Thursday, October 27, 2016

The Australian Dream

The following is taken from Dr Robert Mowbray's remarks when launching Professor Alan Morris’s book on Tuesday, 25th October 2016. Robert is the Project Officer, Older Tenants with the Tenants’ Union of NSW.
Professor Alan Morris with his new book - The Australian Dream
It’s good social research ...
In Alan Morris’s Preface he quotes Professor George Ritzer (Explorations in the Sociology of Consumption: Fast Foods, Credit Cards and Casinos, 2001) who said (and I paraphrase):
There is a great need for sociologists to do work that can be read by a more general audience. Sociology should be interesting and relevant ... and should inform public dialogues on a wide range of important issues.
This quote reminded me of what two prominent Australian sociologists, Colin Bell and Sol Encel (Inside the Whale, 1978) said nearly forty years ago:
Social research should be linked with the public issues of the wider world. It cannot be value-neutral. Good social research reflects social and political concerns first and techniques later, if at all.
Alan’s book is, firstly, very readable because it lets those struggling in the housing market tell their own stories ... and secondly, it meets Bell and Encel’s criterion of ‘good social research’ because it reflects social and political concerns foremost.

Recent publicity about older renters ...
Over the last month the plight of older renters has been highlighted in both newspaper and magazines. Some examples:
27 October 2016: Peter Martin writes 'We are condemning more and more Australians to retirements burdened by rent'. He continues: ‘One of the barely stated reasons why house prices have been climbing out of reach of new buyers is many of us have been becoming richer. Would-be investors poured into the market. One in every six taxpayers became a landlord. To get there and stay there they've had to outbid would-be residents.'
10,11 October 2016: Kirsten Robb writes 'Life-long renters face financial stress in retirement'... according to a paper released on Monday by Swinburne University, which found more Australians are renting in retirement and facing financial stress. The authors of this report, Dr Andrea Sharam and others, found: 'The proportion of aged persons in Australia is set to increase significantly, posing many challenges. Amongst these is the growing number of households who lack housing security in retirement. ... A very marked outcome is that to be a private renter at 45 years of age is likely to mean being a renter and highly impoverished, in retirement.’ 
4 October 2016: A great essay by Anwen Crawford who writes about 'Nowhere to go – older women and housing vulnerability': 'The number of older women who are rental tenants in Australia is growing, and these women ... are increasingly vulnerable to poverty and homelessness ... Housing affordability and security for rental tenants will only become a more pressing issue as Australia’s population continues to age.'
4 October 2016: An excellent article by Kim Arlington, entitled 'Over-55s are the forgotten homeless': In this article Ms Yeoman, Chief Executive of Mission Australia said: 'older women can face a housing crisis for the first time in later life ... previously they may have had a stable housing history but even small changes in their financial circumstances – a rise in rent or utility bills or unexpected health costs – could propel them into homelessness.'
So Alan Morris’s book is well timed ...
Quote from Elsie, private market tenant:
‘... I think when people get to 65 and they’re on a Centrelink pension and in private rental, they should be entitled to take their life if they wish ...’
Quote from Rhonda, private market tenant:
‘I hate it because you’re more or less at someone else’s mercy all the time.’
Quote from Dan, public housing tenant:
‘When you know your accommodation is right, this is especially when you’re older, you can pursue other interests. You’re more relaxed ... you’re in for a longer life.’
Quote from Marlene, home owner:
‘It [home ownership] just gives you security ... It gives you freedom of expression ... Your home is an extension of your personality.'
Alan documents how, over the last two decades, the private rental sector across Australia has once more become substantial. It presently accommodates about one in four households. A major shift is that, for many households, renting in this sector is no longer a transitional stage. And the proportion of the population aged 65 years and older, like all developed economies, has increased significantly and is continuing to do so. Many will be become trapped in the private rental sector. Indeed, for a number of reasons, many will ‘fall out’ of home-ownership. Alan’s premise is that the capacities of Australians who are dependent primarily or solely on the Age Pension for their income are shaped fundamentally by their housing tenure. He places the 'meat on the bones', with real people telling their stories.

