Kamis, 29 November 2012

Maintenance of NSW public housing to be 'reviewed'

Anyone who has been visiting the Brown Couch for more than a year will know that we've long been keeping watch on the state of repairs and maintenance of public housing in New South Wales.


Since 2008, 'housing services' and 'asset management' have been operating as two entirely separate functions of the NSW public housing system. Combined with a focus on cyclical maintenance at the expense of prompt action on tenants' requests for repairs, this has been to the detriment of both tenants and the properties they live in.

We started to notice some big problems soon after the State Government formalised the split, and sent the NSW Land & Housing Corporation - that is, the legal entity that owns all of our public housing - off to sit under a completely different government department to it's erstwhile overlord, Housing NSW. Since then, tenants have dealt with Housing NSW on matters relating to the management of the tenancy, while the Land & Housing Corporation has kept to itself on matters relating to management of the asset. Now, in order for this approach to work there must be a clear focus on responsive repairs as a priority for asset management, so that when a request for repair is raised by a tenant it is promptly and satisfactorily seen to. The Land & Housing Corporation's current practice doesn't reflect this - tenants are often told they need to wait for repairs, or that the repairs they need are simply not a priority.

This creates a second, and much more insidious problem.

Under the Residential Tenancies Act, a landlord is obliged to maintain a tenanted property in a reasonable state of repair. If there is a disagreement as to what the "reasonable state of repair" should be, a tenant can take their landlord to the Tribunal for an order for repair. If, after all the evidence has been considered, the tenant's view is favoured over that of the landlord, the order will be made.

But when a tenant of the Land & Housing Corporation applies to the Tribunal, it is the tenancy manager - Housing NSW - who turns up to respond. The asset manager - the Land & Housing Corporation, who is also the landlord - might provide some evidence, but that usually just amounts to confirmation of their mistaken priorities. It's not uncommon for tenancy managers, after being told "there's nothing in the budget for that", to express a quiet frustration that the asset managers aren't really letting them to do their job.

... and when the Tribunal orders the repair notwithstanding the landlord's mistaken priorities, the problem created by this separation of roles is further compounded. The tenancy manager has to get the asset manager to accept that their priorities need to change, and this doesn't always go well. In these cases, the tenant is left high and dry. Their only real option is to go back to the Tribunal, where the tenancy manager will turn up to respond again, armed with nothing but the landlord's mistaken priorities and, if the tenant is lucky, the allure of token compensation.

This is a huge problem for tenants, and it's one that has been keeping the Tenants' Advice and Advocacy Services busy. For well over a year, Tenants' Advocates across New South Wales have been advising and assisting public housing tenants to make the most of this botched system. At the same time, we've been telling anyone who will listen that there's a problem here that must be fixed.

Perhaps someone has started listening? It's too early to say. But it seems the Land & Housing Corporation has flagged, in it's recent Annual Report (included in the Department of Finance & Services 2011/12 Annual Report at page 67-149), the development of a new maintenance model. This would form part of a strategy to meet its published objectives. This follows its statement in the 2012/13 budget papers (at page 8.24) that it 'will undertake a strategic review of its maintenance operations over the next two years...'

We look forward to the conversation from here.


Rabu, 28 November 2012

Break fees are broken

'Break fees' for ending your tenancy early are one of the less successful innovations of the Residential Tenancies Act 2010.


To be frank, break fees are broken, and we should go back to square one to fix them.

Under the Act, a break fee is a fee equivalent to six or four weeks' rent (six weeks' if you leave in the first half of your fixed term; four weeks' otherwise). That's the first problem with break fees: they are too high. So high, in fact, that they really act like a fine or penalty for ending your agreement, and if they weren't expressly sanctioned by the Residential Tenancies Act, they'd be unlawful.

