In April, the WA Parliament passed the Residential Tenancies Amendment Bill 2024. This represented a significant step in bringing the amendments, first proposed in May 2023 by the then-McGown government, into effect.

Addressing the bill’s progression, REIWA CEO Cath Hart clarified that the changes were yet to come into effect but were expected to be rolled out in “three phases”. In this blog, we’ll explore each of these phases and what these plans mean for you as a landlord.

Residential Tenancies Amendment Bill 2024: Planned roll-out

Phase One: Rent bidding and retaliatory action

Expected to come into effect in May 2024

In an effort to stamp out rent bidding, landlords and property managers will be required to advertise rents as a fixed amount, not a range, and will be prohibited from encouraging lease applicants to offer a higher bid. Prospective tenants will still be able to propose a higher rental amount at their own discretion and this will not be considered a “bid”.

Further, if a tenant believes that their landlord has engaged in “retaliatory action” as a result of the tenant exercising their rights as a tenant, they will now have access to legal provisions that enable them to “seek remedy or compensation from a court”.

Phase Two: Annual increases, pets, modifications and dispute resolutions

Expected to come into effect in mid-2024

During this phase, rental increases will be limited to once every 12 months rather than once every six months. This will only apply to rental agreements signed after the change has come into effect – it will not be retroactively applied to pre-existing leases, including any new leases entered into between now and the change coming into effect.

Tenants will also be able to make minor changes to a property, though they may be required to return it to its original condition at the end of their tenancy – the specific details of this process are yet to be finalised. Landlords will only be able to refuse these modifications under particular circumstances, and any disputes between landlords and tenants will be referred to the Commissioner for Consumer Protection (‘the Commisioner’ henceforth) for evaluation.

All tenants will be allowed to keep pets at their rental property. If a landlord wishes to prohibit them from doing so, they must seek permission from the Commissioner and have a reasonable justification. That being said, landlords will still be able to place conditions on tenants keeping pets, though the specifics are yet to be confirmed. Pet bonds of up to $260 will continue to be required.

Phase Three: Security bonds

Expected to come into effect in 2025

The final phase will see the process for releasing security bonds at the end of a tenancy agreement streamlined for all parties. Tenants and landlords will be able to apply separately regarding how bond payments are to be disbursed, thereby speeding up the process. The Commissioner will also deal with disputes related to bond repayments.

What’s the impact on landlords?

REIWA indicated their support for the changes, recognising that they strike a balance between tenant and landlord needs. They also underscored that the changes will bring a degree of certainty to the market, ending speculation and likely closing the book on any more changes in the near future.

Reduced administrative burden

The implementation of a streamlined process for returning security bonds and resolving disputes could potentially reduce the administrative burden for landlords, as well as any legal costs. Though the process of resolving disputes with the Commissioner (rather than the Magistrate’s Court) will likely involve a learning curve for all concerned, there’s a good chance it will also produce faster resolutions and a reduction in conflict.

Rent increase restrictions and financial planning

As the frequency with which rental prices can be increased declines, landlords will need to adopt a more long-term outlook when setting prices. They’ll need to consider the potential for market changes over a 12-month period and adjust their property management strategy and budget accordingly.

Pets and minor modifications

While allowing pets and minor modifications is likely to attract longer-term tenants looking to make a rental their defacto home, it also raises concerns about property damage, maintenance and insurance. Landlords can refuse pets or minor modifications under “reasonable grounds”, but what this entails is yet to be determined. When these guidelines are made available, property managers and landlords will need to digest them quickly and amend future tenancy agreements to include any reasonable conditions that are legally sound. These may include specifications about acceptable pet types and expectations around property restoration.

Conclusion

Though the changes to WA’s tenancy legislation have been promoted as tenant-friendly, the reality is that they’ll likely benefit tenants and landlords alike. Keep an eye out for updates on the progression of the legislation and, once it’s put into effect, make sure to familiarise yourself with the new requirements.

Do you have a question about the changes to the Residential Tenancies Act 1987 and what the new legislation means for you? We’re here to help! Simply send us your query and we’ll be in touch soon.