Alan conducted 125 interviews and highlights that many of the older private renters in his study were battling to purchase everyday necessities. They fare very poorly and, indeed, they are the new face of poverty in this country.

Alan’s book is divided into chapters that, by tenure, examine the cost and standard of accommodation, consumption and living a decent life, social ties, leisure, health including dental care and pharmacist costs ... and so on.

Alan found that, for older private market renters, the cost of their accommodation and negligible security of occupancy were primary concerns ... and this fundamentally shaped their everyday lives and dispositions. For most of the private renters, the cost of their housing was a considerable burden and provoked a great deal of stress. Indeed, this contrasts to almost all of the social housing tenants who felt that their rent was reasonable and manageable and that it left them enough disposable income to live a decent, albeit frugal life. But many of the older private market renters were in a dire situation due to the high cost of their accommodation. Many were having to use more than half of their income to pay for their accommodation. The high cost of their accommodation restricted their consumption and made it difficult for them to lead a decent life. Alan concludes that extreme frugality and self-deprivation were central features of many older private market renters’ lives.

He found that many private market renters were not able to buy fruit, fish and meat regularly and were dependent on unhealthy processed food. Also, any unexpected expense was a major blow and precipitator of anxiety. And, so medical expenses were seen as a serious burden by a substantial proportion of older private market renters and it was evident that there was a tendency to avoid health services.

Alan found that mental health was a major issue, with most of the private market renters reporting that they lived in fear of being asked to vacate or being subject to an untenable rent increase. There is a constant fear and much trepidation. As a consequence, everyday life is often enormously stressful. He says minimal security of occupancy, financial stress, inadequate accommodation and inappropriate neighbourhoods contributed to many of the older private renters being plagued by these high levels of stress. This contrast to homeowners and social housing tenants.
It’s the same story on all accounts. Home owners and public housing tenants on the Age Pension fair well, but private rental market tenants on the Age Pension struggle. (The noticeable exception here is public housing tenants in Millers Point, Sydney, who are being forced to relocate.) Except for those who receive support from family members, older private renters are very much an abandoned lot!
A digression ...
Here I would like to reflect on one of the three key pillars of the NSW Government’s ‘Future Directions in Social Housing in NSW’ strategy. It talks of ‘providing more opportunities, support and incentives to household to avoid and/or leave social housing.’ It talks of a system where, in the future, 'housing assistance is seen as a pathway to independence' and, to do this, placing increased reliance on private rental assistance.

This is placing an enormous degree of faith in the private rental market. But hold on!

Firstly, from The Sun-Herald (23 October 2016) comes the story of Ankita who is forced to show savings of a year's rent in advance before her application for a tenancy is even considered. Those interviewed by Alan provide graphic accounts of the type of accommodation they have been forced to rely upon in the private rental sector … and this is the private rental market on which Future Directions relies as an alternative to expanding social housing.

Secondly, Family and Community Services’ website states that Future Directions is backed by the whole of Government – including Health, Education, Justice, Planning and Environment, Industry ... but there is no mention Fair Trading! Indeed, Fair Trading has been reviewing the very legislation that can provide all tenants with greater security of tenure, for example, by repealing ’no-grounds’ eviction provisions. The omission of a reference to Fair Trading on this website page suggests that one arm of government was not speaking to another arm of government when Future Directions was being formulated!

Further, the Federal government is a key player here. Private renting will only be a reasonable long term option when our taxation regime discourages speculation in housing by ‘mum-and-dad’ investors and encourages institutional investors. Such a change is loudly rejected by the Federal Government. Discouraging speculation is picked up in a recent editorial in The Sydney Morning Herald (25 October 2016) which reads:
Mr Morrison says the objective of his approach "is to have policies that mitigate the artificial inflation of asset prices". That artificial inflation derives from negative gearing and the CGT discount.
And again, in recent days, Lucy Turnbull, Chief Commissioner of the Greater Sydney Commission, said greater institutional investment in housing, alongside stronger legal protections for tenants, could help to make renting a more attractive option.

Alan Morris’s book is an indictment of our political masters’ failure to acknowledge the changes necessary to make private renting a more attractive option ... along with years of neglect of public housing.

Alan Morris’ skills assist public housing tenants ...

