REIQ stands by best practice recommendation to defend against new tenancy laws

The Real Estate Institute of Queensland (REIQ) is setting the record straight on its best practice recommendation for managing tenancies once new tenancy legislation is introduced in less than two months' time.

From 1 October 2022, the REIQ recommends that property managers issue a Form 12 Notice to Leave (Form 12), at the start of a fixed term tenancy agreement, in order to confirm the agreed end date of the tenancy agreement.

REIQ CEO Antonia Mercorella said in an effort to allay any misinformation or confusion about this recommendation, the Institute felt compelled to provide clarity and context on the practice.

“In Queensland, even though the parties have agreed on the length of a fixed term tenancy agreement, the law still requires the Lessor to issue a Form 12 at least two clear calendar months' prior to the end date of a fixed term tenancy agreement,” Ms Mercorella said.

“After 1 October, under the new tenancy laws, a failure to provide a Form 12 within the required timeframe will result in the fixed term tenancy agreement defaulting into a periodic agreement.

“When this occurs, the Lessor will effectively inherit a tenant for life unless it can satisfy one of the limited prescribed grounds for ending a periodic agreement. Notably, a tenant will still retain the right to simply terminate the tenancy with 14 days' notice without having to give any grounds.

“That's why we're recommending issuing a Form 12 at the start of each fixed term tenancy, as this simply affirms the agreed contractual terms that the fixed term tenancy agreement will end on the agreed end date.

“Issuing a Form 12 does not, as has been alleged by some organisations, result in an early eviction or, in any way impact the tenant's rights under the fixed term tenancy agreement.

“Further, there's nothing stopping the parties from agreeing to enter into a new tenancy agreement closer to the end date, at which point the Form 12 may be withdrawn.”

Ms Mercorella said the REIQ stands by this best practice recommendation.

“As the peak body for real estate, our role is to ensure that real estate professionals comply with their legislative requirements and agency obligations,” she said.

“It is regrettable that we have been forced to promote this practice but the new legislation has left us with little choice given that it has failed to protect all parties in a tenancy relationship.

“When the new legislation was being developed, the REIQ forewarned the government that this practice would be recommended by the REIQ to preserve the rights of Lessors.

“The irony of the new legislation is that tenants will, from 1 October, have greater certainty and security under a periodic agreement than a fixed term tenancy agreement.

“This is an absurd outcome given that periodic tenancies are inherently about providing maximum flexibility for both tenants and property owners.”

Ms Mercorella said the REIQ had created a new tenancy laws toolkit for property managers which includes templated letters to encourage positive and effective communication with tenants and alleviate any concerns and confusion.

“We want to minimise any confusion through clear and effective communication to tenants, and that's why our template letter explains that the issuing the Form 12 at the commencement of the tenancy does not remove their right to seek to negotiate entry into a new tenancy agreement at the end of the existing agreement,” she said.

Example of how the new laws will work from 1 October

Lessor and Tenant enter into a fixed term agreement with an end date of 31 December 2022.

In order to end the agreement, a Form 12 must be issued by the Lessor/property manager by no later than 28 October 2022.

Failure to issue a Form 12 by this date will result in the fixed term agreement becoming a periodic agreement despite the agreed end date.

Once this happens, the Lessor will only be able to end the new periodic tenancy agreement if they can satisfy the new limited prescribed grounds. Whereas a tenant may simply issue a notice without grounds with only 14 days' notice.

ENDS

Media enquiries: Claire Ryan, Media and Stakeholder Relations Manager, The Real Estate Institute of Queensland M: 0417 623 723 E: media@reiq.com.au