If it were lower – say three weeks' rent – a break fee might usefully replace the conventional way of settling liabilities where a tenancy is ending early. The conventional settlement is:
  • the tenant is liable to compensate the landlord for loss of rent, potentially to the end of the fixed term – BUT;
  • the tenant is not liable for any loss that could have been avoided by the landlord taking reasonable steps (ie 'mitigation of loss') – so if the landlord could have gotten a new tenant in and paying rent after a few weeks, but has failed to do so, the tenant is not liable to pay – BUT;
  • the tenant is liable to compensate the landlord for losses incurred in taking those reasonable steps (ie advertising costs, the agent's letting fee, etc).
This means you cannot be certain how much it will cost you to move out early, and that you'll want to watch the agent like a hawk to make sure they're taking those reasonable steps. A simpler and more certain settlement of liabilities would be good, but – and this is the second problem with the current provisions on break fees – break fees don't always replace the conventional settlement. Under the Act, landlords and agents get to choose which one they'll use (that is, the Act allows for break fees as an optional additional term).

And you can expect that they'll choose the one that will cost you more: so, if the property is in an area of high demand and will be relet in a flash, expect a break fee; if it's a slower market, expect the conventional settlement.

Or maybe not... perhaps your landlord or agent will wrongly draft an agreement that provides for both, for something else. We've heard of agents demanding 'break fees' on top of compensation for loss of rent, advertising costs and letting fees – the amount of the fees ranging from one week's to six weeks' rent. Some agents have agreements that provide for one or the other, but are crossing out half of the additional term, so that it reads that the tenant is liable to pay a break fee, but not what the fee is, leaving the tenant mystified as to their liability and what the agent thinks they are doing.

This problem comes mostly from the ignorance and cupidity of some agents, but the break fee provisions should also carry some of the blame, because they have not set out a sufficiently clear and binding reform.  

The present provisions should be scrapped. The Parliament should provide for a three-week break fee for all circumstances; if it won't do that, then just stick with the conventional settlement in all circumstances.

    Minggu, 25 November 2012

    A bit of perspective with the International Union of Tenants (part 3)

    You'll recall that earlier in November we met with the General Secretary of the IUT, Mr Magnus Hammar, and heard him speak about how our rental system in Australia compares with various markets across Europe.

    Magnus Hammar

    It was pretty interesting stuff. As it happens, the Australian approach to home is not universally applied, but tensions between folks who profit from property and folks who live there crop up no matter where you look.

    Here's a brief rundown of Magnus' key points:

    First, to the numbers. More residents of Central Europe rent their homes than anywhere else in the world.

    It's the Swiss (64%) and the Germans (57%) who lead the way. Australians (29%) are about half as likely to rent as residents of Switzerland or Germany.

    Our own rental market, as a percentage of total housing stock, aligns more closely with the USA (34%) and England (32%), and we're far more likely to rent than Europeans in the south-east.

    Our investment in social housing, as a percentage of total stock, is comparatively poor. It's interesting to note that Germany - one of the world's largest and strongest rental markets - relies fairly minimally on state funded housing.

    As you would expect, the percentage of tenancies is higher in Sydney than the Australian national average - a feature that is mirrored the world over. Interestingly, the New York rate completely dwarfs the USA rate generally. Perhaps this is why rent-regulation remains on the statute books in Albany, NY?

    All these figures raise an obvious question: what are the structural differences that make renting more common in European countries than in Australia?

    The answer is just as obvious: security of tenure.

    In many parts of Europe, long tenancies are expected. Tenancies cannot be ended without a good reason, and landlords must take steps to assist their displaced tenants in finding new, reasonably similar accommodation.

    In Australia, by contrast, we do not have strong security of tenure. Tenants can be asked to leave without a good reason. In this we are not alone in the world, but it can be considered uncommon from a global perspective.

    But the question still remains: which came first? Does a greater numbers of tenancies lead to stronger rights for tenants, or do stronger tenants' rights lead to confidence in renting, resulting in a greater numbers of tenancies?

    Whatever the answer, a strong and well supported rental market is not a bad thing. It's not only good for tenants and their rights - it makes for economic stability in times of uncertainty as well.

    See if you can spot the Global Financial Crisis on the graph below.


    Rabu, 21 November 2012

    Hundreds to lose homes if Govt repeals 1948 Act

    The NSW State Government proposes to repeal the Landlord and Tenant (Amendment) Act 1948 – known around here as the 1948 Act.

    If it does, upwards of 600 persons – mostly aged pensioners – will lose their homes of many years.

    (Rod Spearer, 1948 Act tenant, in his Newtown bedsit.)

