24 Jun 2009

Clayton Utz lawyer warns Queensland businesses to prepare for new residential tenancy laws

Brisbane, 24 June 2009: Clayton Utz Real Estate senior associate Paula Noble has warned Queensland businesses with property interests that they could be significantly impacted by the new Residential Tenancies and Rooming Accommodation Act 2008 (Qld) which comes into effect on 1 July.

Paula said the new Act introduced a raft of changes to existing laws in areas including leaseback arrangements, entering into tenancy agreements, rental increases and a landlord's rights of entry, and warned businesses to ensure they fully understood their obligations.

"Businesses really need to take a close look at the new Act to make sure they are complying with it," she said.

The new Act repeals the existing Residential Tenancies Act 1994 and Rooming Services (Accommodation) Act 2002 and will directly affect a range of parties including property and infrastructure developers, mining companies, banks and real estate agents.

Paula said one of the major changes under the new Act involved leaseback arrangements. "It is common practice in any project development work to invite the previous landowners to leaseback their residential property following the acquisition of a property for a project," she said.

"The repealed Act did not apply to such leaseback arrangements, provided the lease was formed under a term of the contract of sale. While the new Act provides a similar exemption, the lease must be for a period of 28 days or less in order to qualify for the exemption. If the leaseback arrangements exceed 28 days, the buyer/landlord will need to strictly comply with the provisions of the new Act."

Paula said the new Act also lengthened from four weeks to two months the period of notice a mortgagee in possession must give a tenant before taking possession of a residential property.

"If a mortgagee provides a tenant with two months' notice to leave, the tenant may vacate at any time and will not be liable for any loss or expense merely because the tenant vacates the premises early," Paula said.

Among other changes, the Act also prohibits the advertising of residential premises for lease unless a fixed rental amount is stated. Tenants are also given the right to dispute any "unreasonable" significant changes upon the renewal of a tenancy agreement.

"If the tenant considers that the significant change is unreasonable, the tenant may apply to a tribunal for an order within 30 days after the tenant enters into the new agreement," Paula said.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.