And, of course, after Alan forwarded his manuscript to the publisher, he used the same skills in pulling together Shelter NSW’s Brief entitled ‘A contemporary forced urban removal: The displacement of public housing residents from Millers Point, Dawes Point and the Sirius Building by the New South Wales Government’. The power of this document is that, again, the residents tell the story.

Let’s launch Alan Morris’s book ...
Firstly, let me acquaint you with two little known facts about Alan. He is a serial letter writer to The Sydney Morning Herald, with another letter on 25 October 2016, the day of his book launch, where he writes: ‘Social housing as a viable option for low-income households needs to be revived’.

Also, he is a veteran of forced urban removal, having worked alongside of the victims of such in Apartheid South Africa. Back in 1986 The New York Times described Alan as ‘a white activist from the Transvaal Rural Action Committee, a group that monitors forced removals.’

Alan Morris’s book is more than a contribution to the current housing debate:
  • It is an affirmation that past government housing policies regarding home ownership and public housing have led to satisfied outcomes for older persons on low incomes. 
  • It is a warning ... indeed a dire warning ... to present and future governments that a weakening of security of tenure in social housing (including any re-run of what has occurred in Millers Point over the last two and a half years) and a reliance on the private rental sector as it is currently constituted will led to immense hardship for older persons on low incomes in future years.
Congratulations to Alan Morris for such an easy to read and compelling publication and a big thank-you to the 125 people who shared their experiences with all of us.

You may read a review of Alan Morris’s book in the Huffington Post on 5 October 2016 and some media around the book launch here.

Wednesday, October 26, 2016

Save your money, don't use BondSure

We've recently found out about BondSure, a new product for bond insurance, as well as bond loans and contents insurance. We do not think it is worth it for most tenants, unless you are exceptionally accident prone.
This guy. This guy needs insurance.
Let's consider the kind of insurance being offered. Your rental bond is already a form of insurance - the tenant pays a lump sum up front to ensure that if there is compensation due to the landlord at the end of the tenancy, the money is already there.

For most people insurance is about peace of mind – a protection against large, unexpected costs. This is exactly what your rental bond is!

It's not too different from paying insurance on a car, except that it is refunded at the end of the tenancy if you do not need to rely on it. And during the tenancy, it's held by the Rental Bond Board and there's the opportunity for your bond to be used for good.

So would you consider paying insurance on your insurance? It may sound a little odd, but that's the logic being offered by BondSure. Perhaps this reflects a view among landlords and agents that the bond is the tenants money in name only, and really it’s just waiting to go to its rightful home with the landlord. Is it a coincidence that BondSure is managed by former real estate agents?

So, how does this insurance on your insurance work?

Let's look at the insurance on a $2000 bond. The fees are $31.58 per month on a 12 month agreement, for a total of $378.96 for the year. You pay your fees, and if you need to make a claim, you pay your excess of $300 (Excess is 15% of bond or $200, whichever is higher). Coverage extends only to the bond amount, so the maximum claim you can make is your bond amount of $2000.

Now, because you have already paid the $378.96 in premiums, and $300 in excess, your insured $2000 bond effectively only gives you a benefit of $1321.04. The insurance does not cover anything above the bond, and it only covers "accidental damage". It does not cover many of the things that bonds often pay for, like rent arrears, utilities bills, or even most cleaning bills.

We know from the Rental Bond Board that the actual numbers of people losing their bonds are very low. Once you take out the stuff that BondSure doesn't cover, these numbers will be even lower.
Click for full size!
In the 2014-15 financial year, there were 266,856 bonds refunded. 53% of tenants received their bond back in full. If those tenants had held bond insurance, they'd have made a $378.96 bet and lost. This is where BondSure makes its money.

Another 38% received part of their bond back. Because of the excess of $300, the claim by the landlord has to be above $678.96 before it even makes sense to claim anything. If your landlord comes to you with a bill for damage of $150 dollars, you wouldn't spend $300 dollars to fight it, would you? So a large chunk of those tenants won't make the claim on the insurance, they'll just pay the landlord directly. So they'll have made a $378.96 bet and lost, on top of whatever "small" amount the landlord has claimed. This group end up paying both BondSure as well as their landlord, without actually obtaining any benefit.

