price. Yes. And you cannot accept any rent offers above the advertised price. Yes. And, so that aims to, again, transparency, fairness, making the process straightforward and more equitable for all parties.
All renters, all tenants have a fair crack at the property.
So what we've got at the moment is a affordability crisis more than anything else. And yeah, that knocks every other tenant out who's just scraping in to be able to afford it and someone's just You know, and that allows that tenant to have a fair, go at the property.
Okay, so it's making sure you spend the right amount of time and appraisal work getting that rental price right, talking that through with your landlords, because that's going to be it. Okay, got it. Number one, rent bidding is unlawful. Okay, two, Capped rent in advanced, in advanced payments. Explain this one to me.
So, we've established that it's 500 a week and we're not going to take any more than that. We're not allowed to. So their next option is to offer more money. To
pay rent in advance.
Rent in advance. So ordinarily we can only ask for two weeks. And then every two weeks we ask for another two. Where there's some, tenants who are cashed up for whatever reason, and to get in front of all the other applications, they'll say, I'll pay three months in advance.
Right. So again, that knocks everybody else out.
That puts, gives them an advantage. Yeah, and it
gives them the step up that they'll get it because they paid so much in advance.
Okay, so now that's been capped as what you can do to that, what is the, the maximum now that you can take in advance? If two's normal, what is the cap?
The cap now is one month.
Right, so four weeks.
Yeah, four weeks rent, is the maximum we can take.
In advance. In
advance.
Okay, so being that two weeks is still the standard, that is something a tenant can offer to do, again to maybe just get them a little bit ahead of the game. Yes. Okay. Bye bye. Alright.
On the flip side, can a landlord insist on four weeks in advance?
No.
No. Okay, just wanted to clarify that. I didn't think so, but it is something a tenant can offer to do.
It is. And a landlord can't say, well if he pays three months up front, I'll take him. Yeah, we can't do that either.
Okay. So just to be clear.
Clear on this soliciting or accepting more than that four weeks is a breach of legislation and penalties are applicable. So again, this change is to protect tenants from the financial strain of large upfront costs, ensuring a more accessible rent market. Cool. Cool. All right. Number three. Regulated rent increase frequency now, that's a bit of a mouthful, but we have talked about this in a bit of a In a bit of detail before but and it can get be hard to get your head around But this is where the frequency of rent Increases has been regulated now to provide more stability for tenants and the key now is Rent can now only be increased no more than once a year every 12 months, correct?
Correct. Right. So explain that to me.
So previously, the rent increase was over the tenancy. So if that tenant moved out in six months time, I could get it to market for the next one because the market's moving so quickly. So get it, to market rent and then rent it from there. Whereas we can't do that now.
The rent. amount goes over the property. So if the, tenant only stays six months. and moves out We can't increase the rent until six months time. So everywhere we have to put when the last rent increase was, so that there's always those checks and balances, and be able to justify a rent increase at 12 months.
Right. Okay, I get it. So the regulation applies to the premises, not the tenancies. Correct. You'd be hoping, I guess, especially as a property manager, that you'd want to get, hopefully, your tenancies in line with the premises. So that, so that it makes it easy because once it doesn't, you've got that misalignment and that gap and explain to me in those circumstances.
So again, someone has a tenancy for six months. The rent was at 500 that six months, they move out, The new tenant that has to be at 500 for at least the first six months. However, it would need to be written into the tenancy into the lease. If there was going to be an increase at that halfway point of that next six months.
Tenancy, correct?
Correct. And we still need to give them notice that the rent is going to increase. We're only able to do that because it is written in the tenancy.
Okay. And
then when a tenant breaks the lease that causes a whole, it throws the whole alignment of rent increases and leases. Out of whack again.
Out of whack
again.
Yeah, we have to be very careful on our dates.
Okay, so you've obviously got gone in and got your processes and systems sorted out to make sure the record keeping on this is is top notch so that you can let your landlords know.
Yeah, it manages the risk for the landlord that we've got those dates correct and then we're able to increase the rent at the right time.
Okay. All right. Bit of a tricky one there. Very tricky is that one. Tricky to manage and, again, another great reason to have you guys on board to do it. But, don't envy you on, on all the extra paperwork that might, might bring into, bring into play, especially as you said, with breached leases, et cetera.
Okay, last one. Unlimited rent increase amounts. Explain that one to me.
So, that means we can increase the rent anywhere from 10 a week to 100, 150, 200. There is no limit to what we can increase the rent. at that 12 month mark.
There was before?
There was before, but what happens is some rents are going up extraordinarily high amounts.
So we still have to make sure that the property meets the market as in rental amount, before. What they were trying to bring in is a 2% rent increase So that didn't get passed. So we could only ever increase the rent by 2%.
Sure.
But now we've got the unlimited rent increase.
Okay. Alright, so just to recap then. The four, changes to legislation for everyone to understand.
Rent bidding, is now. unlawful in the fact that you've got to rent advertise a fixed price and you can't accept offers above that price no matter what. Capped rent in advance is four weeks, four weeks only. Tenants cannot pay any more in advance than that. Regulated rent increase, i. e. once every 12 months per property, not per tenancy.
And you are able, as the last one, to increase rent. at any amount that is appropriate at that 12 month stage when you can. Fantastic. I think, look, I think that's pretty clear. I hope that's pretty clear. They are a bit tricky. But look, if anyone does have any more questions, they can obviously get in touch with you, talk it through a bit more.
You might have landlords out there wondering whether they're you know, whether their tenancies do match their, their properties at the moment, their leases. So get in touch if you want to understand where that sits for you. Look, Colleen, thanks for coming in and shedding light on these, up these new rental laws and what they do mean for property investors and tenants alike.
I mean, for our listeners looking to stay compliant and informed, remember that understanding and adapting to these changes really is the key to successful property, investment journey. And there's no need to be scared. Things change all the time. We get through it, we manage it. And, and still get the results that we are after.
So if you are looking for any more information, visit Sutherland's property management group website, which is spmg. com. au. Thanks for tuning in and join us next time on the property investors handbook podcast for more insights on the property market. Colleen, thanks for coming in.
Thanks Adam.