Warm Rentals Bill proposals may get landlords hot under collar

Hughes said he drafted the Energy Efficiency Conservation (Warm Healthy Rentals) Amendment Bill to correct what he described as a "market failure" around rental accommodation.

He said the lack of incentives for landlords to properly insulate homes and have energy efficient heating was a market failure.

He said this failure manifested itself in two ways; landlords find it difficult to recoup any investment through capital gains, and tenants pay the power bills but often do not stay long enough to want to make any capital outlay themselves.

Hughes said that in Australia making energy efficiency ratings on properties a matter of public record raises the value of the improved properties and increases competition between landlords, "with benefits accruing to tenants, landlords and the state through lower health costs."

The Bill includes regulations to prescribe the definition of rental accommodation and minimum energy performance standards, and intends the standards be in place by October 2012 and all residential rental accommodation to meet the minimum standards by 2018.

Also included in the bill is regulation to prescribe fines to be imposed for non-compliance, up to $10,000.

He admitted any legal requirement for landlords to spend money could result in costs being passed on in the form of higher rents, but that mitigating measures could be put in place.

He said the government should "extend the insulation funding scheme and make low interest loans available to landlords for improvement works."

Hughes said that whether the bill was passed into law or not, he was confident there would be either reform or additional legislation around rental property.

"I think we need to acknowledge as we move from more of a home ownership society to a rental society, we need to do more to see a professionalisation of rental accommodation."