Last year, several jurisdictions legislated changes to give renters more control over their tenancy, with fewer restrictions on pets, permission to make minor modifications to rental properties, the introduction of minimum standards, additional provisions for domestic violence survivors, and changes in the short-term accommodation market.
While the specifics of the reforms differ across the jurisdictions, these key changes have the potential to impact the way you protect properties with landlord insurance and how claims are dealt with.
Here are five significant changes that occurred last year and what they mean for landlord insurance.
Pets
In July, Western Australia and South Australia joined the jurisdictions that have made renting with pets easier.
In October, New South Wales passed new legislation which will come into effect this year allowing tenants to apply to keep a pet, with landlords only able to decline on certain grounds.
Tasmania is looking at introducing similar changes.
In most cases, landlords are not able to refuse tenants who want to keep pets at the rental unless they have a valid reason.
With ‘pets allowed’ now the default position, some landlords and agents are concerned about potential damage caused by pets.
Implications for insurance: While it is the responsibility of the tenant to repair any damage caused by their pet, in the event they fail to make good, landlords may look to their insurance to cover repairs.
Many landlord insurance providers do not offer cover for pet damage at all, while others may impose low claim limits or place restrictions on cover (such as naming or identifying the pet on the lease).
Landlords and agents should check that their policy includes pet damage, the limits on cover and any conditions.
EBM RentCover policies provide up to $70,000 for pet damage for those named and not names on the lease. Please refer to individual polices for details.
Modifications
New laws allowing tenants to make minor modifications to the rental property came into effect in Western Australia and South Australia in July.
Tenants in the Northern Territory became able to change the locks and make minor modifications to the rental property in January.
A framework for parties to agree on installing modifications necessary for safety, security or accessibility in Queensland rental properties is in the planning stages.
The Tasmanian Government also proposed amending current legislation to allow for safety modifications to be made.
Implications for insurance: As any type of work at the property increases the risk of accidental damage, landlords and agents should check they have the relevant protection – some insurers only offer this as an additional level of cover.
EBM RentCover automatically provides up to $70,000 cover for accidental damage in most policies.
Please refer to individual polices for details
Certain works also need to be undertaken by licenced trades, such as plumbing and electrical, and failure to comply with this requirement could void the insurance.
There could also be an increased liability risk from injury or property damage.
Be sure to check that the policy includes legal liability cover.
All EBM RentCover policies include legal liability cover (up to $20 million or $30 million, depending on the policy).
And while most legislation includes provisions requiring the tenant to return the premises to its un-modified state upon the end of the lease, if they don’t, the landlord may need to claim for tenant damage on their insurance.
Modifications (minor or otherwise) made without the landlord’s consent are considered by many insurers to be ‘deliberate’ or tenant-related damage.
Insurers may not offer cover for this type of damage, but EBM RentCover provides up to $70,000 cover for intentional damage. Please refer to individual polices for details.
Minimum standards
In July, South Australia introduced minimum standards for rental properties.
While minimum housing standards applied to new tenancies in Queensland from September 2023, the new rules came into effect for all remaining tenancies on 1 September 2024.
Implications for insurance: In general, the condition of a premises can have a direct impact on whether an insurer will take on the risk and offer cover.
The introduction of minimum standards may contribute to an insurers’ assessment of the property’s risk profile.
Substandard properties (those which fail to meet health and safety requirements, which already exist in various acts, regulations and codes) may not be insurable.
It is already a condition of most building policies (and will remain so) that the premises must be maintained, and failure to undertake maintenance can void a policy.
Domestic violence provisions
January saw changes to Northern Territory legislation to better support family and domestic violence (FDV) survivors, enabling quicker lease termination and shielding them from liability for perpetrator-caused damage.
Queensland made amendments to terminology and expanded confidentiality requirements for FDV in June.
In July, new options supporting South Australian tenants experiencing domestic abuse came into effect, including opportunities to change locks, end a tenancy immediately, or give seven days’ notice to vacate for temporary crisis accommodation.
The Australian Capital Territory introduced a Bill to allow survivors of FDV to end tenancies quickly and without penalty.
Implications for insurance: Any changes to responsibilities for broken leases which result in landlords being left out-of-pocket could impact loss of rent claims.
Policies should be reviewed to check loss of rent provisions and the terms and conditions that apply to claims.
It is also important to check the provisions for damage caused by tenants as not all policies provide cover.
EBM RentCover policies provide up to $70,000 for malicious damage. Please refer to individual polices for details
Short-term accommodation
Changes to short-term rental accommodation (STRA) rules came into effect in Western Australia during 2024, including the establishment of a register and incentives to move property to the long-term rental market.
The Victorian Government imposed a 7.5 per cent levy on STRA which comes into effect in January 2025.
Also coming into effect in Victoria is an ability for owners’ corporations to ban lots from being used as STRA.
Caps on the number of nights a property can be used for STRA in the Byron Shire in New South Wales came into effect in September.
Implications for insurance: Not only are the rules around STRA different, so are the risks for owners.
Landlords need insurance designed specifically for the short-term market to ensure the risks are adequately covered.
EBM RentCover was the first, and remains one of the few, landlord insurance providers with a dedicated short-term product.
If landlords are looking at switching to or from the short-term market, they also need to switch their landlord insurance to the right type of policy.
Questions? Of course, these are just a few of the changes that came into effect this year.
Other changes include limiting rent increases to once a year, banning rent bidding, and ending ‘no grounds’ evictions, among others.
To sum this up, I don’t need to tell you to always refer to your state or territory legislation and tenancy authority for the most up-to-date information.
But what I can tell you, is that your EBM RentCover Relationship Manager is available if you want to discuss the impact of any legislative changes on your clients’ landlord insurance claims.
Not partnered with EBM RentCover? Contact us today.
