In/formal housing - is more formality the answer?

This is the text of an address I gave to the Housing Theory Symposium 2019 on 30th May. Thank you to the organisers, Dr Jathan Sadowski whose tweet is linked below and Dr Sophia Maalsen, for the invitation. For those who were in the room, there may have been hesitation, repetition or deviation from these written notes which I have not adjusted to reflect.

The 2019 Housing Theory Symposium on in/formalism is in full swing! We have a brilliant keynote session with housing advocates @LeoPatRoss and @shelternsw, with @Planosopher launching a policy report on housing informality and vulnerability. pic.twitter.com/mnnhyHvsv8

— Jathan Sadowski (@jathansadowski) May 30, 2019

Thank you for inviting me to speak today. I’d also like to acknowledge that we have gathered on unceded lands of the Gadigal and pay my respects to elders past and present, and extend those respects to any Aboriginal or Torres Strait Islander people in the room. It’s significant we are meeting in National Reconciliation Week whose theme is Grounded in Truth – a demand for a truth-telling that will allow all the people of this land to move forward together.

Australia has historically and continues to be adept at ignoring the suffering of people who it doesn’t really consider full citizens, and even furthering injustice through that wilful ignorance. While incomparable to the racially motivated horrors of Australian-Aboriginal relations, people who rent their homes – especially at the fringes of the private rental sector – suffer shades of this ignorance and lack of truth-telling – or perhaps, a lack of listening to the truth being told. Like water, and like housing, truth can be hard to grasp.

I’m to sketch out the housing landscape - I’m going to take a pretty broad view of that brief and sketch out some thoughts on how we have forgotten many people who rent their home.

An important part of how we construct informal housing is the support of the state for it. A property owner has the full weight of government seeking to enforce their right to housing, and profit.

Renters live under a patchwork of protections. The most formal tenants have legislated contracts, though with significant scope for customisation and therefore uncertainty and informality. There are some penalties where landlords fail to comply with the terms of the Act, but these are practically never applied.

So while landlords retain the weight of government to enact evictions and recover money, the vast majority of enforcement of the Act by tenants is by tenants. And where they do seek to enforce rights, they are subject to eviction, whether actual or the merely the possibility, in retaliation. The only real moderator of behaviour is the market - the risk of vacancy. An unreliable mechanism to be sure.

This is the best case scenario. Once you leave the Residential Tenancies Act, you may be covered by the Boarding Houses Act. You may be covered by the Australian Consumer Law if your landlord is considered to be in business. You may be covered with very little protection by the Landlord and Tenant Act of 1899. A very small number are still in rent-controlled premises under the amendment in 1948. But many, even tens of thousands are covered by no legislative scheme at all.

But should we simply seek to formalise?

Many of you would be familiar with the Commonwealth Housing Commission quote from the 40s:

“We consider that a dwelling of good standard and equipment is not only the need but the right of every citizen – whether the dwelling is to be rented or purchased, no tenant or purchaser should be exploited for excessive profit.”

We have fallen a long way from the promises of those early housing policies, as imperfect as they might have been. But I wanted to remind us all that much of the work of the CHC was in slum-clearances. This was absolutely the informal housing of its time and it is striking the similarities to much of the informal housing we’re seeing today and I know will be in some of the upcoming presentations.

Public housing at arguably its peak was often built on formalising the informal. While we might say it was necessary because of the conditions of that informal housing, we also should acknowledge that sometimes the people living in the slums weren’t able to access the public housing that replaced it because it was too expensive. Formalising the informal does not always achieve what we might assume.

There’s a few more examples I’d like to touch on in this vein.

A few years ago, if you wanted to travel the world on the cheap you could do a hostel or if you knew people in the area you might be able to couchsurf. Famously, that is the origin story of Airbnb. We are watching as it evolves from an informal activity to commercial and now becoming embedded in the legal system.

Over the last 25-30 years we’ve seen community housing groups evolved from local activists and social workers responding to community needs (and government neglect) to bureaucracies embedded very much in the formal structures, utilising heavy-handed state powers to manage their tenancies and gradually losing the local, responsive nature which was the basis for many people’s support for growing the sector.

Share-housing, what some may argue is the highest form of informal housing in Australia at least, where people report forming lasting friendships and de-facto families as they step in to adulthood, is also becoming commercialised through companies like Cocoon turning the sharehouse life into a curated experience - for a price.

Boarding houses, another long-standing sector which floats between the edges of formal and informal housing, is transforming - real estate agents increasingly manage who enters the house blocking some people who have relied on the sector for years. Emerging models like the micro-apartments known as new-gen boarding houses, build-to-rent, iglu, urbanest, all arguably take different features of boarding houses at different times in their history and seek to formalise them.

But we still have a problem - so how do we address it? I’d suggest that what was missing in 1940s, and is still missing now, in all the housing types I’ve mentioned is centring the needs and desires of people living in these homes. More than infrastructure, housing is an essential service. Like water, electricity, government has an obligation to ensure housing gets to people where, when and how they need it.

Like water, if we do not get the supply of housing right, it will get to people in uncontrolled ways, providing too much to some and preventing others from getting enough. Along the way, some of it might get tainted and become unhealthy, unsafe. There will always be luxury water, sold in little bottles. But if we ensure cheap tap water continues to flow then those who need it will never go thirsty.

Theresa May shows Gladys the way on eviction reform

Theresa May’s government has shown that supporting a fairer, balanced renting system is possible for conservative governments.

Last week May and Housing Minister James Brokenshire announced that legislation was to be written to end unfair ‘no grounds’ evictions. Landlords will no longer be able to end tenancies either at the end of a fixed-term or outside a contract period without giving any reason at all. Instead, there will be a list of reasonable grounds where although the tenant has not breached the lease, the landlord will be able regain possession of the property.

Reasonable grounds will be determined through consultation but may include a landlord wanting to move back in to the property or carry out major renovations. A landlord or a new owner will still be able to regain possession where the tenant has breached the lease terms. 

