Friday, April 21, 2017

Public housing amnesty - income, assets and unauthorised occupants

Yes, it's amnesty time again. If you are a public housing or Aboriginal Housing Office tenant this amnesty will cover you.  The amnesty will run from 8am Monday morning (24 April) through until midnight on Sunday 11 June and covers undisclosed income and assets, as well as unauthorised occupants.



The amnesty means if you haven't yet had the chance to update FACS Housing about a change in your income or assets or to tell them that someone has moved in, you can let them know during the amnesty without worrying about having to pay back rent or facing prosecution.

FACS Housing will use the information you disclose about your household income to recalculate your rent and water payments, and you'll be expected to pay this recalculated (likely higher) rent going forward.  They won't, however, raise a debt, prosecute or take action to evict you on the basis of the rent increase.

Providing information about about someone who is living with you that FACS doesn't know about (an "unauthorised occupant") will be treated as an application to approve an additional occupant.  If approved (see FACS policy on this) your rent will be reassessed from the date you provided the new info - again not backdated. If you're trying to figure out when FACS considers someone to be an 'additional occupant' rather than a visitor, this is generally when the person has been or will be staying longer than 28 days in a row (but again see FACS policy for more information).

All public housing and Aboriginal housing tenants will receive some information directly from FACS about the amnesty encouraging them to self disclose.  But it will also be open to members of the public to call in and make 'allegations' about tenants (and unfortunately given past experience we can expect there to be a bit of 'dob your neighbour in' messaging running through mainstream media reports about the amnesty).  Where an allegation is made FACS Housing will provide a tenant with an opportunity to respond to an allegation. If the tenant accepts the allegation at that point they will be protected by the amnesty.  If they challenge the allegation they forfeit protection under the amnesty and FACS will continue to investigate following 'standard business procedures'.

If you are a public housing or AHO tenant and know that FACS has incorrect information about your household's income and assets, or you haven't yet made an application for an 'additional occupant' and someone's already moved in this might be a good opportunity to let FACS know.  Outside of an amnesty FACS Housing will normally vary or cancel a tenant's rebate, raise a debt for rent arrears (sometimes a very significant debt), and then move to terminate on the basis of that debt. So you could be saving yourself a whole lot of hassle ... and perhaps your tenancy.

Some extra detail to consider:
  • If you are a tenant of a Community Housing Provider or an Aboriginal Community Housing Provider you are not covered by the amnesty. Any information you provide, or any information provided as an allegation by someone else, will not be passed on by FACS Housing to your relevant provider. Tenants will be encouraged to contact their provider, but will not be protected from any debts or evictions by the amnesty.
  • If an investigation around income and assets, or about an unauthorised occupant has already commenced and you have received a letter informing you of this (a 'Natural Justice' letter) you will not be given any protection under the amnesty.
  • If you disclose or are found to own/part own property that makes you ineligible for housing assistance, FACS Housing states you will be "required to surrender your tenancy at a time that is agreed"
  • Only disclosures about income & assets and unauthorised occupants will come under protection during the amnesty.  FACS notes "tenants who make declarations that don't fall under the protected amnesty categories will be assessed on a case by case basis and may face prosecution".
If you are thinking about calling up during the amnesty but have any concerns or questions you should first get in touch with your local Tenants Advice and Advocacy Service for free advice.

If you have any extra questions about the amnesty, send them through ... we might be able to help answer them or ask FACS Housing to respond.

The original version of this post included information provided by FACS that any allegation or self-disclosures made about Community Housing tenants would be passed on by FACS to the provider. This information was incorrect and the post has been edited accordingly.

Thursday, April 20, 2017

Where do our landlords live?

Last week's release of tax data from the Australian taxation Office has renewed discussions about who benefits from negative gearing and whether the perk could be better spent. However, the data also produced some insights about where our landlords live. That is, the post-codes of people who declare rental income to the tax office are now recorded. Now isn't that interesting?


