Changes to The Queensland Property Occupations Act came into effect on 6th June 2024 with some retrospective implications.

Known as the Stage 2 Rental Law Reforms the changes – which many describe as ‘rushed’ - are aimed at levelling the playing field for tenants applying for property. The reforms include how rental property prices can be advertised, and on tenants offering (or landlords accepting) a rent higher than the amount advertised, and a ban on tenants being able to offer months of rent upfront to secure a property.

The most significant change is a property ‘price freeze’. A Landlord is unable to increase the rent received for their property within 12 months of any previous increase. This applies irrespective of whether a new tenancy, a lease renewal, a break-lease, or even if renovations or improvements have occurred on the property.

These changes attach the rent to the property rather than the lease.Therefore, the freeze will also extend to any new owner of the property.

This creates implications for landlords who wish to sell. For instance, many landlords have an excellent long-term tenant in place. As such, the rent is often well under market value.

Previously, purchasers could choose to honour the lower rent or increase it to market value upon a lease renewal. However, if the rent was recently increased, but remains under market value, it must remain so within the twelve-month timeframe.

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This inability to bring the rent to market value could create hesitation from prospective buyers due to the property having a lower than acceptable return, or a potential risk to finance approval due to the lower rent amount.

Additionally, several other factors could impede the ability to sell your investment property for the highest price.

With this in mind, Johnson Real Estate is offering a simple checklist of items any landlord should complete in the twelve months ahead of selling, titled: “Your Exit Strategy”.

Please reach out to the agent who sent you this article to have this checklist emailed to you.

A final note on the rental reforms. In addition to representing our clients’ best interests, Johnson Real Estate’s role is to follow the Queensland Property Occupations Act. We understand the reasoning behind these recent changes and can see what the government is trying to achieve.

We support their implementation and understand that as an agency, we engage with all parties within real estate transactions. Our agency wouldn’t exist without Buyers and Tenants, but this article is written for the benefit of Landlords and Sellers whom we are hired to represent.

Thank you for taking the time to read it.

Written by Adam Horth - Operations Director Johnson Real Estate

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