These are nearly identical proposals to the reforms sought in Australia by the state-based Make Renting Fair campaigns and tenant representative groups. Progressive parties in most states as well as New Zealand have already accepted the need for reform. Victoria has largely implemented the change and both Queensland and ACT are looking likely to move soon. With the UK now joining the 21^st century, Australia will soon be the only Commonwealth country still using ‘no grounds’ evictions despite inheriting the concept from England.

In NSW last year Premier Berejiklian’s government declined to implement the reform. But perhaps in a new term they can take inspiration from their British counterparts.

Prime Minister May said in her announcement that the reform will give tenants ‘the long-term certainty and the peace of mind they deserve’. Minister Brokenshire also talked about the stability that change will bring.

Their language shows that neither side of politics should feel apprehensive about making things fairer for tenants. Conservatism in the Menzies tradition was about giving people a stake and a sense of ownership in their community. Now tenants are the forgotten people - refused the opportunity to feel the connection because of the instability caused by policies like no grounds evictions.

Current Energy and Environment Minister Matt Kean MP indicated his willingness for reform as Innovation and Better Regulation Minister in 2017 when he told the Herald that "no grounds evictions, retaliatory evictions, all these things are currently undermining renters' rights in NSW”.

However later Kean noted that the government did not feel there was sufficient evidence for change. So what evidence did the British government rely on? The primary reason the government has been giving is that no grounds evictions have repeatedly been found to be the leading cause of homelessness amongst families. 

In New South Wales, we have experienced rapid growth in homelessness – 37% in 5 years, much faster than any other state – and the Premier has made a commitment to reducing street homelessness by 50% in just a few years. Ending no grounds evictions would make that task significantly easier.

Even agents in the UK have begun to realise that blocking reform leaves them on the wrong side of history - with one, David Alexander,  describing the reform as "long overdue" and noting that industry resistance to reform is often without merit. Referencing Scotland's reforms to no grounds evictions in 2016 and reform of fees tenants could be charged in 2012 Alexander said "despite some opposition to these changes at the time they have all been introduced and the [private rental sector] has not collapsed or disappeared."

Giving tenants a greater sense of belonging to their communities, and preventing homeless, with no impact on the state budget? Theresa May has shown Gladys Berejiklian and her new Innovation and Better Regulation minister Kevin Anderson one way to make a big statement in her first term as elected leader of the state. The more than 2 million tenants across this state also deserve the stability and piece of mind now being promised to English tenants.

Do politicans vote with their property interests?

With recent news about Government ministers opposing no grounds reform, we thought it timely to look at whether politicians' votes are affected by their property interests.

Back in August 2014 Dallas Rogers wrote for The Conversation about how property-owning politicians might influence policy. He said:

It is important to note that research doesn’t show a causal link between property holdings and decisions of politicians. But it would be imprudent to assume prima facie that the property holdings of Australian politicians do not play a role in their political thinking, especially as this thinking relates to housing, taxation or even superannuation policy.

In April 2017 both the ABC and The Sydney Morning Herald ran stories about Federal politicians who owned property, many being landlords in the private rental market. They found that Australia's 226 federal MPs declared on the register of interests that they own 561 properties. You can view the ‘Register of Members Interest’ for Federal pollies here. These stories ran at a time when housing affordability was receiving daily coverage in the media and policies on negative gearing and capital gain tax were very much in the public spotlight. Now that these issues appear firmly cemented in the public debate, we might expect to see more articles in the run up to the federal election.

Anyone can check what properties NSW state politicians have disclosed by trawling through the ‘Register of Disclosures by Members of the Legislative Assembly as at 30 June 2018’. The equivalent for the Legislative Council is still hard-copy only but available to look through at Parliament House. Here is a summary. We have excluded two MPs who have not been required to make disclosures since they took their seats.

NSW Parliament
133 Members of the NSW Parliament own 256 properties; average number of properties owned is 1.9 and the highest disclosed is 10. 42 are landlords of residential properties and a further 10 are possible landlords of residential properties: that is, up to 39% of MPs are landlords of residential premises.
Legislative Council	Legislative Assembly
41 Members of the Legislative Council (excluding 1 new MLC) own 69 properties; average number of properties owned is 1.7 and the highest number owned is 6. 11 are landlords of residential properties and a further 6 are possible landlords of residential properties: up to 42% are landlords of residential premises.	92 Members of the Legislative Assembly (excluding 1 new MLA) own 187 properties; average number of properties owned is 2.0 and the highest number owned is 10. 31 are landlords of residential properties and a further 4 are possible landlords of residential properties: up to 38% are landlords of residential premises.

Party Affiliation
Liberal Party	49 MPs average 2.1 properties and 39% are landlords or possible landlords of residential premises.
National Party	23 MPs average 2.3 properties and 48% are landlords or possible landlords of residential premises.
Labor Party	46 MPs average 1.6 properties and 33% are landlords or possible landlords of residential premises.
The Greens	6 MPs (excluding 1 new MLC) average 2.2 properties and 83% are landlords or possible landlords of residential premises.
Shooters, Fishers and Farmers Party	3 Shooters, Fishers and Farmers Party own one property each. None appear to be a landlord of residential premises.
Christian Democratic Party	2 MPs own one property each. Neither appears to be a landlord of residential premises.
Animal Justice Party	1 MP owns one property. They do not appear to be a landlord of residential premises.
Independents	3 Independents (excluding 1 new MLA) average 2.0 properties and two are landlords or possible landlords of residential premises.

Unfortunately the information above is not the full story. There are possibly properties we don't know about: undisclosed because they are held by companies, trusts and self-managed super funds. Some, but not all, MPs do declare such properties.

Others keep them out of the public gaze through the disclosure rules. For example, it is clear that properties owned by the spouses of politicians don't generally need to be disclosed, but it is likely to cause some change in the way a politician votes. Whilst most MP’s don’t declare this information because it is discretionary, some (from across the political spectrum) do. At the same time, some assert that when deciding whether they need to declare a property 'income' is interpreted to mean 'net' income - which may end up meaning a negatively geared property held by a trust never needs to be declared at all.

Does owning property affect the way a politician votes?

