From the Principal’s desk, our interpretation of the Residential Tenancies Amendment Act 2024 (WA)

Following the royal assent on 22 April 2024, the WA Residential Tenancies Amendment Act is officially in place. The lengthy history of the bill can be found here.

As a property investor, the new Act will affect you. Here are some of the key changes from the new Act:

1. No rent bidding.

Section 27AA of the RTAA states that ‘Residential tenancy must be offered for rent at fixed amount’. It is an offence to conduct rent bidding to ensure fairness and transparency in the rental market.

2. Rent increase once a year only

Section 30 of the RTAA states that the minimum period between rent increases is 12 months. This will impact the lessor in terms of the rental income they would expect to receive and I strongly recommend the property manager to calculate the amount of rent increase, based on the future rental trend.

3. Commissioner to decide on dispute

Section 11E of the RTAA given the Commissioner the right to decide on the dispute between the tenant and the landlord. This approach is to remove the backlog of the Magistrate Court in bond and rental disputes. Section 11L also states that the Commissioner may refer the parties to the Magistrate Court.

To me, this is a ‘modified’ approach from the Covid period where the mandatory reconciliation is required before any application to court.

4. Must allow pet

Section 50 talks about keeping pets. The new Act states that the lessor can still reject pet requests but only with exceptional reason. If the landlord is not able to reject pet, A lessor may impose a reasonable condition about the number of animals that may be kept at the premises, the cleaning, maintenance or fumigation of the premises or a prescribed matter.

If the tenant is not accepting pet condition or lessor’s refusal to have pet, the Commissioner will have the final say. An application can be made to the Commissioner to rule on the pet condition.

5. Minor modification by tenant

Subdivision 2 & 3 of the RTAA allows the tenant to conduct minor modification. The tenant must make a request in the approved form and include a description of the proposed minor modification. The lessor must respond in writing within 14 days advising whether the lessor approves or refuses the request.

6. Bond

S81 of the Act discussed about bond. In tenancy, most issues come from bond dispute and the Commissioner is the person to go to for any disputes in the future.

7. Retaliatory action by lessor

S26A and 26B states about retaliatory action by lessor. A lessor will be considered to take retaliatory action if the lessor:

• gives the tenant a notice of breach (other than failure to pay rent) and requires the tenant to remedy the breach;
• increases the rent;
• takes action to terminate the tenancy; or
• refuses to renew the tenancy agreement

A lessor will be considered to take retaliatory action if the lessor: • gives the tenant a notice of breach (other than failure to pay rent) and requires the tenant to remedy the breach; • increases the rent; • takes action to terminate the tenancy; or • refuses to renew the tenancy agreement

If a tenant reasonably believes that the lessor has taken retaliatory action after any of the following arises:

• the tenant or a representative entity takes action to enforce the tenant’s rights;
• the lessor or lessor’s agent knows the tenant, or a representative entity has complained to the Commissioner or another government entity about an act or omission of the lessor that adversely affected the tenant; or
• an order of a competent court is in force with the lessor and tenant

This is a grey area, and the Magistrate Court is the legal avenue to determine whether retaliatory action occurred. It is an objective test where the tenant must prove that the lessor has taken retaliatory action. The onus of proof is on the tenant.

With the change in the Residential Tenancies Act, landlords must appoint an experienced property manager to act on their behalf as every single mistake may turn into a complain and the margin for error is very small. I can foresee that the industry will suffer a reshuffle and smaller or newer player may quit the industry as the Residential Tenancies Law is now very complex.

In overall, the amendment is still quite fair as the no-ground termination is still in place. The only ambiguity in law is the retaliatory action which requires further explanation from the Consumer Protection. Next, we should wait for DMIRS to announce the complaint procedure and the role of Commissioner for the process.