If the claim on the bond is higher than $678.96, and only for accidental damage, then it becomes worth it for the tenant to have held their BondSure policy. They will start getting a payout that puts them ahead of where they would have been if they'd just saved their money. But that's assuming they've only been paying their premium for one year.

For those playing along, that leaves just 9% of tenants who lost their bond entirely in 2014-15. We know that many claims for the whole bond occur following breaches, such as rent arrears and the like, so only some would get the benefit of bond insurance. Those tenants often also owe more than the bond to the landlord, so they will still have costs above the payout.

If you are lucky(?) enough to be one of the small percent who had accidental damage that cost you exactly what your bond would cover (and nothing more!) then you get the full benefit of the insurance, and get your bond back. Happy days!

In considering all of this we haven’t included the cost of attending the Tribunal, which the BondSure system discourages tenants from using. If your landlord's claim is high enough the "rational" thing to do would be to accept it and take the BondSure payout, even if you know the claim is false or an overreach. Without bond insurance it is usually worth it for a tenant to dispute a bond claim because the Tribunal forces agents and landlords to provide evidence for their claim.

As with all insurance, this is basically a gamble. Only around 1 in 4 tenants will get some benefit from a BondSure insurance policy. Most won't, and this is why when you gamble the house always wins. The house here is BondSure, who get paid either way, and if they do pay out make a relatively small loss. Using the proportions above, if everyone had a $2000 bond covered by BondSure they would make an average of $131 per client. Tenants, on the other hand, would spend an average of $319 by taking out insurance on their insurance.

Save your money, don't use BondSure. If you really want to cover yourself for the unexpected loss of a rental bond, you'd be better of sticking $30 a month in an old jam jar.

Wednesday, October 19, 2016

Tell us what you really think, Belle

Thanks, Belle Property. This charming little reminder of how some real estate agents really view us tenants was dropped in our inbox this morning.

Clearly it’s supposed to be funny. Can you imagine your landlord finding it in their letter box and having a little chortle? How hilarious that it is so easy to remove someone from their home, like changing clothes. Perhaps they even hoped for some controversy! There’s no such thing as bad publicity, right?

Hey landlords, don’t like your tenants anymore? Did they ask for repairs, or question a rent increase? Maybe you just don’t like they way they look. No worries, just get your agent to give ‘em the flick. As non-property owners they’re vermin, barely human, certainly not worthy of a home. Its rare that such a dismissive attitude is so clearly drawn out.

What’s most frustrating about these kinds of attitudes prevailing in real estate agencies is that avoiding them is easier said than done. When you’re looking down another 30 applications, eviction day is coming up fast and at least this place doesn’t have obvious mould problems, knowing your property manager thinks your vermin doesn’t rate as highly.

The thing is though property managers need tenants. Sales agents don’t, except to use our furniture to make a place look homely. But a property manager without tenants is like a mouse without cheese, scrounging around looking for some other way to make a living. We might be vermin to you, but we pay your wages.

UPDATE 20/11/2016. Belle Property has responded to this post with the following message.
"We apologise if any offense was taken as a result of these Property Management flyers, it was never the intention. We in no way believe tenants are comparable to vermin and we apologise that it has been interpreted in this way. It was intended as a fun light-hearted message, which evidently wasn’t achieved. We are happy to discuss this further offline if there are any further queries. We will cease to use this marketing material effective immediately."

Also posted as a Facebook note here on our Facebook page. Like us for all the latest from the TU!

Monday, October 17, 2016

Celebrating Anti-Poverty week with smashed avocado on toast

Welcome to Anti-Poverty Week 2016. Everyone is encouraged to help reduce poverty and hardship by organising or taking part in an activity during the week (October 16-22).

He might not have meant to, but Bernard Salt got us off to an early start on Saturday, over at The Weekend Australian. Salt penned a provocative piece about how “Middle-Aged Moralisers” - a term with which he identifies - don’t like hipster cafes. He set off a small Twitter storm for his trouble. Quite aside from their poor quality furnishings and their complex approach to gender rules on toilet doors, Salt drew the most ire for his observation that hipster cafes are charging $22 a pop for smashed avocado on toast, and that young-people-who-haven’t-yet-bought-houses should not be paying for such frivolities. Instead, they should be directing all that hard-earned towards a deposit for a home-loan.