In NSW we put this question to the test in September and October when Parliament was voting on the Residential Tenancies Amendment (Review) Act 2018. 
 

A vote in the NSW Legislative Council was very close to passing an amendment abolishing ‘no-grounds’ evictions. That vote ended up dividing along party lines with Labor, the Greens, and the Animal Justice Party supporting change and Liberal, National, Shooters and Fishers and Christian Democratic Party voting against change. The equivalent vote in the Legislative Assembly also divided on similar lines, with the three Independent MPs joining with Labor and the Greens. Counter-intuitively this means the party with the highest percentage of landlords amongst MPs, the Greens, voted for change.

It also means landlords did not uniformly oppose fair renting laws through ending no grounds evictions.  In fact, more than a third (18 out of the 42) of voting landlords in NSW Parliament voted to end unfair evictions- only a little less than the proportion of MPs overall.

So what is going on? We think the nine news story demonstrated it clearly - these decisions are made before the vote, inside parties, and it is there that any influence occurs. We know some within the Liberal and National Parties support ending unfair no grounds evictions - but they were overruled. This is why processes around conflicts of interest are so important!

But on the bright side we also know some landlord politicians do choose to vote for fairer renting laws. We might be optimists, but we also think this means our parties should question any assumption that landlords will never support a party that acts fairly. Just like people who rent their home, we believe there are a range of views. We are confident that, just like some politicians, some voters who are landlords can see past their own particular financial interests and support a fair, balanced renting system. Whether it is their family, their friends, or other members of their community - there is someone who is negatively effected by unfair evictions remaining as they are.

What you need to know about renting reform in NSW: Part 3

We're back with more information about the Residential Tenancies Amendment bill which has passed and is now an Act. It will take effect at a so far unannounced date in the future - presumably before the election in March. In this series of posts, we examine what is proposed and what the changes will mean for renters in NSW. If you haven't already, check out Part 1 and Part 2. Many of these proposals are good, or have potential to be so. Whether they strike the right balance will often depend on whether unfair 'no grounds' evictions remain in the Act. Others have short-comings which will need to be revisited in the future.

Condition Reports

Currently the Act mandates that a landlord must give the tenant two copies of the condition report before or when the tenant signs the residential tenancy agreement. The tenant must then complete and give one copy of the condition report to the landlord or landlord’s agent not later than 7 days after receiving it.

The proposal before government is that the landlord must, before or at the time the tenant signs the residential tenancy agreement, give to the tenant two copies, or one electronic copy, of the completed condition report.

This is a positive change as it more clearly places a burden on the landlord to provide the condition report. The report's purpose is largely to support a landlord's claim on a tenants bond.

Information Statements

Currently the Act does not mandate that the landlord sign any statement acknowledging that they are aware of and understand their rights and obligations as a landlord.

The proposal before government is that the landlord or landlord’s agent must not enter into an agreement unless they have signed an acknowledgment on the agreement that the landlord has read and understood the contents of a rights and obligations information statement that sets out the landlord’s rights and obligations under the Act and any other Act or law in relation to the proposed residential tenancy.

We support this amendment - though are skeptical of its effectiveness. A better approach to improving landlord awareness of rental laws may be placing more obligations on real estate agents to prevent their landlord from breaching the agreement or an education system such as Utah's 'Good Landlord' program and a proper registration program to recognise that landlords are providing an essential service, and need to be fit and proper persons for such an important role.

Rent Receipts

Currently the Act is silent on the use of email as a method of supplying rent receipts. In this absence the Electronic Transactions Act 2000 may apply.

The proposal before government will allow rent receipts for rent paid by cheque to be sent by email to an email address specified by the tenant.

We support this amendment. Our only concern is that tenants may feel pressured to supply an email that they rarely access. This will need to be monitored.

Smoke Alarms
Currently the Act is silent on smoke alarms other than being captured in a reference to a landlord’s statutory obligations relating to the health or safety of the residential premises. All residences are required by the Environmental Planning and Assessment Regulation 2000 to have smoke alarms installed. Smoke alarms are likewise mentioned in the Standard Form Agreement as being a statutory requirement for all residential premises.

The proposal before government is that repairs to smoke alarms be carried out as a matter of urgency. The Manner and time frame by which these repairs are to be carried will be prescribed in the regulations. Breach of this section may result in a maximum 20 penalty units. A tenant can undertake urgent repairs to smoke alarms and be reimbursed accordingly as per the regulations.

This amendment came out of a coroner's report into the tragic death of a child. We support this amendment although we are yet to see the regulations. We do not envisage any problems with the drafting of the regulations.

Employee & Caretaker Evictions

Currently the Act treats the eviction of tenants generally equally - 'at fault' evictions occur because of the tenants behaviour, not because of any personal characteristic. 'no fault' evictions occur because of some change within the landlord or the property, and not because of any personal characteristic of the tenant.

The proposal before government is to treat employees differently to other tenants. Tenancy agreements with tenants who are on periodic agreements who also happen to be employees or caretakers (as defined in section 9 of the Act) will be able to be terminated with as little as 28 days notice. It is intended to assist a landlord employer more easily evict their tenant employees and largely justified on a misunderstanding of the range of ways a section 9 agreements can be formed - the amendment was pushed heavily by the farming industry, particularly aimed at seasonal employees, but the implications are much broader.

We do not support this amendment. Employers ending employment agreements and tenancies should be able to plan around the transition. Employee arrangements are broader than just farms, and this will cause unfair outcomes. The arrangements are not fixed contracts with a forseeable end date which mean the tenant does need sufficient time to find a new home – it is not clear why they are deemed to deserve less than the other tenants. If anything they should be afforded extra time to move out given that they are potentially facing not just homelessness but unemployment.

Our recommendation was and remains that employee & caretaker evictions require the same notice period other tenants do - 90 days in a periodic agreement. There has been no reason given why landlord employees can't work around this period - it appears to be pandering to poorly run businesses rather than legitimate issues with the notice period.

