ACT announces plans to introduce minimum energy requirements for rentals

New proposed legislation will oblige Canberra landlords to ensure their properties meet minimum energy performance requirements before they can be rented out. Plenty of other highlights from the ACT government’s Climate Change Strategy for 2019-2025 caught the eyes of residents (plans for “car-free” days were mentioned), but this proposed change has been talked about far less, although it will have a far-reaching impact. The legislation is expected to be introduced in 2021, and be in effect by 2022-2023.

2022 will also mark the start of mandatory disclosure of energy performance for rental properties, as is currently the case for all properties listed for sale. This is a law unique to the ACT, but one that has been well-received by buyers as people grow increasingly eco-conscious.

Whilst most of the proposed legislation has yet to be ironed out, so to speak, it is expected that it will require landlords to retrofit their investment properties to meet the minimum energy efficiency rating, if they haven’t already done so. This could cost them between $1,743 to $7,775 (on average), although of course every property is different and will require different retrofitting. This could make new and off-the-plan projects far more attractive to investors, as they will be built to regulation, cutting out thousands of dollars of extra costs. Furthermore, investing into new projects ensures that buyers get the most up-to-date energy-efficient additions, so they are likely to meet minimum standards for far longer, again cutting costs.

Light House Architecture and Science director, Jenny Edwards, says that she believes the changes will be a win for tenants and landlords, especially in the long run.

“It’s a win for landlords – happier tenants as it’s so much more comfortable [and] it increases the resilience of a building meaning it is likely to last longer,” she said. 

Ms Edwards said the improved energy efficiency’s positive effect on the environment should be highlighted, as thousands of students and workers took part in the School Strike 4 Climate in Canberra on Friday.

The proposed changes were welcomed by advocacy group Better Renting with executive director Joel Dignam saying it was a significant development.

“Minimum requirements for rental properties are an essential policy tool for a climate strategy,” he said. You may remember Better Renting from their 2018 report which showed that four in ten rental properties in Canberra have the lowest-possible energy efficiency rating of zero. They found that 43% of rental properties tested had a rating of zero, compared to 4% of properties for sale.

The ACT government is set to have an election in October 2020, which could have an affect on this legislation.

Written: 27 September 2019, Updated: 31 January 2020

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