Now some might argue that the day young hipster-folk stop trading smashed avocado lunches is the day the Australian economy dies, and poverty comes a-calling for us all. But Salt does have a point. According to a study released by the Australian Council of Social Services yesterday, one of the surest ways to avoid poverty in Australia is to own your own home. Only 15.5% of the three-million Australians living below the poverty line in 2014 were home-owners, while 59.7% were renting.

Saving your money to buy a house may seem like a good wisdom, but many in the “haven’t-yet-bought-houses” category have already sat through that lecture. Amid confusion about whether the number of first home-buyers entering the market is very low or even lower, Salt's screed is just another reminder of the impending poverty of old age.

For those apparently well-off enough to feel the stigma and shame of not-buying-houses, rising property values are nothing to cheer about. Many who can’t afford a home today probably won’t be able to afford it again tomorrow, and will experience increasing levels of poverty and inequality as they struggle to meet rising rents. Even having a job is no guarantee of the good life - in 2014, about a third of Australians living below the poverty line were wage earners. But for those who can’t get a job, and those whose working days are behind them, the cost of housing will always be the biggest barrier to financial wellbeing.

So, for the three-million Australians who already live below the poverty line, and the countless others who will join them in the fullness of time, doing something about housing affordability will make a critical difference. Building much more Social Housing, inserting meaningful Affordable Housing targets into our planning laws, and fixing our various tax settings would be a good start.

Even if we did all of this today, slowing the growth of housing costs would take some time. Making a couple of quick changes to our renting laws would also help: allowing tenants a genuine option to challenge unreasonable rent increases, so they may respond to landlords' price signals in a manner other than moving out; and removing landlords' ability to end tenancies without a reason so that tenants will have some security in their homes for as long as they meet the terms of their agreements, and their properties remain available for rent.

In the meantime... the smashed avo looks pretty good today, if you can afford it.

Friday, October 14, 2016

Please, may we have some more?

The proposed transfer of 18,000 Public Housing properties to Community Housing landlords is as fine an example of placing your policy burden on somebody else's bottom line as ever you might see...

We hear every so often from the Australian Government about its debt and deficit worries. The significance of that debt is questionable, and it's low by international standards, but for the sake of the argument let’s accept the need for budget repair.

The NSW Government, on the other hand is completely debt free. It's hoarding a handy $4.7billion surplus, largely from a buoyant stamp duty take on the back of Sydney's eye-watering house prices over the last few years. Stamp duty has rapidly grown from about 20% of the state’s tax revenue just a few short years ago, to nearly 30% today, increasing from $4.5billion to $8.3billion in the last tax year.

One of the selling points of transferring properties to Community Housing is tapping the de facto subsidy for Community Housing landlords that's known as Commonwealth Rent Assistance (CRA). For people on low incomes, such as a Centrelink benefit or a minimum wage, CRA helps offset the high cost of renting in Australia by adding a few extra dollars to your take-home payments. Community Housing landlords calculate the rent to maximise their tenants' CRA entitlements, then take the lot. This is a nifty way for a state government to draw on federal money to fund their agreed Social Housing responsibilities.

The media release in which Minister Hazzard announced the Social Housing Management Transfer Program suggested it would give Community Housing landlords an extra billion dollars over the next twenty years. That's a billion dollars of federal money, delivered via individual tenants on account of their entitlements to CRA, in case we hadn't made that clear.

If the NSW Government, rich with the take from Sydney’s sustained property largesse, wanted to chuck a lazy billion dollars at the Social Housing system in order to improve it for tenants, it could very easily do so without adding to our apparent federal spending woes - or at least, without dipping into the only national scheme designed to assist tenants in the private rental market. If it really wanted to, it could do this more than once every twenty years or so without putting too much strain on the bank.

It's just a matter of priorities.