Expansion of Rent Arrears Process
Currently the Act treats rent arrears differently to other breaches of the agreement. You must be in breach of the agreement for 14 days before a notice can be served, and generally if you 'rectify the breach' (buy paying the rent owed) before you are evicted, you can prevent that eviction from occurring. This is a sensible difference which gives tenants more time to fix the problem, and means landlords are less likely to suffer rent arrears losses.

The Act is changing to also include water and electricity charges in this different scheme, and we think this is sensible. Rent arrears and water charges often go hand in hand, but currently, if a tenant is given an eviction notice for owing $1000 for rent and $10 for water, and pays off that $1010 they will still be evicted - under this change, they will not.

We think this is a good change however, the rent arrears process currently has a big flaw in it which needs to be corrected. Where a person has a past history of rent arrears, the landlord can ask the Tribunal not to allow them to stay even if they do pay off the current rent arrears. Originally this was introduced to prevent tenants paying 'on the court house steps' and playing games with the system. Unfortunately it was broadened to mean that even minor, and quickly remedied rent arrears can add up to an eviction. It should be amended to apply only to circumstances where tenants wilfully paying late as originally conceived.

Asbestos & Termination

Currently the Act is silent on asbestos other than a being captured in reference to a landlord’s statutory obligations relating to the health or safety of the residential premises. Under clause 458 of the Work Health and Safety Regulation 2011, if more than 10 sqm of bonded asbestos sheets, or any significant amount of loose or crumbling asbestos, is to be removed from the premises, the removal must be conducted by a licensed removalist.

Once these amendments take effect, tenants in properties that have been listed on the Loose Fill Asbestos Insulation (LFAI) Register during the term of the agreement or listed on the Register prior to the agreement being entered into and that fact was not disclosed to the tenant may terminate the tenancy early without compensation to the landlord under section 100 of the Act.

The LFAI system already allows for some compensation from government to landlords, but prior to this amendment tenants can find themselves trapped in potentially unsafe environments with unfair break costs. This is a sensible amendment.

Expansion of use of Rental Bond Interest Account

Part of the deal when the Rental Bond Board was created and tenants bonds started being held in trust there was that the money would be spent on the renting system and particularly in the interests of tenants. Currently the Act mandates that the Secretary may make a grant or loan, on the  recommendation of the Board and with the approval of the Minister, from the Rental Bond Interest Account for the following purposes:
(a) establishing and administering tenancy advisory service,
(b) schemes for the provision of residential accommodation,
(c) education about tenancy laws and the rights and obligations of landlords of landlords and tenants,
(d) research into matters relevant to the relationship of landlord and tenant,
(e) other activities for the benefit of landlords and tenants.

The amendment will allow the Secretary to also make a grant or loan from the Rental Bond Interest Account for 'other consumer protection purposes.'

We have not been given any further information about what, if any, consumer protection services/products the Fair Trading envisage could be funded from the Rental Bond Interest Account. We do not support bond money being spent on anything other than the renting system – otherwise, bonds would be better left in tenants pockets.

Database Listing Offences
Currently the Act mandates that offences can be penalised by fine or imprisonment but is never or very rarely enforced to be act as an effective disincentive.

The proposal before government creates two new offences:

(1) A maximum penalty of $2,200 for a landlord or landlord’s agent who lists personal information about a tenant or co-tenant in a residential tenancy database if that tenant or co-tenant terminated an agreement in circumstances of domestic violence.

(2) A maximum penalty of $1,100 for a database operator who charges a fee for giving a copy of personal information that is in the residential tenancy database to a person who is the subject of the personal information.

We support this amendment on the proviso that there is effective use of enforcement powers from Fair Trading. Currently enforcement through the use of penalties rarely occurs.

Enforcement generallyWhile not an amendment itself, it is worth a note that a number of amendments have been to add new penalties to the Residential Tenancies Act 2010, with the intention of regulating bad behaviour by landlords. We have mentioned a few times that the rate of enforcement is very low, and this causes us scepticism about the effectiveness of this strategy - but how low is it?

Over the two years 2016-17 and 2017-18, there were more than 5200 complaints by tenants. Around 1000 allegations of offences were investigated and found to have breached the Act, with the vast majority of those being given either a warning or "education". Just 24 people were fined, at an average fine of less than $500. So very few instances of verified breaches of the Act resulted in enforcement action - and very minor enforcements at that.

We have encouraged the Minister and NSW Fair Trading to consider the message that this low level of enforcement sends to landlords and real estate agents who do the wrong thing - that chances are you'll face no consequences for breaking the law. On the other hand tenants are routinely evicted for not following their obligations. Is that a balanced approach?

If the Act is to include these penalties, then we need to have a rigorous and fearless approach to applying them, otherwise their ability to regulate behaviour is unacceptably weakened. Tenants are mostly pushed to enforce the law themselves - but at great personal risk of jeopardising both their current and future homes.

NSW is close to ending unfair evictions - how and why we should do it for the economy

This week, the NSW Legislative Council will vote on amendments to the Residential Tenancies Amendment (Review) 2018 bill to decide whether to keep unfair 'no grounds' evictions, or replace them with 'reasonable grounds'. Here's what they'll be arguing about.

The ALP and the Greens both have proposed amendments aimed at the issue of 'no grounds' evictions. The ALP amendments restrict s84 and s85 to a list of reasonable grounds that would be added by regulation. This allows for a consultation process to work out what that list should be.

The Greens amendments approach the issue differently. Their amendments allow for two reasonable grounds - an owner or their close family moving in, and significant renovations - as well as allowing for a landlord to nominate any other reason. This any other reason just needs to be one that requires the use of the premises for something other than a residence - for instance, perhaps they want to convert it into a bed and breakfast - for a six-month or more period.
The Greens amendments also address the issue of landlords dishonestly using a reasonable ground by including a section on 'wrongful evictions' with penalties for the landlord and potential compensation for the wrongfully evicted tenant, and strengthens the retaliatory provisions.

It will be up to the cross-bench to say yes or no to making renting fair. Mark Pearson of the Animal Justice Party has an amendment aimed at allowing pets in rental property and is most likely to support making renting fair.