We've previously discussed how tenure breakdown is becoming an increasingly important electoral factor, and why all politicians should support tenants' rights. The growing number of households who are long-term renters could begin to have an impact in elections for marginal seats. It's clear from the new tax data that landlords are concentrated in particular regions, and continue to outnumber tenants in a relatively large number of spots where a high rate of owner-occupation remains the norm. However, as the demographics of New South Wales change, this will also change, potentially bringing more and more votes into play as members of the community allow their votes to be influenced by housing policy and promises.

Particularly those for whom current tax settings and regulatory frameworks do not work and are in fact harmful - namely tenants - this data should be of interest. We've made three maps exploring this data with one question in mind: where do our landlords call home? Although it is important to note that this data only records where a person reports their income - the rental income may come from an entirely different state. They might actually be someone else's landlord.

The interactive maps here can be explored by click and dragging, and zooming in and out with the + or - buttons on the screen.

First, we looked at just the raw numbers of people who declared some rental income in the 2014-15 year. Baulkham Hills (postcode 2153) was the clear leader here - 7,709 taxpayers from that area declared some rental income. Two other Western Sydney areas featured highly in this count - postcode 2145, to the west of Parramatta and postcode 2170 located around Liverpool.

The picture starts to colour in a little when we look at landlords as a percentage of all people declaring income of any form. It's important to note that even though almost all adults or near adults pay tax (for instance, through GST) not all people lodge tax returns. Tax data should be treated with some caution on account of this, but it can give us a reasonably clear picture. On this map, blue signifies where more than the national average number of landlords per tax declarant reside, and green shows where there are less than the average. The North Shore's relatively high number of landlords comes through, but Sydney's south and south west also feature strongly. In fact the two areas with the highest proportions of landlords per tax declarant are Orchard Hills and Horsley Park in the south west.
This high proportion is partly due to the relatively low numbers of people in the areas, but it could also suggest some things about how housing investment works. These areas were developed not so long ago, and new homes may have been purchased by households who already had a foothold in the property market; or they may have been purchased by first homebuyers who have since tapped into rising house prices, borrowed up and bought some more... Getting to the bottom of that would make for an interesting research project.

Finally, we looked at the number of landlords in an area compared to the number of bonds lodged with the Rental Bond Board. This gives a clearer indication of areas where landlords live compared to where they invest. Green indicates less than a 1:1 ration of landlords to tenants, which is what you would expect since there are fewer landlords than then there are tenants. Blue indicates there are more landlords than tenants in an area - indicating that these are the areas where housing is not being brought into the private rental market. In Sydney, the postcodes 2156 (Annangrove) and 2125 (West Pennant Hills) are noticible as centres for landlords, joining Orchard Hills and Horsley Park. We haven't tried to account for "rentvestors" of course who will contribute to both counts.



However across New South Wales there are a number of areas which have very high numbers but can be explained by very low numbers of both tenants and landlords - for instance postcode 2898 (Lord Howe Island) has the highest ratio of landlords to tenants in the state - at least partly because there are only 3 bonds lodged. It is still interesting to see the locations where landlords outnumber tenants, sometimes by quite a margin - and of course, this doesn't account for landlords who are also tenants themselves.

Bonus: National versions of the first two maps are available.
The number of landlords in each Australia postcode
The percentage of landlords of tax declarants in each Australian postcode

Thursday, April 13, 2017

IPART review of social housing rents, etc

As part of the Future Directions for Social Housing strategy, former NSW Premier Mike Baird tasked the Independent Pricing and Regulatory Tribunal (IPART) with a review of social and affordable housing rent models. Earlier in the week IPART released its draft report, along with a number of draft recommendations and a call for further comments by early May 2017.


Now, it's important to keep in mind that this is merely a draft of the report, and even when finalised it will simply be making recommendations to Government... and who knows how all that will eventually play out? But there are four significant proposals in there that are likely to shape the development of social housing policy and practice in New South Wales.