Wednesday, October 12, 2016

Understanding the Housing Legislation Amendment Bill 2016

People often ask us what we mean when we talk about Social Housing. How does it differ from Public Housing? Where does Community Housing come from? Aren't they different names for the same thing? And is there even really such a thing as Affordable Housing? What about housing co-ops or housing that's owned and managed by Aboriginal Housing Corporations or Local Aboriginal Land Councils?

We'd love to write something that sorts all this out once and for all, but there's a problem: the whole kit and caboodle just keeps changing.

Don't look now, but it's about to change again. Yesterday the Minister for Disability Services, Ageing and Multiculturalism, John Ajaka, introduced the Housing Legislation Amendment Bill 2016 into the Legislative Council of NSW.

If passed, the bill will do two things:
... amend the Housing Act 2001 with respect to the entry of concurrent leases; and amend the Community Housing Providers (Adoption of National Law) Act 2012 with respect to the registration of, and provision of assistance to, community housing providers that cannot be registered under the Community Housing Providers National Law (NSW).
So - what does all of that mean?

The first thing - concurrent leases - concerns the transfer of Social Housing tenancy management from Public Housing to Community Housing. The Minister for Social Housing, Brad Hazzard, recently announced the transfer of an additional 18,000 tenanted properties (approximately) "to ensure a better experience for tenants in Social Housing". Critically, Hazzard announced that "tenants' lease length and lease conditions will remain the same, their income after rent will remain the same and FACS will keep tenants fully informed as their areas transition to community housing providers".

But the Housing Legislation Amendment Bill 2016 makes it clear that, under the proposed property transfer scheme, tenants will not be given a choice. Many of their counterparts in previous schemes did have a choice - albeit a limited one. Some tenants were able to decline to participate in an earlier property transfer program, such as a group in South Coogee in 2009. Others were not, and there are now entire areas across New South Wales where FACS Housing no longer operates as a landlord. The properties, and the tenants, remain, but now they have a Community Housing landlord. Returning for a moment to Minister Hazzard's announcement, it looks as though four new areas are to be added to the list: the Shoalhaven, Northern Sydney, Mid North Coast and Hunter/New England (excluding Newcastle and Lake Macquarie LGAs). We expect many tenants in these areas will have found this news unsettling, and the lack of choice to be afforded them insulting.

But the introduction of "concurrent leases" potentially resolves some of the pragmatic concerns that tenants would factor into their choice, if they had one. A concurrent lease allows those property rights and interests that have not been passed on to, say, a residential tenant, to be transferred to a third party. Lawyers would think of it as a division of the "bundle of rights" that are attached to property, in a way that retains a clear hierarchy of interests and concerns - property owner > concurrent lessee/landlord > residential tenant/occupier. Rights that are tied to a residential tenancy agreement are not affected by a concurrent lease, and this is what the Minister is getting at when he suggests "tenants' lease length and lease conditions will remain the same".

Strictly speaking, the Land & Housing Corporation (the Public Housing landlord) has been setting up concurrent leases all over the place, as it has already transferred the management of around 28,000 Public Housing properties to Community Housing landlords since about 2008. But it's not been done in such a clear-cut way before. In the past, tenants have been asked to rip up their residential tenancy agreements with the Land & Housing Corporation, and enter into a new one - perhaps with new, less favourable terms - with the Community Housing landlord.

Concurrent leases may take some of the sting out of the coming property transfer scheme, but that's not the end of the story. Different Social Housing landlords apply different tenancy management policies and, while it is true that the existing terms of a tenant's residential tenancy agreement should remain intact, this application of different policies might make for some startling changes to tenants' experiences. For instance, Community Housing landlords set their rent in a way that requires tenants to claim Commonwealth Rent Assistance, but the Land & Housing Corporation does not. On paper, this will look like a hefty rent increase. In practise, tenants will have to pay 100% of their Rent Assistance to their Community Housing landlord. This is what the Minister is getting at when he says "their income after rent will remain the same".

To add another layer of complexity to our understanding, but perhaps a simplification to the system itself, the Housing Legislation Amendment Bill 2016 will provide that, as a matter of law, Public Housing that is transferred over to Community Housing by way of a concurrent lease will no longer be considered Public Housing. We'll add that to our list of things to write about...

