Canberra rentals have been required to meet minimum ceiling insulation standards since April 2023. Photo: Banks Photos.
No compliance programs or assurance activities have been carried out by the ACT Government to ensure its ceiling insulation standard in rental properties is being met.
Instead, the “onus is on the tenant to seek court orders” if a landlord fails to comply with the mandatory minimum standard, an Auditor-General performance audit report has found.
ACT Government agencies had considered compliance and enforcement activities during the planning stage in 2021.
The preference was to start with a “relatively light-handed approach” with more “intrusive” measures to be introduced if poor compliance was discovered.
The Auditor-General found no such activities have been carried out since the law came into effect in April 2023.
“Compliance and assurance activity was initially planned for, and supported by, a range of stakeholders but has not been progressed,” the report notes.
“Enforcement of the standard relies on tenants seeking recourse through ACAT [the ACT Civil and Administrative Tribunal] to enforce contractual rights associated with residential tenancy agreements.
“This places an unfair burden on tenants, who may not be equipped to undertake such an action.”
Landlords are required to maintain records of their compliance with the standard and to truthfully disclose their compliance status.
But there’s no assurance process by ACT Government agencies to verify that landlords have kept adequate records.
The Residential Tenancies Act 1997 requires rental property ads to state whether premises comply with minimum housing standards or are exempt.
A commissioned analysis of rental property ads for the first 12 months of the standard’s implementation found about 85 per cent disclosed whether the premises complied with the minimum standards.
Of these, about 20 per cent did not comply with the standard.
“[The contractor] did not verify this information and there is a risk it is subject to misrepresentation by landlords and/or property managers,” the report notes.
“ACT Government agencies have not established a practice to monitor compliance with rental advertisement disclosure.”
There’s no penalty for non-compliance with the ceiling insulation standard in rentals, but there is for non-compliance with advertising and disclosure requirements.
Penalties of up to $800 for individuals or $4050 for corporations may apply.
The Auditor-General noted this amount was significantly less than the price of upgrading or installing insulation, which can range from an estimated $5000 to $15,000.
The revelation has been condemned by rental advocates.
Better Renting deputy director Bernadette Barrett said leaving it up to tenants to take a landlord to ACAT to confirm compliance was “unrealistic and unjust”.
“We cannot leave it to renters to be the enforcers … the government should be in charge of enforcing the law, not renters,” she said.
The Auditor-General found that, as of August 2024, there was no intention by ACT Government agencies to undertake compliance or assurance activity.
Ms Barrett said while the government had taken the “important first step” in introducing the standard, the lack of action meant it was “almost impossible” to know whether it had been implemented in practice.
“ACT renters have been let down by a lack of action to ensure compliance,” she said.
No cases in regards to rental ceiling insulation compliance have been taken to ACAT (as of October 2024). The tribunal can order costs up to $25,000.
Ms Barrett also took issue with the lack of penalties for landlords who ignored or disobeyed the law, given the penalty for a misleading ad was much lower than the cost of installing insulation.
“It sends a message that non-compliance is cheaper than doing the right thing,” she said.
Access Canberra received three complaints between August 2023 and February 2024 regarding estate agents not disclosing whether a property was compliant with the minimum standard for ceiling insulation. These were resolved by Access Canberra, with one case involving a conciliation process with the real estate agent.
Ms Barrett said Better Renting hadn’t heard specifically from tenants about issues with ceiling insulation, but felt education about a renter’s rights needed to be improved. She also wanted to see a simpler reporting process for renters.
“At the end of the day, renters are the ones paying the price with colder homes, higher bills and poorer health,” she said.
“Renters in Canberra shouldn’t have to face another winter shivering in non-compliant homes.”
An ACT Government spokesperson did not address Region’s specific questions about the lack of compliance activities and whether any were planned, but did note a formal response would be released “in due course”.
“The ACT Government adopted a balanced compliance and enforcement strategy as part of the minimum energy efficiency standard for rental homes, designed to benefit renters while considering the costs to landlords and other stakeholders,” they said.
The spokesperson said the strategy included the requirement for landlords to maintain evidence of compliance, giving renters the right to access this evidence and “utilising” existing ACAT processes and remedies for rental disputes where evidence was “unavailable, inaccurate or not genuine”.
They highlighted the positives of the report, including around safety.
“Importantly, the ACT Audit Office did not find any significant electrical, fire or safety risks associated with the installation of ceiling insulation under the regulation,” the spokesperson said.