1. Income related rents are the go, but tenants should pay more
First, there's the recommendation that social housing rents should continue to be calculated as a percentage of a tenant's income, rather than set against market rents or calculated in some other way. IPART found that housing affordability is declining across the board, as both house prices and private market rents are rising faster than incomes. In order to ensure affordability is protected within social housing it recommends its rents stay linked to tenants' incomes.

From IPART's draft report, page 14
IPART found no strong link between income-related rents and work disincentives for tenants, noting that a range of other factors contribute to tenants' abilities and incentives to take on paid work. It recommends continuing to set rents based on a 25%-30% scale, so that tenants on higher incomes pay proportionally more of their income as rent. This may also mean retaining the problem of higher effective marginal tax rates for income earners in social housing, as the scale does not increase progressively. Rather than a higher income earner's rent being based on 25% on the first chunk of their income, sliding up to 30% as each threshold is passed until reaching the market cap, the proportion is simply adjusted to reflect the rate payable at the relevant level of income. IPART hasn't specifically weighed in on this issue, and its modelling suggests members haven't turned their minds to it, but this is where any real work disincentive is currently built into social housing rents. It's not the most significant work disincentive for social housing tenants, though, and IPART's draft report does have a bit to say on policies around tenants' eligibility and renewal of tenancies with this in mind. We'll come to that in a moment.

Still on rents, though, and the draft report recommends some types of income that are currently excluded from rent calculations, or are calculated at a lower rate, should be included and/or brought up to the 25%-30% rate. This would bring a larger proportion of a tenant's Family Tax Benefit payments into their rent calculations, as well as previously untapped income such as the Pension Supplement. For some tenants rents would go up by around $8-$12 per week - netting social housing landlords an estimated $40million p.a. - and the draft report recommends limiting these increases to no more than $10 per week in any given year.

2. Back to the future on eligibility and reviewable fixed-term tenancies

The second significant thing is a draft recommendation to stop using fixed term tenancy agreements for social housing tenancies - that is, we should go back to using "continuous leases" and periodically review tenants' needs rather than their eligibility for assistance. The use of fixed term tenancy agreements that trigger reviews of tenants' eligibility is where the real work disincentive exist within our social housing system, as tenants who move into a higher income bracket are not only faced with increasing rents and higher effective marginal tax rates, they could actually lose their home if they earn too much.

IPART's draft recommendation includes "continuous leases to be reviewed at least every three years to assess whether the dwelling continues to be suitable for the tenant's needs and characteristics". While this leaves some wriggle room as to what exactly would happen if a review came back suggesting that a dwelling is no longer suited to a particular tenants needs, other parts of IPARTs report suggest this would result in relocation rather than eviction. Certainly an increase in a tenant's income would no longer be a factor, as the draft report suggests tenants who earn too much, and do not want to move into the private rental market - even with one-off assistance and a limited right of return - should pay an additional 5% above market rent for the privilege of a tenancy that offers greater security of tenure than can be achieved in the private rental market.

This is an interesting but unwelcome proposition. It plays into similar conversations happening in other parts of the rental housing sector advancing the idea of charging tenants a premium for a more secure tenancy. Of course we'd rather see tenancies made more secure across the board, by making some changes to our renting laws to remove landlords' rights to evict tenants without grounds - and we certainly think that would go much further as an incentive for working tenants to move out of the social housing system. But on this, the notion that social housing tenancies are more secure than the private rental market is a nice idea, but is probably not as true as we'd like it to be. There's a definite trend towards social housing landlords using no-grounds notices of termination when all else is deemed likely to fail. Curiously, IPART's draft report has made no reference to the Residential Tenancies Act in its recommendations or deliberations concerning the transition from fixed terms to continuous leases.

3. Choice based letting
Third on our list is the elusive notion of "matching households to the best housing for their needs", which is code for sorting out this apparent problem of "under-occupancy" within the social housing portfolio. Currently this is addressed through measures such as the vacant bedroom charge, which is applied to any tenant who declines to move to a smaller dwelling when asked to, and limiting additional occupants' rights to be recognised as a tenant if the original tenant goes to prison, or into rehab, or passes on.

