Qld Rental Law Update

The Queensland government recently announced the proclamation dates for stages two and three of the New Rental Laws, being 30 September 2024 and 1 May 2025 respectively.

Break of Lease

Effective from 1 October 2024, all new leases will be governed by the new legislation in relation to the amount of compensation that a tenant who breaks their lease will be required to pay. They have certainly made the changes in the tenants’ favour, and it will see investors left out of pocket when a tenant breaks their lease.

Leases that were signed prior to 30 September will still be treated within the framework prior to the proclamation so tenants will be remain liable for the full break of lease costs and rent until a new tenancy commences.

The new method for calculating break-of-lease costs will now be determined by how much of the tenancy has passed, existing leases are not affected until they are renewed.

Where less than 25% of a tenancy has passed, the maximum cost for a tenant is now the equivalent of four weeks rent and this drops to a maximum of 1 weeks rent where more than 75% of the tenancy has passed. Tenants will no longer be responsible for the re-letting costs on top of the compensation payable.

For agreements up to 3 years it's the lower amount of the specified reletting costs or the rent until a new tenant/resident moves in.

In these examples, the RTA illustrates how reletting costs are calculated based on different scenarios of lease duration and weekly rent. For instance, with a fixed lease term of 12 months and a weekly rent of $500:

• less than 25% of fixed term expired – if a tenant/resident breaks the lease after 3 months (25% expired), the reletting cost would be 4 weeks' rent, totalling $2,000

• 25% to less than 50% of fixed term expired – breaking the lease after 6 months (50% expired), results in a reletting cost of 3 weeks' rent, totalling $1,500

• 50% to less than 75% of fixed term expired – breaking the lease after 9 months (75% expired), results in a reletting cost of 2 weeks' rent, totalling $1,000

• 75% or more of fixed term expired – if the lease is broken after 11 months (91.67% expired), the reletting cost would be 1 week's rent, totalling $500.

These calculations demonstrate how reletting costs vary depending on the percentage of the tenancy term that has expired at the time of tenancy termination, using a weekly rent of $500 as the basis.

If there is any bright side, I was speaking with our Terri Scheer Insurance representative, and he advised that Terri Scheer are looking to upgrade their policies so that any loss incurred by a landlord where a break of tenancy occurs can be claimed under “tenant abandonment”. Please contact your property manager should you want to know more about Terri Scheer Insurance.

Other Changes

Other changes that come into effect are that a tenant must be invoiced within 4 weeks of the owner or property manager receiving an account for water, electricity or gas. If you receive the accounts and then send to us for the invoicing of tenant, please send them as soon as possible as if they are received outside of the new timeframe a tenant does not have to pay the account.

The maximum amount of bond that can be taken is the equivalent of 4 weeks rent, previously this only applied to properties under $750 per week. Where we have taken more than 4 weeks rent a tenant will be able to apply for the amount over 4 weeks to be refunded when the lease is renewed.

Many of the changes that are coming in May 2025 are still having the details finalised and I will provide an update once we have more information available. These changes relate to:

• How we can ask an interested party to apply.

• What information we can ask from an applicant for a property.

• Increasing the notice period for entry from 24 to 48 hours.

• How often we can enter a property once a notice to leave has been issued.

• The process for approval to attach fixtures or make structural changes.

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For more information, please contact Gavin McInnes on 07 3367 8681 or gmcinnes@grmlaw.com.au.

 The information contained in this article is general in nature and cannot be regarded as anything more than general comment. Readers of this article should not act on the basis of this comment without consulting one of GRM LAW 's legal practitioners who will consider their particular circumstances.

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