    The 1948 Act controls rent increases and evictions for so-called 'protected tenancies'. No new protected tenancies have been created for more than 25 years (and no more can be created). Between 600-1400 protected tenancies – all more than 25 years old, some much older – remain in existence, according to the estimate of the Older Persons Tenants Service.

    Generally speaking, properties covered by the 1948 Act become 'decontrolled' only when the tenant moves out or dies. As a result, controlled properties trade at a discount. Repeal the 1948 Act, and the owners stand to gain a windfall.

    Repeal the Act, and all of those tenancies will be terminated, and hundreds of elderly tenants, of limited means, will face homelessness. 

    *

    A disturbing prospect. So is the process by which the proposed repeal is made.

    The proposal is part of a review by NSW Fair Trading of 'red tape'. It's one of a miscellany of issues, including regulations on upfront gym fees and the Warehousemen's Liens Act 1935. In its discussion paper, NSW Fair Trading states of the 1948 Act:


    It is unknown whether any protected tenancies still exist in NSW.

    This is wrong – and Fair Trading should know it. We wrote to them about OPTS's 600-1400 estimate last October. OPTS dealt with 28 known protected tenancies in its casework in the year to June 2012. Your correspondent spoke to a tenant under the 1948 Act on the phone the other day. The Herald has too. Fair Trading's wrong statement misinforms and potentially misleads the public discussion of the proposed change.

    And the 1948 Act isn't 'red tape'. Everyone affected by it – tenants and landlords – made their arrangements long ago. These arrangements shouldn't be changed by repeal of the Act now, when tenants are in their old age.

    Senin, 19 November 2012

    Sick of over-regulation (part 2): restrictions against additional kids and other occupants

    We've always said that the prohibition on keeping a pet without the landlord's consent is the most bothersome term commonly seen in tenancy agreements (even more so than the term requiring you to inform your landlord of any infectious disease you might contract).

    But there's another contender: the term that sets the maximum number of persons who may live at the premises. 

    Fair enough that landlords don't want their premises being let in lodgings to sundry others and becoming overcrowded. But the term for a maximum number of residents is misused, and unreasonably restricts tenants when they're making personal decisions about their households.

    First, most landlords and agents set the maximum at the same number of persons in your application for the tenancy – without regard to the size of the premises, and without regard to whether a household might reasonably grow. There's nothing in the Residential Tenancies Act 2010 that says the maximum number must be reasonable, and nothing that allows a tenant to get an unreasonable restrictive maximum varied.

    If a tenant wants it varied – say, to accommodate an additional child – they must ask the landlord's consent.




    We're aware of a case where a couple wanted to foster two kids. They asked the landlord – because they were two persons in a five-bedroom house, and the maximum number of occupants allowed was – yes you guessed it – two. The landlord refused consent.

    And if a tenant goes forth and multiplies without their landlord's consent, the landlord can serve a termination notice, and go to the Tribunal for a termination order, on the grounds that the tenant is in breach.

    We're aware of a case where a tenant (initially with two kids, in a three-bedroom house: maximum three occupants allowed) came to an arrangement with her ex-partner for shared care of her third child, a kid with a disability – both stayed a few nights each week. During an inspection the landlord was disconcerted to discover the third child, and a bed made up in the lounge room (the tenant asks: 'do you expect me to share a bed with my ex-partner?'). The landlord gave a termination notice and applied to the Tribunal, where the tenant – humiliated – was questioned as to who she has to visit her and for how long.

    In the end the Tribunal declined to terminate the tenancy, and said it was okay for the ex-partner and the additional child to be at the premises – provided it was temporary. It then made a specific performance order that the tenant not allow persons in excess of the maximum to live at the premises.

    Most landlords aren't interested in interposing in tenants' private, personal household arrangements – but where it happens, it is grossly offensive. Our position is:
    • let landlords have their term for a maximum number of residents – provided the number is reasonable, considering the size of the premises and number of bedrooms; and
    • let tenants go to the Tribunal for an order varying the maximum number if it is unreasonable, or if it restricts a child from joining the tenant's household.

    Update on Boarding Houses Act 2012

    The new Boarding Houses Act 2012, which was passed by the NSW State Parliament in October, has yet to commence.