IPART's draft report recommends a new approach - making it clear that eligibility for social housing is not tied to any particular dwelling, but to "a dwelling that meets their household's needs". Thus, social housing tenants whose household complements and needs change over time would expect to be moved around to make sure the portfolio can be put to maximum, efficient use. This would be coupled with a choice-based letting system as a way of softening the blow.

Choice based letting has been used in a couple of other places - IPART refers to a Canadian experiment but also notes it has been widely used in parts of Europe - but our experience of it in New South Wales is limited to relocations from Millers Point, Dawes Point and The Rocks. In those instances, some tenants referred to it as the "housing lottery" indicating that it can indeed be seen as something other than an exercise in agency and choice, particularly for those who apply for available properties and miss out.

Nevertheless, IPART's draft report provides quite a bit of detail about how a choice based letting system might work, and we'll spend some time looking over it. Significantly, it suggests tenants awaiting a transfer should be given priority over people on the waiting list, which would be a fair departure from the status quo. Presumably that would apply to tenants who have initiated a transfer as much as those who have been approached to relocate, provided the tenant's "eligibility" review has determined that their housing needs have changed, but this has not been made clear.

What's also not clear is how tenants who have been approached to relocate but decline to participate in the choice based letting scheme would be treated. Here again IPART has made no reference to the Residential Tenancies Act and gives us no indication of how tenancies will end - whether in the case of a tenant who doesn't comply with a request to move, or one who does.

4. Social housing isn't going to pay for itself
Last but not least is IPART's draft recommendation that the New South Wales Government implement a sustainable funding model for social housing providers, noting a current shortfall of close to $1billion. The draft suggests this should be paid to housing providers as an explicit subsidy, rather than an implicit subsidy as is currently the case. This is incredibly significant in the context of a national discussion in which the value of the National Affordable Housing Agreement is being called into question.

From IPART's draft report, page 34

The draft report also calls for the development and publication of a Social Housing Strategy, to be updated annually, outlining how, where and why new dwellings are to be added to the portfolio. It makes a further push for the management of social housing to be handled by community housing landlords, suggesting the role for government is to oversee construction of dwellings and set the policies under which social housing should be managed.

Interestingly, IPART's draft report suggests that the New South Wales Government should steer away from affordable housing programs, focusing on using its available resources to assist those with the greatest need instead. Given discussions at the national level around the development of an Affordable Housing Bond Aggregator, and the potential for Inclusionary Zoning policies to be introduced through a range of planning reforms, it may soon be possible for community housing landlords to pursue growth of their affordable housing portfolios without the direct involvement of a NSW State Government program. In any case, we're inclined to agree that if faced with a choice between growing affordable housing or social housing portfolios, it's social housing that should get the nod.

***
IPART is calling for written responses to its draft report by 12 May 2017. They will hold a public hearing in Dubbo on 2 May 2017, and another in Sydney on 9 May 2017. For more information and details on how to contribute your own feedback, visit their website at this link here.

Australia, the land of indefinite, insecure tenancies

There's been a lot of talk lately about the insecurity of renting in Australia, and how things would be better if we can somehow get everyone onto longer leases. There's a perception that Australian tenancies are notoriously short, with the majority of leases lasting around 6 or 12 months.


We're often asked how long leases ought to be in order to give renters the security they need. Take, for example, this recent interview Leo did with ABC 24's Breakfast program, where he is asked (at 1:50) "what length of tenancies would you like to see become available for people?"


And Su-Lin Tan's latest piece in the Australian Financial Review - Renting in Australia is generally 'miserable' but doesn't have to be - wades into similar territory. Tan notes the growing number of Australians "not interested in buying a home" and adds:
But one of the biggest obstacles is the lack of long-term leases, a stumbling block for people who have kids in school, long-term job commitments or simply want a settled life.
Referring to data and commentary from the recent Unsettled report, Tan also notes that the Netherlands, Germany and Denmark offer "infinite leases".