If both the Christian Democratic Party and the Shooters, Fishers and Farmers Party vote for an amendment that the ALP and Greens also support, then the amendment will pass. The Christian Democratic Party has already flagged their support for addressing the issue, saying that the government reforms fall short for NSW's most vulnerable if ' no grounds' evictions aren't addressed. The Shooters, Fishers and Farmers Party is yet to declare its intentions. These cross-benchers have received more than 1100 emails from people supporting the Everybody's Home and Make Renting Fair campaigns in the last few weeks. These emails come from all across NSW and have really shown how much support these changes have.

We already know older women, and children are being harmed by the ongoing existence of unfair evictions, but there's another big group who are missing out - tradies.

The Unsettled survey last year found that 30% of tenants were living with ongoing maintenance issues, and 8% of had outstanding urgent repairs. The Curtin survey from last week similarly found 35% of properties with internal maintenance issues and we know many tenants don't report repairs because they are scared and many more because they know the work just won't get done. This is costing the NSW economy a significant amount.

There are around 850,000 bonds in the Rental Bond Board. If we apply those outstanding repairs figures, assume very conservative figures of just $500 per regular repair and $1000 for urgent ones that's almost $200million that is currently being held back from tradies' wages, and parts retailers, distributors and manufacturers and flowing on to the broader economy. Some of these repairs will eventually be done, but many won't, and the sooner the government enables the work to be done, the sooner the broader community will feel the benefits. Don't even get us started on unproductive days off work and longer commutes which harm the economy in a number of ways. Unfair evictions hurt us all.

If Parliament doesn't make renting fair tonight, the outstanding repairs, the fear and anxiety, will continue - but now instead of a long-standing piece of legislation it will have been an active vote by Members of Parliament to have it remain so.

We continue to have faith they will make the right decision for the people of NSW. It is most likely the amendments will be debated tomorrow before lunch - we'll be watching!

What you need to know about renting reform in NSW: Part 2

We're back with more information about the Residential Tenancies Amendment bill and what it will mean for renters in NSW. If you haven't already, check out Part 1 and Part 3. Many of these proposals are good, or have potential to be so. Whether they strike the right balance will often depend on whether unfair 'no grounds' evictions remain in the Act. Others have short-comings which will need to be revisited in the future.

Disclosure of information to tenants

Currently the Residential Tenancies Act 2018 mandates that a landlord must not make false representations, must disclose any planned sale and mortgagee repossession actions and give tenants an information statement before they enter into an agreement.

The proposal before government is two-fold. First there is an expansion of the information to be provided so that prospective tenants of strata schemes be given a copy of the by-laws for that scheme and also be advised if a strata renewal committee has been established for the scheme before entering into a residential tenancy agreement. We welcome this proposal.
The second is that a tenant can vacate without penalty if a landlord breaches section 26 - they can either serve a notice of termination and vacate, or seek orders ending the tenancy early from the Tribunal. However, a tenant will not be able to seek any compensation as a result of the landlord's failure to disclose information.

Our recommendation

Our recommendation is that all of section 26 (proposed and existing) be made a term of every agreement and that tenants should be able to seek compensation for the landlord’s failure to disclose in the circumstances outlined in the existing legislation, i.e for false representations, disclosure of sale or mortgagee actions and information statements to be given to tenants before the tenant enters into the agreement, as well as in the above proposed circumstance in regard to strata.
This must be made into a term of every agreement in order for it to have any meaningful impact. Our experience is that currently the disclosure requirements are not well adhered to and where non-disclosure is discovered, tenants often have little option but to accept it. As it stands, whilst a tenant can vacate without penalty if disclosures do not occur, they are unable to seek compensation for the landlord’s failure to disclose. The potential losses to the tenant could be considerable and include – moving costs, reconnection fees and any other losses that would not be recovered under the current proposal.

Access generally by landlord to residential premises without consent

Currently there is no reference in the Residential Tenancies Act 2010 to landlord taking photographs or making visual recordings of tenants’ homes for any purpose. To date the standard advice to tenants has been that if a tenant requests that a landlord desist from taking photographs and they ignore such a request, then the landlord may place themselves in breach of section 50(2) ('Tenant's right to quiet enjoyment') of the Act and face a penalty of up to $1,100 if prosecuted in the Local Court. They may also face a claim for compensation awarded to the tenant in the NCAT.

The proposal before the government is that the landlord can access the residential premises without consent for the purpose of taking photographs or a video recording for the purposes of advertising the residential premises for sale or lease no more than once in the period of 28 days preceding the commencement of marketing the residential premises as long as the tenant is given reasonable notice and a reasonable opportunity to move their possessions out of the frame of the photo or visual recording.
The landlord or agent can publish the photos taken with the tenants written consent - the tenant cannot unreasonably withhold that consent. If in the landlord or agents opinion the tenant refuses consent unreasonably, they will either - apply to NCAT for orders requesting consent be given, evict the tenant for the breach of unreasonably withholding consent, or if they are unsure (or can't be bothered) of whether it was unreasonable, evict the tenant for no grounds. Even tenants with strong reasons to withhold consent for publication will be in a vulnerable spot.
If the landlord or agent goes ahead and publishes anyway, there is a $2200 fine that may be applied. However under current practices Fair Trading is very unlikely to apply such a fine. For the entirety of 2017-18 Fair Trading issued penalties to just 9 people for 10 offences under the Residential Tenancies Act. This lack of enforcement operates to undermine the effect of penalty provisions in the Act.

Our recommendation

We do not support this proposal as it discourages negotiation between the parties and may result in possessions that cannot be reasonably moved out of frame being photographed. Whilst the proposal does take survivors of domestic violence into consideration and allows these tenants to withhold consent in circumstances where domestic violence exists, the definition of domestic violence may be too tight. Even for survivors of domestic violence the proposed system will mean that tenants will most likely need to apply to the tribunal for protection and may not be able to prevent publication of identifiable photographs.

Guidelines relating to reasonable times for repairs

Currently there are no guidelines relating to reasonable times for repairs. Whilst urgent repairs are defined there is no timeframe for these or general repairs and maintenance to occur other than that landlords are required to act with reasonable diligence. ‘Reasonable diligence’ is not defined.
The proposal is to add guidelines for reasonable time frames for repairs to occur. It is not known yet exactly what format but it is likely it will determine time frames based on the seriousness of the needed repair - unsafe electrical work will be a shorter time frame than aged paintwork.