    Our latest advice from the State Government is that it will commence in stages: first, the provisions about the Boarding Houses Register in January 2013; then the rest of the Act sometime after that.



    In our view, there's no technical reason why the provisions about occupancy agreements couldn't commence sooner rather than later. We're taking this up with the State Government.

    Rabu, 14 November 2012

    Strata redevelopment proposals expose flaws in the housing system

    New South Wales' first strata title schemes are now more than 50 years old; there are also plenty of even older buildings that have been subdivided into strata units over the years. With age these buildings have sustained a bit of wear and tear (some residents may feel the same about themselves!). But many are desirably-located, in inner and middle Sydney.

    Developers have had their eyes on them for some time, but their designs are often frustrated by the necessity of getting every single owner to agree to sell up and terminate the scheme. Now the NSW State Government is having a look at them too.


    In its current review of strata title law, NSW Fair Trading is considering changing the law about terminating strata schemes, in order to facilitate 'urban renewal'. Suggested changes include removing the requirement of a unanimous decision by owners to terminate – instead a majority would do, with some owners having to sell up against their wishes. Fair Trading is asking for feedback on what size of majority is appropriate, and whether there should be a process for owners to collectively sell their units or participate in the redevelopment.

    We think that before it goes any further in considering these details, the NSW State Government should first consider the wider housing implications of such changes. We're worried that without the State Government also committing to a stronger affordable housing policy and additional investment in social housing, these changes may result in thousands of households losing relatively affordable and – in the case of owner-occupiers – secure housing.

    We have identified two groups of people who we believe would be particularly vulnerable. 

    The first are older, lower-income owner-occupiers. From our analysis of data from the 2011 Census, we calculate that there are about 29 000 older, lower-income owner-occupiers (aged 60+, income less than $60K, no mortgages) living in strata schemes in the inner and middle rings of Sydney. Of this group, two-thirds (66 per cent) have incomes of less than $600 per week.

    These residents may have lived in their strata schemes for many years, and have deep links to the local area. They may also have no assets other than their strata unit and, if they were forced to sell their unit because of the termination of their scheme, they may not be able to afford to buy again in the same area. This is a real possibility, especially if the market for units in the scheme is limited (because the scheme is run-down, and there are insufficient funds for repairs, there may be few or no prospective purchasers other than developers). 

    In the event of the termination of their schemes, these older, lower-income owner-occupiers may be faced with choosing between buying again out of their area, or renting locally. Buying and moving may mean losing their social and cultural links and connections to local services, such as medical assistance. Renting would mean at least some time spent in the private rental market, which offers very little security of tenure. These persons could apply for social housing, but may be ineligible because of the income and/or assets criteria; even if eligible, waiting times for most types of social housing dwellings in the inner and middle rings of Sydney are between five and 10 years, or more than 10 years.  

    For a group that has enjoyed low housing costs and high security, and expected to continue to do so in their old age, these may appear to be a very unsatisfactory set of housing options indeed.

    The second group are older, lower-income private tenants. From the 2011 Census data, we calculate that there are about 14 000 older lower-income private tenants(aged 60+, income less than $60K) in strata schemes in the inner and middle rings of Sydney. Of this group, almost 5 000 live alone, and of these, about two thirds (66 per cent) have incomes of less than $600 per week.

    Unlike owner-occupiers, these residents do not enjoy secure tenure, and the available Census data do not disclose the affordability of their housing. We acknowledge that the supply of rental accommodation in inner and middle Sydney would probably – eventually – be increased as a result of the redevelopment of older strata schemes. Nonetheless, we are concerned that when a strata scheme is terminated, these residents would face an unsatisfactory set of housing options like those faced by older, lower-income owner-occupiers. It is likely that they would not be able to rent affordably in the local area, whether during the redevelopment, or afterwards when the redevelopment of their particular scheme is complete – as the new premises will almost certainly rent for substantially more than those in the old scheme, and these renters have little prospect of increasing their incomes. They would therefore have to move away, or try to rent unaffordably locally while waiting for social housing. 

    These vulnerable groups of strata residents – and other residents who may be adversely affected by urban renewal – need more than legislated safeguards in a reformed strata scheme termination process. They need a better set of housing options – better than those presented by our current planning and social housing systems and tenancy laws.  

