Understanding Student Accommodation Laws in Australia

With Australia rapidly emerging as a favored destination for students, there exists an opportunity to address the legal requirements for the student accommodation sector. Due to this, some amendments were made to the Residential Tenancies Act (RTA), 1997 to include the relationship between property management and students. In addition, a Property Council was also set up that would specifically cater to the rental property market.

In this blog, we shall talk about how the RTA talks about the rights and duties of property managers towards students. and how the council adds to the authoritative bodies that look after the issues in the industry simply.

What is the Residential Tenancy Act (RTA)?

Most tenancies in Australia come under the Residential Tenancies Act. The first act was passed on the 25th of November 1997 and made effective on the 25th of May 1998. The act outlines the rights and obligations of the following parties:

• Residential tenants, landlords and property managers
• Residential parks or caravan park operators
• Retirement village operators
• Rooming house or boarding house operators

The act also defines certain terms like approved mediator, bond, lessor, tenant, and board. There is also a tribunal set up by the act to listen to the grievances of the tenant or the lessor/ landlord.

The following sections of RTA are the major to student accommodations in Australia:

Section 4: Section 4 states that the act would apply to all the agreements, whether they have come into force before, on, or after the commencement of the act, and contains subsections about periodic agreements. If the rental rate in the agreement changes, it will start from the day the act has been enforced. In the case of fixed terms agreement, it shall be considered to be enforceable from the day of the act, if:

• the term of the tenancy is renewed
• the rights and the obligations of the party are assigned or transferred
• a subtenancy has taken place

Section 5: It states that the act does not apply when a tenancy has been taken into good faith for buying, selling, or mortgage-backed property. It further states that the statute will not apply if the tenant boards or lodges.

Section 6: This mostly discusses the places where the act will not apply, such as mobile homes, hotels, club spaces, retirement communities, nursing homes, and hostels, as well as locations on college campuses.

Sections 7 & 8: They define the standard terms and inconsistent terms of the agreement. If there is any term in the tenancy agreement that comes under the definition of inconsistent terms as given under the act, any of the parties to the agreement can apply to the tribunal for the usage and the meaning of such term.

Section 10: It takes a deep dive into the steps that would be taken by the tribunal when it has received an application for the inclusion of the inconsistent term. After determining whether the consent of the other party on the term was obtained fraudulently or under any undue influence, it will take steps like:

• supporting the term
• Replace the inconsistent term with the previously used one if there is another term that is equivalent to it.
• if there is no other term then substitute the term with an equivalent one.

Section 11: It talks about the compliances and the obligations that have to be followed by the lessor or tenant and the agent of the lessor or tenant before the commencement of the agreement. The lessors shall provide the tenant with a copy of the tenancy agreement and it shall highlight the inconsistent terms to avoid any confusion.

This shall also include the lessors’ full name and the address where they can be contacted by the tenant. In case there is an agent involved, the full name of the agent, the fact that they are an agent to the lessor or the tenant, and if there is a company involved then, there should be the name of the company and the person who can be contacted for the tenancy agreement as given in section 14.

Section 15: Under this section, the act talks about the consideration that can be accepted by the lessor. It says that the lessor may only accept rent or a bond in consideration for giving the tenant the right to reside in a premises. It also speaks about the conditions in which the lessor shall not accept any consideration from the tenant, which include:

• Extension or renewal of the tenancy agreement
• transfer of the tenant’s right under the residential tenancy agreement
• consenting to the tenant agreeing or entering into a tenancy agreement with a subtenant
• vacating the premises
• giving the tenant the key to the premises
• informing the tenant about the availability of the premises for occupation

Sections 16 & 17: As for these sections, the lessor may also accept a guarantee, indemnity, and insurance as an alternative to the bond for the fulfillment of the tenant’s obligation.

Section 18: For any qualms relating to holding a deposit, one can refer to this section as it defines “holding deposit” and advises the lessor to not accept any deposit. Additionally, it holds any agreement void, which talks about holding deposits.

Section 73: In this section, we get to know how any of the parties can make an application for the resolution of the tenancy dispute. An application shall:

• written form and be approved by the Registrar
• contain the required particulars
• be accompanied by the required fees

If the mediation fails and the parties do not agree on common conditions the Registrar may refer it to the Tribunal. They may also call for a preliminary conference if they deem it necessary.

The Property Council of Australia

The Property Council of Australia was formed as a Building Owners and Managers’ Association of Australia (BOMA) in the year 1969 representing property developers and property owners and got its current name in 1996. The council works for the upliftment of the industry and creates a better life for everyone involved in the industry. The research that is done, not only helps the members make better business decisions but also the policymakers to make well-informed decisions that result in the growth of the people.

• The recent data on the Property Council, says that the data shows that in July there were 131,640 students in Australia which was 60,420 more than the corresponding month in the previous year. According to the report “Accommodating the Growth in New Students” by CBRE, around 6,000 new PBSA beds will be constructed in Australia between 2023 and 2026.
• The Student Accommodation Council was formed in 2022 and it intends to give voice to the purpose-built accommodation (PBSA) sector. Providing home to over 76500 students, the sector provides alternative housing options to international students. While providing multiple housing options for students, it also reduces the pressure on the rental market.
• The property industry is one of the largest industries in Australia. Despite of this the number of student accommodations built has been unable to keep up with the number of student visas being approved. This has made the purpose-built accommodation providers call for better planning student housing laws to increase the speed of construction. Despite a 7% rise in the supply resulting from recent projects, there is still a need for additional beds to accommodate future demand.
• The tax impositions add to the increasing cost of land and construction. It is also pointed out that the sector needs to be recognized outside of the “alternative asset class” to make investment easier. This also needs to extend to the Residential Tenancy Act which needs to acknowledge the PBSA sector.
• In one of the recent developments, the Australian government announced that it is going to tighten the immigration rules for international students. The Student Accommodation Council made a statement saying that the government’s migration strategy should focus more on quality visa approvals and closing existing loopholes, possibly with the support of the state and the territory government.

Conclusion

In conclusion, Australia's emergence as a global student hub gave way to the amendments to the Residential Tenancies Act (RTA), acknowledging the unique dynamics between property management and students. The establishment of the Property Council addresses industry concerns, enhancing governance. The RTA defines rights and obligations, encompassing tenants, landlords, and property managers. Sections 7-19 delve into tenancy agreements, with the tribunal addressing inconsistent terms.

The Council, born in 1969, serves as a vital advocate for property developers, fostering growth through informed decisions. Despite a surge in Purpose-Built Student Accommodation (PBSA), challenges persist, such as regulatory complexities and tax burdens. Recognizing PBSA beyond an "alternative asset class" is crucial for sector development and investment facilitation. It also tends to provide an outline for the legal requirements in the Australian Student Accommodation sector to streamline the process. Stay updated with the latest legal requirements and regulations for student property operators by listing with amber.