Our recommendation

In the absence of any proposed guidelines it is difficult to comment other than to say that this proposal has the potential to be a very good change if the guidelines are done well and reflect the real time frames for a landlord acting with diligence. If they are not done well the proposal has the potential to be harmful to tenants as it will actually delay required repairs.

Fair Trading inspections and rectification orders

Currently many of the complaints to NSW Fair Trading about renting are in relation to repairs. While Fair Trading can take the complaint and talk to the landlord or real estate agent, there is no mechanism that allows for Fair Trading to either inspect the premises or tell the agent they must carry out the necessary work.

In a nutshell the proposal before the government is that a landlord or tenant can make an application to Fair Trading to investigate a concern about the premises. For landlords this will be because they believe the tenant has caused damage to the residential premises. For tenants, whether the landlord has breached their repairs and maintenance obligations under the agreement. A landlord rectification or a tenant rectification order can then be ordered with time frames for work to be done. This Fair Trading issued order will be used as the basis of an NCAT order for non-compliance.

Our recommendation

This has the potential to be a very good change but operational and funding decisions will determine if the potential is realised. There is a risk of the scheme draining other parts of the renting system by taking funds that could be spent on improving other aspects.
Several years ago Fair Trading implemented a dispute resolution system which has had positive results in relation to repairs - it is amazing how many agents will ignore a tenant asking for repairs, but when the same information comes from the regulator, it is taken seriously. However there is still a number of major hurdles for tenants, including the ever-present threat of eviction.

Fair trading inspections and rectification orders could particularly have good implications for social housing tenants who are not as susceptible to retaliatory evictions but increasingly face other barriers to enforcing their rights - such as limited resources and energy.
Likewise, the new mechanism could have the potential to free up the time of invariably overworked tenant advocates in under-resourced and underfunded services who often end up providing the time and resources to run such cases.
The scheme would be much improved if rectification orders were kept in a register, and were binding on the landlord even if the current tenant leaves. Currently tenants move in to premises with no reliable information about the condition of the premises. The condition report and a visual inspection is rarely a good guide to the real condition and history of the premises. A searchable register of rectification orders made regarding a property would be an authoritative and simple way to begin resolving this information asymmetry.

Minor alterations

Currently the Act provides for tenants to make alterations with the consent of the landlord. A landlord cannot unreasonably withold consent for alterations of a minor nature. These types of alterations are not defined.

The proposal is for regulations to prescribe the kinds of alterations that are of a minor nature in relation to which it would be unreasonable for a landlord to withhold consent.

Our recommendation

Clarifications and the signal sent from government are potentially a good step but it does not substantially change the current system. We await consultation on the changes, though there are some obvious issues which need to be included.
The system would be improved further by allowing tenants to make the minor alterations without needing to first seek landlord's permission, but rather give the landlord opportunity to state what is inappropriate. For instance, an improved disclosure statement or condition report which allows a landlord to state that a particular wall is not appropriate for nails or screws of more than a certain size. Another alternative is for tenants to give a notice of intention of alteration rather than a request, where a landlord must raise an objection for some good reason within a reasonable time frame.

Striking the right balance on evictions in NSW

On the day of debate around the proposed amendments to Residential Tenancies Act 2010 the Hon. Matt Kean, Minister for Innovation and Better Regulation, made a number of statements that formed the basis of an article in the Sydney Morning Herald’s Domain.

In this article, titled, ‘Better Regulation minister Matt Kean hits back at rental law critics’ by Tawar Razaghi the Minister made two statements we'd like to correct.

1. “The data suggests that over 95 per cent of people were not concerned about no-grounds terminations.”
The data the Minister is referring to is the Unsettled report, published by Choice, National Shelter and the National Association of Tenants' Organisations (of which TUNSW is a member). We say it suggests no such thing.

There is very little data on the broader question and this is a big part of the problem for public policy debate. The government also has a proposal we put forward to implement a way to measure eviction rates and the reasons for evictions through the bond claims system, using a simple 3-question survey on the claim form, and we encourage them to take it up.

While the primary fear of renters who took part in the Choice research was rent increases (which is hardly a surprise given the number of tenants currently in rental stress), the secondary fear is not specifically identified in the data but it is there, if you look hard enough:

“Worryingly, we found that renters with more experience in the market were less likely to complain when something goes wrong which illustrates the entrenched culture of fear among renters. This is all the more of a concern when you consider the rising number of long-term renters across Australia,” said Ned Cutcher, then the National Association of Tenants’ Organisations spokesperson.

There is new research from our evictions survey which we have distributed to parliamentarians today that show that the rate of concern is much higher. Here's a sneak peek:



This now sits alongside the lived experience of tenants and academic expertise recommending a course of action to replace no grounds evictions with a reasonable grounds system. Minister Kean and the Government should accept this evidence.

It is clear that the single most important reform to ensure that the renting system is fair and that the right balance has been achieved is by ending no grounds evictions. The parliament should do that now.

2. “I respect the sacrifice that mum and dad investors have made to purchase an investment property, and we’re not going to make it impossible for them to move into their home if they wish to do that.”


Firstly, if a mum and dad investor has purchased an investment property then this is not their home. They already have a home or principal place residence. The concept of private property rights is a bundle - one of which is the right to occupy and use the premises as a home. That right was transferred to the tenant through the lease. So their investment property is somebody else’s home, and removing that person from their home shouldn't be done lightly.

Nonetheless, if an property investor ceases to have another home and needs to make use of their investment property as a home, then the proposed amendments will allow them to do this. One of the Tenants’ Union’s proposed expanded list of grounds for termination includes ‘premises to be used by the landlord or a family member as principal place of residence’. This is a feature in the ACT and Victorian reasonable grounds lists and appears in many international rules as well.

Secondly, respectfully, Minister Kean, mum and dad investors can also be mum and dad renters. The two are not mutually exclusive. But even those mum and dad investors who are not simultaneously mum and dad renters are not necessarily opposed to the removal of no grounds terminations.