    The planning system makes provision for the development of affordable rental housing, but its approach is mostly permissive and voluntary (per the Affordable Rental Housing SEPP, and some voluntary planning agreements); there is legislative provision for a mandatory approach (under s 94F of the Environmental Planning and Assessment Act 1979 (NSW)), but the State Government has restricted this approach very narrowly to only a handful of sites in Sydney. The whole of the planning system is now under review by the State Government; it has flagged that there will be a high-level ‘Housing Supply and Affordability Planning Policy’, but there is no indication yet that it will strengthen the mandatory provision of affordable housing – or even its permissive, voluntary provision. 

    The social housing system is stuck in a state of no net growth, and has been for more than a decade. Given that the population is growing, no net growth means the social housing system is declining relatively. As indicated by the waiting times above, the social housing system is no longer directed to serving people who simply need affordable housing: in most cases, an applicant must experience a crisis before they are served.  Most social housing allocations (70 per cent) are now made on a priority basis, rather than a wait-turn basis (30 per cent); five years ago, those proportions were reversed (download Shelter NSW's NSW Housing Factsheet for these figures and more).
      

    Our tenancy laws enshrine insecurity by failing to give even the modest assurance that a tenancy may be terminated on reasonable grounds only. Landlords continue to be allowed to give termination notices without grounds and, under provisions that commenced with the Residential Tenancies Act 2010, there is now no discretion for the Consumer, Trader and Tenancy Tribunal to decline to order termination on the basis of a no-grounds notice. This is an injustice to the tenant receiving the notice, and makes tenants as a class needlessly insecure in their homes.

    The urban renewal contemplated in NSW Fair Trading's strata review may expose thousands of people to these flaws in our housing system, and place the flawed system under further stress. We're asking that the NSW State Government  review the housing implications of proposals to facilitate urban renewal, including those relating to strata scheme terminations, with input from all interested State Government agencies, non-government organisations and members of the public, with the objective that all persons who are unhoused by urban renewal should have access to affordable, secure alternative housing in the location of their choice.

    Senin, 12 November 2012

    Renting with pets in Sydney: survey

    If you're a pet-owner who rents in Sydney (or have done in the past 10 years), researchers at the University of Western Sydney would like to hear from you.

    The Renting with Pets in Sydney survey aims to create a greater understanding of how the rental market works – or doesn't work – for pet owners.

    Complete the survey online at http://www.uws.edu.au/rentingwithpets.



    The researchers will also be conducting interviews with pet-owners who rent. To participate, contact the researchers through the Renting with Pets in Sydney survey page.

    We look forward to the reading the researchers' report. The Tenants' Union's recent submission to the Companion Animals Taskforce about pet-owning in rental housing can be found here.

    Minggu, 11 November 2012

    A bit of perspective with the International Union of Tenants (part 2)

    As we discussed last week, the Secretary-General of the International Union of Tenants, Magnus Hammar, has been in town to talk with tenants and workers – part of the IUT's role in keeping up the international exchange of ideas and intelligence about renting.

    Magnus's work for the IUT is sponsored by the Swedish Union of Tenants, and we were especially interested to hear about how our Swedish counterparts operate. In some ways it's the same – and in some ways it's very different.

    (KNISLINGE sofa, in KUNGSVIK brown)

    Like the Tenants' Union of NSW and the Tenants Advice and Advocacy Services, the Swedish Union of Tenants provides tenants with legal information about their rights and obligations, and works on policy and law reform to advance tenants' interests. 
    Unlike us, the Swedish Union of Tenants is that country's largest non-government organisation, with over half a million members – almost half of all households who rent are paid up. 
    Also unlike us, it has over 700 employees – after all, they need this many workers when it comes to collectively negotiating rents with Sweden's municipal housing companies and landlord organisations.
    Membership costs about 70 Swedish krona – about A$10 – per month. For that you get access to the Union's legal information and collective rent bargaining services, as well as discounts on a range of services from affiliated companies – for example, at the moment you can get 50 per cent off Fl├╝gger paints (all sizes and colours), and 20 per cent off Fiona wallpaper!

    (Pause, gentle reader, and reflect on what would happen if the Tenants' Union of NSW were to offer tenants discounts on purchases of housepaint.)

