Reform to the state's tenancy laws to give renters the right to keep pets at rental properties will spook investors, and could have adverse effects on prices within the market, the Real Estate Institute of Tasmania says.
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The government last month tabled legislation in parliament which would allow tenants to have pets at rental properties without the owner's consent, however, owners would need to be notified about the presence of pets.
The decision to prevent a pet from living at a property would need approval from the Tasmanian Civil and Administrative Tribunal.
The property owner will have just 28 days to apply to the tribunal to object to pets at their property.
REIT chief executive Michael Tynan said the government's bill provided no protection for investment property owners over costs for damage and remediation, unless a claim was taken to the tribunal which, in turn, cost time and more money.
"The Tasmanian legislation, in its current form, is unworkable for industry," she said.
Ms Tynan said following data from other states with similar legislation, it was estimated that about five per cent of investors would leave the private rental sector
"(This) equates to some 2335 properties," she said.
"In a private rental market which is already under-supplied, this will have a catastrophic impact on both affordability and the continued sustainable supply of rental properties.
"For those tenants already being affected by the cost-of-living crisis, this will also mean increased rents."
Ms Tynan said REIT would like to see pent bonds included in the government's bill, mandatory fumigation and cleaning at the end of a lease, and a condition to break leases or remove pets in instances when owners are not initially notified about pets on a property.
Companion Animal Network chief executive Trish Ennis said owners were protected against property damage under section 53 of the Residential Tenancy Act which required renters to leave the premises in the same condition as when they moved in.
The Dogs Home of Tasmania in a submission to Consumer, Building and Occupational Services on the bill stated there was no logical reason to allow pet bonds.
"The current levying of rental bonds is intended to cover any damage left by renters and is sufficient, given that bonds are based on a multiple of the weekly rent," it said.
"Rent costs are currently inflated and often exceed 40 per cent of household income.
"There is already an expectation that exiting renters clean carpets and fumigate if necessary and we believe this is sufficient."
The legislation is scheduled to be debated when parliament resumes sitting at the end of July.