Another sneak peek in the evictions survey - 55% of landlords who took part in the survey agree that there should be a reason given when ending a tenancy. As Russell told our recent NSW Parliamentary event:

So the Hon. Minister Matt Kean we implore you to, in your own words, “go back to the drawing board on no-grounds evictions” as the data and evidence is most certainly there to support removing it. Work with Parliament to strike the right balance and make renting fair!

Renting laws debated in parliament

Yesterday was a huge day for renting law in  NSW.

At lunch together with Everybody's Home, we organised an event today at Parliament bringing together renters, housing academics, campaign supporters, and MP decision makers.

We heard from Keith – a renter who has lived in seven homes over the last ten years.

"I am sick and tired of being forced to move. I’ve figured out that each time we move it has cost us around $3000. No grounds evictions have totally disrupted my family’s life."

Dr Emma Power spoke about her research on the experiences of older women renters and the hardships they face. Russell Rodrigo, a property investor, spoke about how the proposed reforms are actually in landlords' interests - because they will foster better relationships and improved stability.

Russell, Dr Emma Power, Dr Chris Martin and Keith Young.

Then at around 5pm the fun really started. The debate started for the Residential Tenancies Amendment. As expected, the Government spoke to their bill and emphasised the positive steps it is taking.

Labor spoke strongly for the need to end unfair no grounds evictions and made clear that while there other issues in our renting system, that getting the fundamental fix of ending no grounds evictions would be the focus of their work on this bill.

Jenny Leong for the Greens moved 20 amendments to the bill raising a number of issues that so many tenants raise. Her amendments ranged from big ticket items like pets and rent increases, to more focussed improvements to the current bill, like a number of additional minimum standards.

The three Legislative Assembly Greens were joined by Alex Greenwich of Sydney to vote and support these amendments. With independents Joe McGirr of Wagga Wagga and Greg Piper of Port Macquarie. joining them for some issues, like supporting an end to blanket bans for tenants to keep pets.

Labor did not support these various amendments in the current bill, but made several commitments throughout the night to return to many of these issues and we look forward to discussing those issues with them soon.

Once the Legislative Assembly completed their deliberations, the bill was immediately raced over to the Legislative Council. The parties made generally the same points again. But significantly, Paul Green speaking for the Christian Democratic Party stated:

We believe this bill, for the most part, strikes a good balance... However, I encourage the Government to acknowledge the challenges faced by tenants regarding no grounds termination and implore it to approach such terminations based only on reasonable grounds. I have contacted the Government about this matter but is chosen not to go that way. I give an early indication that we will listen very carefully to consideration of amendments moved by Labor and The Greens in Committee. We feel that we are compelled to do so, given the Government has fallen short of supporting some of the State's most vulnerable people.

We applaud the CDP for making this statement. It reminds us all that good law-making is the responsibility of all within Parliament. A commitment to that responsibility is not confined to any one party, or any one approach. 

But with that, the debate was adjourned - it will be back on October 16. This is a crucial time for renters rights in NSW. Get involved with the Make Renting Fair campaign to hear about how you can help bring this thing home.

What you need to know about renting reform in NSW: Part 1

This week saw the introduction of the Residential Tenancies Amendment law reform. Overall it attempts some very positive things, with only a few parts we quibble with. Unfortunately it's effectiveness will be let down as it does not address the fundamental imbalance in our renting laws caused by unfair 'no grounds' evictions. We support the bill being passed, but with amendments to ensure the reforms can do their job. The Make Renting Fair campaign is asking supporters to email key members of the Legislative Council to ensure the reform is effective and fair.

But let's take a closer look at the bill and what it will mean for renters in NSW. Here's five of the biggest changes. We'll return with the remainder of the proposals in Part 2 and Part 3.

Domestic Violence provisions

We will leave this to our phenomenal colleagues at Women's Legal Service who have led the way on these reforms. They said in their media release the following.

These are the ways the Bill will make a significant difference in the lives of domestic violence  victims-survivors:

Victims-survivors of domestic violence will be able to terminate their tenancy immediately without penalty when they provide a domestic violence termination notice to the landlord and each other co-tenant.

The notice must also include evidence of domestic violence which includes:

a domestic violence order, or
a personal protection injunction under the Family Law Act, or
a copy of a certificate of conviction in proceedings against the relevant domestic violence offender for the domestic violence offence, or
a declaration by a ‘competent person’ as prescribed by the regulations. A ‘competent person’ includes only medical practitioners.

Perpetrators of damage to property will be liable for that damage. A victim of violence or another tenant who is not the relevant domestic violence offender will not be liable for damage to residential property caused during the commission of a domestic violence offence.
A victim-survivor of domestic violence who terminates their tenancy by providing a domestic violence termination notice cannot be listed on a residential tenancy data[base] list.

While we would have liked the reforms to have gone even further with an expanded list of ‘competent persons’ beyond just medical practitioners being able to provide evidence of domestic violence through a declaration, the reforms included in the Bill are a major step forward and we believe will make a significant difference in the lives of domestic violence victims-survivors and their children.

We at TUNSW agree with the Women's Legal Service.

Minimum standards

Currently landlords are required to provide premises in a state that is 'fit for habitation'. However, what constitutes 'fit for habitation' is not defined and it can be quite hard to work out what it does mean.

The proposal before government is a start on clearly defining what fit for habitation might mean. The government's proposal is a good first step and includes some features which moves to reflect a modern understanding of fit for habitation.

Premises must be structurally sound, which means if the floors, ceilings, walls, supporting structures (including foundations), doors, windows, roof, stairs, balconies, balustrades and railings:

(a) are in a reasonable state of repair, and
(b) with respect to the floors, ceilings, walls and supporting structures—are not subject to significant dampness, and
(c) with respect to the roof, ceilings and windows—do not allow water penetration into the premises, and
(d) are not liable to collapse because they are rotted or otherwise defective.