    The business of providing tenants advice and advocacy services in New South Wales is a much more marginal enterprise. Here the Tenants Advice and Advocacy Program pays the wages of about 100 workers at Tenants Advice and Advocacy Services throughout the State and at the TU, at a cost of three cents per day (or 90 cents per month) for each renter household. The money comes from interest earned on tenants' money (in the form of bonds lodged with Renting Services, and payments in agents' statutory accounts) – but it is just a fraction of the interest, with much larger slices going to the Department of Finance and Services and the Consumer Trader and Tenancy Tribunal. 
    You don't have to pay to use a Tenants Advice and Advocacy Service (because most tenants pay a bond, you've already paid) and you don't have to join the Tenants' Union (but if you want to, we'd love you to join). 
    What we do ask is this: if you've benefited from the work of a TAAS, tell your State MP about it. 
    Maybe you've received phone information or advice from a TAAS, or had a TAAS advocate advocate for you at the Tribunal, or read a Tenants Rights factsheet, or read a TU submission that spoke for your interests. 
    Let your MP know that you value the service, and that you want more of your bond interest to go to expanding the service.  

    And tell us, too, about how a TAAS has helped you. We'll keep making the case for more services for tenants, and better tenancy laws, and working for the day when a tenant doesn't have to move to Sweden to pay a decent rent and do a little decorating.

    Kamis, 08 November 2012

    A bit of perspective with the International Union of Tenants (part 1)

    Yesterday we had the pleasure of hosting Mr Magnus Hammar, General Secretary of the International Union of Tenants, for a day in Sydney. Mr Hammar is touring the east coast of Australia following his address to the 7th National Housing Congress in Brisbane last week.

    We started the day with a drive out to Rosemeadow/Ambarvale and Claymore, where we met and talked with local tenants, and caught up with staff of the South Western Tenants Advice and Advocacy Service.


    Residents of Rosemeadow/Ambarvale spoke of their resolve in the face of redevelopment, and the relocations that they felt forced into by their landlord - Housing NSW. Their stories gave us a stark reminder that restrictions on eligibility for social housing, combined with limits on the availability of appropriate housing for people with mental illness or disability, can lead to dysfunction and despair within the neighbourhood. Sometimes this system fails just about everybody - and it's no wonder that long-established tenants express reservations when told they must move away from all that they know and love.


    Residents of Claymore told a slightly different story, borne of a different set of circumstances. For these tenants, redevelopment and relocation remain an unrealised threat to the community that has been their home for 30 years or more. Some homes have already been demolished, but the funds required to rebuild those places have not yet materialised. Many doubt they will ever see the brand new houses that have been promised, and in the meantime the uncertainty sees their local infrastructure continue to deteriorate. But these tenants know that no matter what conditions are like on the outside, their community comes from what's inside their homes and gardens, across the many winding streets of their town.

    We then traveled back into town for a look at some of the heritage listed public housing buildings in Millers Point, many of which face the continued threat of sale by the NSW Government ...


    ... and the iconic Sirius Building on Cumberland Street, The Rocks: built to replace stock that was demolished in the 1970's, before green bans were imposed and the wholesale redevelopment of this historic area was stalled ...


    But then it was time to let Magnus do some of the talking. We stopped in at the Customs House Library to hear some of Mr Hammar's perspectives of how rental housing in Australia compares to housing markets in Europe.


    It was interesting and informative stuff. We'll leave you for now with a few of the slides from Mr Hammar's presentation, for a bit of an impression of where Australia fits into the global picture. We'll return with more details on this international perspective in a later post.

    But first - we must express our heartfelt thanks to the tenants of Rosemeadow/Ambervale and Claymore for having us over, and to Mr Hammar for sharing some of his time in Australia with us.

    *** 








    Selasa, 06 November 2012

    Sick of over-regulation (part 1)

    Do you rent? Ever had a cold, flu or other bug?

    If yes, did you notify your landlord? Because it's probably a term of your tenancy agreement that you do.



    Up the back of the standard form of residential tenancy agreement published by the Real Estate Institute of NSW – and used widely by agents and landlords throughout the State – there's an additional term under which you're obliged

    47.8... To notify the landlord promptly of any infectious disease....