But what of the second thing - "the registration of, and provision of assistance to, community housing providers that cannot be registered under the Community Housing Providers National Law (NSW)"? We won't go into in too much detail on this today, because we've already taken up enough of your time. But as we understand it, it is designed to solve a problem for Local Aboriginal Land Councils who run Social Housing schemes, and who want to register as an Aboriginal Community Housing Provider with the Aboriginal Housing Office. Currently they're unable to. As statutorily constituted bodies who own their own properties they cannot meet the conditions of registration, which would require them to transfer their properties to another registered provider in the event of winding up.

The Housing Legislation Amendment Bill 2016 would solve this issue by requiring the Social Housing Minister to establish a "local system of registration" that would mirror the national system as much as is possible. In other words, the Minister must create a whole new registration system that looks a lot like the existing one, but leaving aside one or two things that prevent some current Social Housing landlords from becoming registered. The trick will be to ensure the "one or two things" doesn't become too broad, giving potential new entrants a sneaky back-door into the Social Housing system and undermining the integrity of the existing registration scheme.

We'll be watching all of this closely as the bill makes its way through the Houses of Parliament.

Wednesday, October 5, 2016

Just give me one good reason - why tenancy laws need to change

On Monday Jacob Saulwick asked the question, when should landlords be allowed to evict tenants? He shared the story of Penny, who had been in her rented home for five years when she received a termination notice in the mail. She wasn’t give a reason.

Under current tenancy legislation, renters in NSW can still be told to leave their home for no reason - the landlord can simply issue a ‘no grounds’ termination. But Penny was pretty sure she knew the reason: the email from the real estate agent informing her she was being evicted came in response to a request she’d sent them for repairs to be done before a proposed rent increase.

There’s always a reason for ending a tenancy, just not always a good one.

If landlords can end a tenancy without having to provide a reason, tenants are left with very few avenues for challenging an unfair eviction. This means tenants never know how long they can expect to be able to stay in a house. It also means that many don’t feel like they can ask for repairs to be done or complain about excessive rent increases or other problems that come up. They worry they’ll get kicked out for being ‘annoying’ tenants, and there will be no way to hold their landlord to account. They are right to worry - we know it happens.

Tenant advocates regularly hear from tenants who have received a notice of rent increase with a ‘no-grounds’ notice of termination in the same envelope, inviting them to choose which one they prefer. We get contacted by tenants who have taken their landlord to the NSW Civil and Administrative Tribunal (the Tribunal that deals with tenancy disputes) over repairs or a rent increase or some other matter and then received a ‘no-grounds’ notice of termination some time soon after. We even know of one occasion where a real estate agent served a ‘no-grounds’ notice of termination in the lifts on the way out of the Tribunal; and another where an agent drafted a ‘no-grounds’ notice of termination and handed it to the tenant before the Tribunal member had finished delivering a decision on an application for repairs.

There is a provision within existing tenancy legislation concerning ‘retaliatory evictions’. This section of the Residential Tenancies Act is supposed to protect tenants from getting kicked out because they tried to assert their rights. Unfortunately it is notoriously weak. There are only around ten reported decisions where the Tribunal has been asked to consider whether a notice of termination was retaliatory – and all but one of these was decided in favour of the landlord. We know of one tenant who received a ‘no-grounds’ notice of termination less than two weeks after the Tribunal found that an earlier notice was retaliatory.

If a tenant doesn’t do the right thing there are already provisions for landlords to end a tenancy, for example where there are problems with the rent being paid. The problem is that many landlords find it easier to end a termination via ‘no grounds’ terminations, taking away the tenant’s right to defend themselves and dispute the basis for termination if they are accused of a breach. A tenant about to lose their home should be provided with a reason, and they should have some way of challenging this if they need to.

So how can this be fixed? The solution is quite simple – get rid of the provisions within current tenancy legislation that allow landlords to end tenancies without giving a specific reason. Instead an expanded list of grounds could be provided - for example if a landlord needed to move back in – that allowed tenants to go to the Tribunal to test the reason for eviction if they believe it to be disingenuous. This would mean that landlords with a genuine reason to end their tenancy could do so, but tenants would have greater security.

One good reason to leave your home, surely that is not too much to ask?