‘Meth labs’ hit SA landlords as rents ‘out of control’
Brutal stories about rogue tenants trigger unexpected calls for bonds to be scrapped in a government inquiry.
Scrapping bonds and introducing rental caps were pitched by landlords in SA parliament today in a bid to crack down on the devastation caused by “meth labs” and “out of control” prices.
SA landlords say “rogue tenants” have left them thousands of dollars out of pocket, with the Australian Landlords Association (ALA) calling for a rental insurance scheme to replace bonds.
“An overall point of view, from a landlord, the bond very rarely actually covers the risk that they’re up for,” ALA President Andrew Kent said.
“If someone, for example, uses your property for a meth lab, you have to strip every single piece of soft material out of the place, which is $200,000 to $300,000.
“You’re never going to get that bond, and the sort of person who does that sort of damage is never going to actually be able to pay it.”
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Kent said scrapping bonds would also benefit tenants when they move, who had reported issues “with getting the bond out in time to pay the bond for the new property”.
Landlords Association SA Inc secretary Tess Newton told the Parliament’s Select Committee Inquiring Into the Conduct of Real Estate Professionals today that she heard from a landlord last night about a “rogue tenant who did an incredible amount of damage” leaving the landlord $60,000 out of pocket.
“Sometimes we do come across or take on unknowingly difficult tenants, and difficult tenants can be an awful cost and burden for landlords,” Newton said.
“Some, unfortunately, do use drugs, and that’s a real problem in a house and there’ve also been drug labs found in houses, which is terrible, obviously, and we as landlords don’t want that.”
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Newton said in these cases, the South Australian Civil and Administrative Tribunal can recover lost rents and mediate the relationship between landlords and tenants, but the process is “slow and laborious”.
She told of her own difficult tenant who was 12 weeks late on rent, saying she went through the tribunal which put the tenant on a payment plan.
Newton said the tenant “complied for a while, and then missed a week or two again, so I had to go back to the tribunal and all this long drawn out process”.
“Twelve weeks in arrears, by the time they did eventually get an eviction order, then I had to get the bailiff because she wouldn’t get out, and then she broke into the house,” Newton said.
Newton said she was a private landlord with “compassion” for her tenants amid the current record rent prices in South Australia and a fifth consecutive interest rate rise introduced this week.
“I personally see a lot of flaws in the real estate market. I think prices are far too high, and it’s just got out of control, and that has contributed obviously to higher rent,” Newton said.
“I probably shouldn’t actually say this because it’s probably not in favour of most landlords, but I have heard that rentals should be capped, and that would, in many ways, be beneficial to the market.
“But at the same time, the thing that should really be capped or regulated a whole lot more is real estate sales, because the more prices go up in real estate sales, if someone’s investing, they have to borrow more; if they borrow more, they’ve got higher repayments. So it’s a vicious cycle.”
She claimed that over decades of being a landlord, when she has engaged real estate agents, they encouraged her to raise rents; “it’s always been the situation: ‘no, you need to offer more, and the places are not necessarily worth more’, so that needs to be regulated as well”.
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