For a more comprehensive look at how European tenancies work, there's the recent publication of the International Union of Tenants report from members to its 20th congress, Rent Regulation and Security of Tenure in the Private Rental Sector. Or, for a quicker grab, there's UK Shelter's map of renters rights in Europe. These tell us that for the majority of European countries tenancies are "protected" with fixed terms of three years, if indeed they are not "permanent" and can only be ended with legal grounds.

And what of Australia? In all jurisdictions tenancies tend to begin with a fixed-term agreement. It is for the parties to decide the length of that term, and it is a matter of convention rather than law that most tenancies begin with a term of 6 or 12 months. If a tenancy agreement is not formally terminated following the processes set out in our renting laws, or a new fixed term created, it carries over and becomes a periodic or continuing agreement once the fixed term expires. It does not end simply because the fixed term expires. These are essentially permanent agreements similar to what we see in parts of Europe, where tenants' have some of the strongest protections against eviction and unreasonable rent increases in the world.

So what makes Australia different? What's missing from our laws, that operates in those parts of Europe that we look to for inspiration, is the part about not being able to end tenancies without legal grounds. Or rather, in all of the Australian states and territories it is lawful to end a tenancy without a reason, so the legal ground becomes "no grounds". In New South Wales this can happen at the end of a fixed term agreement with 30 days notice to the tenant, or at any time during a periodic agreement with 90 days notice to the tenant.

When issued with a valid notice of termination without grounds, there is generally nothing a tenant can do to save their tenancy but beg. The rationale for this is that "landlords should be able to deal with their property as they see fit". While in Europe, landlords presumably still manage to deal with their property as they see fit, but they must do so within structures that protect tenants from unfair or unreasonable evictions.

A tenancy cannot be terminated without grounds during a fixed term, which is why it's often suggested that longer fixed terms would be a good thing. It might also explain why some tenants enter into new short fixed terms at the expiry of their term, although this might also be because landlords and real estate agents often insist - threatening termination without grounds if a "new agreement" isn't signed. And while longer fixed terms may suit some people, we can't help but notice that tenants frequently ask for advice on how to end a fixed-term agreement early. Some might be encouraged by the use of longer fixed terms, but they are not the catch-all solution we're after. Indeed, long fixed term agreements might present unacceptable risks to many tenants, if the means by which they are encouraged is the erosion of tenants' rights.

How long are Australian tenancies then? The Unsettled report doesn't give us much detail on this, focusing instead on the length of fixed terms for Australian renters. Unsurprisingly, it found that 83% of Australian renters have no fixed term agreement, or are on an agreement of 12 months or less. It also found that half of Australian renters have moved three times or more, including 19% who have been renting for less than five years, and 42% of those under the age of 35.

For tenancies in New South Wales, tenants' bonds lodged with the Rental Bond Board reveal a little more. From data released under a freedom of information request in 2016 and made available as part of the NSW Government's open data portal, it is clear that only a small proportion of tenancies end within 12 months or less. The majority continue into a second year and a significant amount go on for a third year after that. Slightly more than one in ten rental bonds have been held by the Board for more than three years.

Bonds lodged with the NSW Rental Bond Board, by duration
Whether they are (or were) attached to agreements with a fixed term of 6, 12 or any number of months, these tenancies are indefinite. They are insecure because they can be brought to an end without grounds. If predictability and stability for long-term renters is what we're after, we should focus less on encouraging longer fixed terms, and more on getting reasonable grounds for termination into our renting laws. As long as their home remains available to rent, and they continue to meet their commitments under the agreement, tenants should not be asked to leave without a good reason.

