Who is the social housing landlord in this brave new world?

There has been some understandable confusion about the role of community housing providers after FACS Housing transfers large sections of its public housing stock over to them.

So, what will be the various roles of these parties in this brave new world:

• NSW Land and Housing Corporation (LAHC)
• FACS Housing NSW
• community housing landlord
• community housing tenant

Here’s what the webpages of LAHC and FACS NSW say:

• LAHC and FACS work together to achieve a unified administration of the Act
• LAHC owns and manages land, buildings and other assets within the social housing portfolio'
• Housing NSW, an agency of the NSW Department of Family and Community Services (FACS) is one of the largest providers of social housing in the world
• Housing NSW directly manages approximately 122,000 properties Housing NSW provides more than 19,000 properties through community housing providers.

The Social Housing Minister's media release talks of:

Delivering better outcomes for tenants and the community is the focus of reform which will see social housing in four areas of NSW managed by Community Housing Providers (CHPs). 

Minister for Social Housing Brad Hazzard said Family and Community Services (FACS) would transfer, on a long leasehold basis, management of approximately 18,000 properties to the community sector to ensure a better experience for tenants in social housing.

On 11 October 2016 the NSW Government introduced the Housing Legislation Amendment Bill 2016 and this was assented to on 25 October 2016. This Act amends the Housing Act 2001 with respect to the entry of concurrent leases. There is a new Section 13A:

13A (Entering into concurrent leases)  ...
(2) On entering into a concurrent lease under this section:  ... (b) the tenant is no longer renting public housing.

Discussion of 'concurrent leases' on The Brown Couch here provides some clarification:

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...

One view is that concurrent leases may be the most sensible way of doing tenanted transfers, given Australian social housing transfer practice has never given tenants a role in determining whether a transfer happens, nor a genuine choice as to who the new landlord will be. They avoid unnecessary confusion (about so-called ‘choice’) and give assurance (that is, that the current tenancy agreement remains on foot). South Australia used concurrent leases in its recent transfers and it appears to have made the process easier for those reasons.

However, it appears LAHC wishes to be no longer be responsible for repairs and maintenance. An 'Industry Sounding' document that was circulated and discussed amongst FACS officials and community housing landlords in early October states that the community housing provider will be responsible for maintenance, while LAHC will retain responsibility for 'structural repairs and strategic portfolio management decisions'.

But if this is a 'leasehold' arrangement, then isn't there still a landlord and tenant relationship between LAHC and the community housing provider? And, because of the broad nature of the definition of a ‘residential tenancy agreement’, wouldn't the LAHC still be responsible for repairs and maintenance under the Residential Tenancies Act 2010? We expect the answer is 'No’, because a ‘concurrent lease’ between LAHC and a community housing landlord may be exempted from the Act’s coverage. See section 156 (1) of the Residential Tenancies Act 2010:

156 Head leases involving social housing providers
(1) A residential tenancy agreement is exempted from the operation of this Act if:
(a) under the agreement, the landlord is a social housing provider (the head landlord) who lets the premises to a tenant who is a social housing provider, and
(b) the agreement is in writing and the agreement states that this section applies to the agreement.

Accordingly, the landlord and tenant relationship between LAHC and the social housing provider can be exempt from the Residential Tenancies Act 2010 by the simple insertion of a clause in their concurrent lease documents. This means that such a landlord and tenant relationship will be covered under the provisions of the Landlord and Tenant Act 1899 until such time as this last Act is repealed (slated for June 2010 (s 1D)), or common law. The specific terms of any concurrent lease will determine who takes responsibility for what. But such details may be considered 'commercial in confidence'. This prompts us to ask, will there be a level of transparency around all of this? We will have to wait and see.

So, coming back to our earlier question about the various roles of the parties ... there will be two landlord and tenant relationships:

Landlord (head-landlord):    NSW Land and Housing Corporation (LAHC)
Tenant:                                  community housing provider

Landlord (head-tenant):       community housing provider
Tenant (sub-tenant):             community housing tenant

For all practical purposes, the landlord will be the community housing provider and the tenant will be the social housing tenant who has signed a social housing tenancy agreement over the premises. The community housing provider is not like a real estate agent who just manages the premises. They will have all the responsibilities of a landlord under the Residential Tenancies Act 2010.