Other requirements are to ensure premises:
- have adequate natural light or artificial lighting in what we might call living spaces, such as bedrooms, living rooms and kitchens.
- have adequate ventilation, and
- are supplied with electricity or gas and have an adequate number of electricity outlet sockets or gas outlet sockets for the supply of lighting and heating to, and use of appliances in, the premises, and
- have adequate plumbing and drainage, and
- are connected to a water supply service or infrastructure that supplies water (including, but not limited to, a water bore or water tank) that is able to supply to the premises hot and cold water for drinking and ablution and cleaning activities, and
- contain bathroom facilities, including toilet and washing facilities, that allow privacy for the user.

Our recommendation
In order to really create homes which are fit for habitation we also recommend including requirements to ensure there are:
- adequate cooking or food preparation facilities,
- adequate laundry facilities,
- adequate waterproofing in bathroom, kitchens, laundry areas,
- free from infestation by vermin, mould or other biotoxins,
- adequate insulation and weatherproofing.

Many people are also often surprised that there is no obligation to ensure premises are safe apart from things which are legislated elsewhere like smoke alarms. This could be fixed up in a number of ways, but one of the simplest is simply to insert safe into the current obligation (section 52) so that it become: “A landlord must provide the residential premises in a reasonable state of cleanliness, safe, and fit for habitation by the tenant”.

As a first step, parliament should pass this current proposal but we would support amendments to the bill to make it even stronger and more effective.

Fairer 'break fees' for leaving tenancies early

Occasionally tenants find that for work, personal or other reasons they can't maintain the contract until the end of the fixed term. When they leave, there is compensation payable for breaking the contract early - known as 'abandonment'. The current system is a confusing, two-tiered one which often has no relationship with the actual costs to the landlord of the tenant leaving early.

Currently landlords choose one of two compensation systems. They can choose a 'break fee' of either 6 weeks or 4 weeks (depending whether abandonment occurs in the first or second half of the agreement) as a fixed compensation.  Alternatively they can rely on a compensation scheme which comprises of rent until new tenant moves in, advertising, any relevant agents re-letting fee. This method involves adjusting the fees depending on how far through the contract the tenant is, as well as 'mitigation of loss' for landlords not attempting to raise the rent or being overly picky about choosing new tenants knowing that the outgoing tenant is picking up the tab while they choose.

Ensuring the proper amount is charged requires a lot of time and effort by the outgoing tenant.  At the moment, landlords choose whichever one they think will get them the most money.

The proposed change is to require the tenant to pay a fee more closely related to how far through the contract they are. Either, 4, 3, 2 or 1 weeks rent as a penalty depending on which quarter of the agreement (up to 3 years) they are in.  This is much closer to the real costs experienced by landlords once costs are considered in Tribunals.

Our recommendation

We think this much better reflects the average costs payable in 'abandonment'. It does have downsides for tenants who are in high demand areas - they may well pay more in break fees than under the 'compensation' scheme. However we think this is a fair trade for the certainty in not having to keep a close eye on the property once you've left and fighting unfair compensation claims in the Tribunal. A tenant's time and energy should be respected!

This proposal should be passed without change.

Changes to rent increases

Currently in NSW the rent can be increased at any time outside a fixed term, and can seek any amount. It is up to the tenant then to dispute whether the increase is excessive. Often this is very difficult as most of the information required to dispute an increase is in the hands of the real estate industry who may well charge for access. Not only is the landlord or agent more likely to have the funds to pay for the information, but this is an expense that can be written off as a tax deduction by the landlord or agent. Tenants on the other hand, are simply out of pocket.

The government is proposing two changes - one representing a little step forward, and one representing a step back.

Rent increases in periodic agreements will only be able to be increased once every 12 months. This is a good step on its own terms as it provides much more certainty about when increases will come. However, there are two issues - first, that it does not address the information asymmetry, and second that it does not apply to fixed term agreements. A landlord wanting to use rolling 6 months agreements will be able to increase the rent every 6 months.

Indeed the second change makes this issue even worse. In some contracts, landlords or agent write a future rent increase into a fixed term contract of less than 2 years. So long as the date and amount of increase is included, the government's proposal is that the landlord will not have to then issue another rent increase later on. Currently, very few landlords offer leases of more than 12 months (other than the state's biggest landlord - FACS - which generally offers 5 or 10 year leases, without break fees).

A landlord who wants to avoid the 12 month restriction on rent increases in periodic will now be incentivised to move to rolling short fixed term leases, which allows more frequent rent increases. The Minister, Matt Kean, claims one reason they have not acted on no grounds evictions is that retaliatory rent increases are the bigger issue for tenants. We might disagree about which has a bigger impact, but if it is true, these two proposals taken together mean tenants are still very much vulnerable to retaliatory rent increases.

Our recommendation 

Rent increases should be more balanced in two key ways. A time restriction on rent increases should apply regardless of the contract term and be restricted to 12 months since the beginning of the tenancy or the last increase.

There also should be a sharing of the onus of proof around excessive increases. Where the landlord wants to increase the rent above a fair marker, like the Consumer Price Index, we think it's reasonable that they should provide the evidence to support the claim. If the increase comes in at or below CPI, then the tenant can choose whether or not they agree with the claim and demonstrate the evidence for why the property doesn't meet that level. This is a far more equitable approach. 

As a first step, Parliament should pass this current proposal but we would support amendments to the bill to make it even stronger.  

Repairs inspectors assess the need for repairs and make rectification orders

This change would see Fair Trading take a much more active role in repairs processes. At either the tenants or landlords request, an investigator will attend the premises to assess the repairs and make rectification orders. If the rectification order is not followed the Tribunal can make further orders and penalties may apply.

While this idea has potential, its success will mostly rely on whether it is adequately funded - especially for tenants in regional areas where wait times could potentially render it unusable. Where the funding comes from will also be crucial - it would be unacceptable for it to come from the Rental Bond Board whilst Tenants' Advice and Advocacy Services remain grossly underfunded and have been told for many years there is simply not enough money (despite there being a $60million surplus!).

Our recommendation 

We really need to see a more concrete details around how this plan will be implemented - it has capacity to be a game-changer or a dead rubber. It is certainly worth giving a chance.