Tuesday, April 11, 2017

Federal Budget Watch - priming the pumps

There have been a few developments since we last looked in on expectations for housing affordability measures in the coming Federal Budget. For instance there's the establishment of an affordable housing taskforce to come up with a UK style affordable housing bond aggregator that will suit local conditions, as well as intensifying speculation that first home buyers could be allowed to raid their superannuation funds in order to come up with a deposit before applying for a loan. In his address to the Australian Housing and Urban Research Institute yesterday, Treasurer Scott Morrison all but confirmed he will pursue these policies, which he believes will deliver housing affordability while ensuring house prices continue to soar.


It was an interesting speech, full of all the usual stuff about supply not keeping up with demand. It made a point of noting the majority of investors in the private rental market are small time speculators, holding only a single rental property with a low yield while hoping it will rise in value and deliver a solid capital gain. It suggested that any change to negative gearing would come at a cost to renters (although it didn't go into any detail about what that might be). And it had yet another go at the National Affordable Housing Agreement, suggesting its $1.3billion-ish annual spend is not producing the right outcomes because the effects of unaffordable housing are still being felt by low-income households.

What it didn't do was seriously consider the key drivers of unaffordability in our housing system. It steered clear of the capital gains tax exemptions that encourage home-owners to shovel excess income into their housing rather than other, higher taxed investments. It made no reference to the impact that small-time investors who trade in the same housing market - buying and selling mostly established dwellings - are having on the shape of the private rental market. It didn't even come close to considering what's recently been described as the financialisation of housing - the notion that a dwelling is is not a basic necessity but a means of accumulating wealth - is what's driving up the cost.

Or rather, it didn't consider these things to be a problem. In fact, in focusing on new ways to entice private investment into residential property - through the development of an affordable housing bond aggregator on the one hand, and providing incentives to stimulate home-ownership on the other - it goes so far as to suggest that further financialisation of housing will be the solution.

It's easy enough to see how allowing first home-buyers to dip into their superannuation will put upward pressure on prices. The more people have to spend, and the more competition there is in the market, the higher they'll be able to go. Without curbing existing tax breaks investors will continue to ride on the coat-tails of owner-occupiers, trading in the same market and pushing prices even higher. No doubt this will be to every buyer's satisfaction, once they become an owner, but for those who remain unable to buy despite their (potentially) increased access to debt it will simply exacerbate all the existing problems of relying on rental housing as the only long-term option.

Presumably this is where the bond aggregator and the development of new affordable housing portfolios comes in. According to the Treasurer in his speech yesterday, "the bond aggregator would issue bonds to the market, and on-lend these funds to community housing providers - allowing them to access cheaper and longer term finance". He also said "the goal is for affordable housing to be conceived not so much as a real estate investment, but a longer term fixed interest investment that can comfortably sit within institutional investment portfolios".

Perhaps the Treasurer has missed a point here. While financiers may be able to distinguish between affordable housing and real estate investment, community housing providers will not. They'll be buying, selling and renting into the same rising markets as everybody else. And while ever land values and housing costs continue to rise, so too will the need for "cheaper and longer term finance" for those who would deliver affordable housing to those markets. Community housing landlords may be accustomed to pushing against strong headwinds, but to date they've not had the full weight of Australia's affordable rental housing policies foisted upon them as they do. If we are to expect them to succeed, we may have to offer them more than just cheap debt. Taking some of the heat out of Australia's housing markets might also have to be on the table, and this means reforming negative gearing and capital gains tax concessions.

There's a final point to be made following the Treasurer's remarks yesterday. He concluded, correctly, that "there are no single solutions and the payback is achieved in some cases over a generation - not an electoral or budget cycle". With this in mind, let's acknowledge that whatever measures are proposed on budget night next month will be small consolation to many of the growing number of Australians who currently rent their home. Affordability is one thing, but knowing you can be evicted without a good reason is something else entirely. It's well beyond time to bring our renting laws up to scratch.

