#2 Holding Fees
At present, there are a number of issues that can arise for landlords in connection with the acceptance of holding fees.
One issue is that a holding fee currently binds the landlord to the approved applicant, but does not bind the approved applicant to the landlord. The landlord is effectively obliged to take the property off the market, but the applicant can withdraw their application at any time before the agreement is signed. This means that the landlord misses the opportunity to consider other potential tenants during the holding period.
Another issue is that accepting a holding fee prior to an existing tenant vacating the premises can leave the landlord liable to pay temporary accommodation costs for a new tenant if the property is not vacated on the agreed date.
These issues need to be resolved in the revised legislation.
Recommended: If the holding period exceeds seven days, the holding fee should be able to be increased to the equivalent of a maximum of 14 days’ rent.
Recommended: If a holding fee is accepted prior to the existing tenant vacating the premises, the fee should be subject to the existing tenant vacating (as the tenancy agreement will not be able to be signed until after the tenant vacates). A holding fee equivalent of a maximum of 14 days’ rent should be payable in these circumstances.
Recommended: If the approved applicant fails to sign the tenancy agreement within the seven day holding period or by the original agreed signing date (whichever is earlier), the landlord can give notice that the property is being placed back on the market. In such a case, the holding fee will be forfeited by the approved applicant.
#3 Rental Bonds
Without doubt, there are aspects of the bonds regime that need to be modernised to meet the needs of the current marketplace.
Maximum bond amount
The current maximum bond of four weeks’ rent does not provide for an equitable balance between the landlord and the tenant. Legislation in other states recognises that there are circumstances where a higher bond is necessary.
Recommended: The legislation should provide for the ability to apply a bond of six weeks’ rent where the premises are furnished or the rent is more than $450 per week.