Why ‘no-cause’ evictions are bad for everyone

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When the NSW government brought in its raft of changes to tenancy laws at the end of last year, the headline grabbing issues were new provisions to protect the victims of domestic violence and limit rent rises in “periodic” or rolling leases to one a year.

In Victoria, the main story around the last tenancy law changes was protection for tenants with pets.

What was missing in both states was the overdue end to “no-grounds” termination rules.

Residential tenancies in most states fall into two categories – fixed term and  periodic.

In a fixed-term tenancy you agree to let the apartment for a specific period, at the end of which the tenant can be asked to vacate or sign a completely new lease.

Under the NSW periodic or rolling agreement, landlords must give tenants 90 days’ notice if they want the property back for any reason, or 30 days if they are planning to sell.

In Victoria the “no-fault’ notice period is 120 days on a periodic tenancy, unless the owner is selling, renovating or occupying the property, when it’s 60 days.

In Queensland it’s two months with a plethora of different notice periods for different situations.

The problem with “no-grounds” terminations is that in a market where there is a shortage of affordable housing, tenants can be very vulnerable to opportunistic rent rises and retaliatory evictions.

It can be so bad that renters are often reluctant to demand their rights in case it triggers a thought process that leads to them receiving a notice to quit.

Perhaps rents in surrounding properties are rising and the owners feel they are being left behind, while the tenants can’t afford to pay much more.

Or, it could be that the owners don’t want to spend a cent more on the property than they absolutely have to. Or perhaps the lure of doubling your rental income through Airbnb is too hard to resist.

However, good long-term tenants are what most responsible owners want.  You look after them and they’ll look after your property, your income is guaranteed, and you don’t have the hassle of trying to find new tenants every year.

This is especially important in an apartment block where your tenant can keep you informed about what’s really happening in the building.  Some owners even give their tenants their proxy votes and propose them for election to the strata committee.

If nothing else, the end of no-grounds evictions would protect us from our worst instincts.

It would stop owners afflicted by rent envy forcing perfectly good tenants out of their homes, because that’s the easiest way to put rents up in one big hit.

It would compel us and our rental agents to listen to tenants’ concerns and complaints. And that would give us more stable communities where more than 50 per cent of apartment residents weren’t dreading the arrival of a three-month notice to quit.

If you had a valid reason for wanting your tenants out, it could still be done. But the desire for more money is no justification for throwing families out of their homes.

Negative gearing is here to stay, but there should be a moral contract that goes with that gift to property owners. We are talking about homes, here, not just investments.

Meanwhile, if you’re not sure about your rights or obligations, landlords and tenants alike should log on to tenants.org.au.  That will take you to the Tenants Union website for your state, where there’s a wealth of information.

A version of this column first appeared in the Australian Financial Review.

One Reply to “Why ‘no-cause’ evictions are bad for everyone”

  1. Avatar Jimmy-T says:

    This is now being discussed in the Flat Chat Forum

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