Thursday, April 6, 2017

Airbnb and the rent in Sydney

Today we released our report into the impact of Airbnb on the rent in Sydney. You can check out the full report here: https://tenants.org.au/tu/airbnbsydney2017. Let's have a closer look at some of the findings.



One of the interesting numbers we've examined is the number of Airbnb listings that are actually active in any given month. While it's true that people keep creating more and more listings on Airbnb, that doesn't always tell us the really important number - how many are active, and therefore what impact these listings are having on the rental market.

We really can't explore some of these issues due to the lack of data around housing in Australia. We don't know which properties are rented homes or owner-occupied, and this makes it difficult to read a lot into the numbers.

We can be clear that simply being listed on Airbnb does not mean a property has been removed from the rental market and there are two clear examples we can imagine to illustrate the point. Imagine a 2 bedroom unit in Bondi. The occupant lists the place on Airbnb for the week between Christmas and New Year's while they go away and visit family. If the occupant was an owner-occupier then this property wasn't available for rent, and Airbnb hasn't changed anything about that. If the occupant was a renter, then this property has also have not been removed from the rental sector - it is still in it.

The Greater Sydney area 
Whether it is owned or rented, what is more relevant is how often a property is booked. This chart covering the whole of Sydney from August 2014-August 2016 illustrates that there actually is a large number of listings on Airbnb which don't even receive one booked night in any given month. This suggests a large number of people have listed their property in the lead up to summer, booked it perhaps for a few nights over summer, and have no intention of listing the place again.

We can clearly see the summer bump both in December 2014 and December 2015 - far more activity then, than for the rest of the year. What is interesting though, is that the numbers of listings with 8 or more nights booked in a single month (or roughly 100 nights in a year) is much more constant throughout the year. This effect is very clear in our three hotspots with really large summer bumps in beach-side Bondi and Manly, and a still sizable but reduced bump in inner city Darlinghurst.






All of this leads us to think that for the majority of users, Airbnb activity is sporadic. However more commercial operators of course act differently, and are looking to maximise their occupancy all year round, leading to a more consistent level of activity. Regulation of short term lets should look to effectively control commercial operators, and ensure that their activity in short term lets does not produce harmful effects on residential tenants.

For the full report, including interactive maps - check out tenants.org.au/tu/AirbnbSydney2017

Friday, March 31, 2017

What's wrong with keeping a sneaky pet?

Kirsten Robb penned an interesting piece for Domain this week, outlining how real estate agents know when you're keeping a sneaky pet.


Thing is, we know you know, and we know you know we know. We also know that because you know, and because we know you know, you've probably given implied consent for us to keep the pet. It's now just a matter of evidence - and the system works!

Actually, no, it's broken, and Robb's article points us to two key problems that could do with a fix. While discussing how to easily evict a tenant for keeping a sneaky pet, by giving them a termination notice without grounds because keeping a pet is often not actually a breach of a tenancy agreement, Sam Nokes of the Real Estate Institute of Victoria's property management chapter says:
I can’t tell you how many times I’ve had owners that would have said yes to a pet, but because the tenants lied and hid it from them, they’ve said no — the dishonestly reflects a general dishonesty.
The first problem is easy enough to spot - landlords using "no grounds" eviction notices to end tenancies after forming a negative view of a tenant. Landlords should always be required to give a reason - one that they are prepared to stand by - when requiring a tenant to leave. The law should provide landlords with some additional grounds for termination, such as "the property is no longer available for rent." They should no longer be able to mask their bad reasons, such as "I have formed the view that the tenant is dishonest", by ending tenancies without grounds.

The idea that tenants have to ask the landlord for permission to keep a pet is the second problem. It encourages dishonesty, and facilitates mistrust, in situations where a landlord might otherwise take a reasonable approach to the matter. Renting laws would be better served by taking any requirement for consent to keep pets out of the equation, by prohibiting the use of "no pets" clauses in tenancy agreements. As we said not long ago, there are some good reasons why landlords should get behind this. Perhaps we can add "because honesty is important" to the list.