    We're yet to hear of any actual cases of landlords asserting their contractual right to know about tenants' lurgies or other ailments. But the infectious diseases term is a symptom of the bothersome, burdensome overegulation of tenants, by their landlords.

    In our view, probably the most bothersome common additional term is one we've discussed previously: the term against pets (and you can see our recent submission of this point to the NSW Companion Animals Taskforce, here). We object to this additional term because it bars many tenants from one of life's simple pleasures and from making decisions that responsible adults should be free to make for themselves. And in terms of legal liability, it is entirely unnecessary: under the prescribed terms of every tenancy agreement, the tenant is liable for any damage they intentionally or negligently cause or permit – whether that's damage done by an occupant with two legs or four.

    It should be said: the additional term about pets comes courtesy of NSW Fair Trading, which included it in the standard form of agreement under the Residential Tenancies Regulation 2010. Otherwise, most additional terms come from the version of the standard form published by the REI, or are cooked up by individual agents and landlords.

    We've seen some shockers. We've seen additional terms that purport to prohibit tenants from having sex at the premises, from drinking alcohol, and from even possessing (never mind playing!) a musical instrument. We've seen additional terms that purport to reserve for the landlord the right to inspect the tenant's furniture and refuse to allow it inside if it doesn't suit.

    And then, less extreme, there's the dreary lists of everyday proscriptions: no blu tack, no posters, picture hooks, no nails, no screws, no smoking, no clothes drying on balconies, no clothes drying inside, etc, etc.

    Our practical advice about bothersome additional terms is this. First, there are some additional terms that the Act expressly prohibits (section 19). The prohibited terms are:
    (a)  that the tenant must have the carpet professionally cleaned, or pay the cost of such cleaning, at the end of the tenancy,
    (b)  that the tenant must take out a specified, or any, form of insurance,
    (c)  exempting the landlord from liability for any act or omission by the landlord, the landlord’s agent or any person acting on behalf of the landlord or landlord’s agent,
    (d)  that, if the tenant breaches the agreement, the tenant is liable to pay all or any part of the remaining rent under the agreement, increased rent, a penalty or liquidated damages,
    (e)  that, if the tenant does not breach the agreement, the rent is or may be reduced or the tenant is to be or may be paid a rebate of rent or other benefit.
    And clause 5 of the Residential Tenancies Regulation 2010 adds another prohibited term to the list:

    A residential tenancy agreement must not contain a term having the effect that the tenant must use the services of a specified person or businessto carry out any of the tenant’s obligations under the agreement.

    Note that there's a big qualification on the prohibition of the 'carpet cleaning term' at section 19(a). Section 19(3) provides that such a term is allowed 'if the landlord permits the tenant to keep an animal on the residential premises.'

    Apart from that, prohibited additional terms are void and unenforceable, and it's an offence for your landlord or their agent to put them in (maximum penalty: $2200).

    Second, even if an additional term is not on the prohibited list, there will be a question about its validity. The Act allows additional terms, but only if they are consistent with the prescribed terms, and inconsistent terms are void to the extent of their inconsistency (section 21). (To be precise, the Act does allow contracting out of certain prescribed terms in the case of tenancy agreements for a fixed term of 20 years or more – and we have never seen such a long fixed term.)

    Easily offended prescribed terms include the term protecting your reasonable peace, comfort and privacy (section 50(2) – so we wonder if the infectious diseases term might be void, at least to some extent) and the term obliging you to keep the premises reasonably clean (section 51(2)(a) – so no additional terms are allowed that impose a heavier obligation than keeping the place 'reasonably clean').

    That's the practical advice, but at a deeper level, there's the question of why so many landlords and agents – who would no doubt otherwise call themselves as the sworn-enemies of 'over-regulation' and 'red-tape' – would engage in such bothersome, burdensome, boring over-regulation of tenants.

    Speaking generally, our impression is that the longer the list of additional terms, the less the landlord or agent actually knows what they're doing, and the less well they're actually managing the property and the tenancy. They micro-manage, instead of effectively manage.

    Where the ineffective, micro-managing landlord freaks out about blu tack and picture hooks, the effective landlord plans and budgets to repaint the premises after so many years – and is more likely to have longer tenancies, and shorter vacancies.

    Where the ineffective, micro-managing landlord presumes, by virtue of their status – and not any actual  expertise – to know more than their tenant about how to run the tenant's household, the effective landlord knows that a good tenant is like quicksilver, or even love: clutch it and it darts away, but open your hand and it will stay.

    Private rental housing is a $28 billion per year industry run mostly by amateurs. Most engage agents to manage tenancies on their behalf. Agents could do landlords and tenants alike a power of good by ruling out bothersome, burdensome over-regulation in tenancy agreements.  

    [UPDATE: thinking of having your partner move in? Having a baby? Better check with your landlord about that too – see part 2.]

    Kamis, 01 November 2012

    The value of TAAS

    "Okay, thanks, that would be a great help… I'll wait to hear from you I guess. Goodbye".

    Esmerelda put down the phone and walked back to the car. Now that she'd made the call, she could get ready to pick the kids up from school. But her mind kept returning to that all consuming question: where were they going to sleep that night?



    For the past three months they'd been in and out of spare bedrooms, garages, caravan parks and motels. When the money ran out each fortnight, as it always did, she'd find them a quiet spot and they'd all curl up together in the car.

    She'd all but given up looking for somewhere to rent. She was sick of all the knock-backs. It didn't seem to matter where she went - as soon as she gave out her name and details, all doors seemed to close. Esmerelda knew why - she'd been blacklisted by the last place she'd rented through. She knew this, because they sent her a letter telling her they were going to do it, just before she moved out.

    She didn't think she could do anything about it. After all, she owed them all that money…

    But it turned out that call she'd made was a good one.

    The woman on the advice line asked her read out that letter from the real estate agent. Once she'd heard what it said, she told Esmerelda that they shouldn't have listed her in the way that they did. She'd still have to sort out whatever money that she owed, but the woman said that if she wanted them to they could write to the agent on her behalf, and point out that the listing was unlawful. They could ask for Esmerelda's name to be taken off the blacklist. Esmerelda agreed.

    A couple of days later, Esmerelda received good news. The agent had contacted the woman from the advice line, and agreed to have the listing removed. She'd also sent through details of the money she owed, so that Esmerelda could start to work out a plan to pay off the debt in instalments. She'd said that as long as they could agree on a payment plan, and Esmerelda stuck to it, she would not put Esmerelda's name back on the blacklist.

    "I don't know…" said Esmerelda. "I'm not sure they'll accept a plan that I'll actually be able to afford".

    "Well," said the woman on the other end of the phone, "what if we talk to them again, and let them know just how much you can manage?".

    ***

    Esmerelda is a fictional character, but her story is quite real. It was sent to us by the Central Coast Tenants' Advice and Advocacy Service - CCTAAS for short - not very long ago. It is a story that demonstrates the enormous value of Tenants Advice and Advocacy Services.

    The value of TAAS is something we've talked about quite a bit over the last couple of months, as we struggle to meet the growing demand for our services. TAAS, as it is currently funded, costs each renter household in New South Wales just three cents a day. Those three cents are your three cents, because they are taken from the interest earned on your bond money, after it has been invested by the Rental Bond Board.

    Your three cents a day are given to us, so that we may continue to help tenants keep themselves out of trouble. Or, help people who would really like to be tenants, but can't, due to a past, unresolved tenancy dispute. People like our Esmerelda.

    Tenants Advice and Advocacy Services take thousands of calls each year, from all over New South Wales, and demand for our services is growing. Each and every one of those calls is a tenant's story.

    Over the coming months, we'll be sharing some of these stories… and we'll be asking you to share yours, too. If you've ever used Tenants Advice and Advocacy Services - perhaps as a tenant looking for advice, a social worker making a referral, a tenancy manager observing the difference a good advocate can make for you tenant - and you'd like to join in this conversation, there are a couple of ways you can:

    1 - Share this blog post on Facebook, or Twitter. We'll be using the hashtag #my3cents.

    2 - Leave a comment on this blog, or on our Facebook page (it's also called 'The Brown Couch').

    3 - Send us an email: tenants[at]tenantsunion.org.au

    We look forward to hearing from you.