Boarding Houses Act 2012

The NSW State Government's Boarding Houses Bill has passed through both Houses of the Parliament. It just needs the Governor's signature and we'll have a Boarding Houses Act 2012.

(Charles Blackman, Self-portrait in front of a boarding house)

The Act has not commenced operation yet. We understand that the Government intends for it to commence 1 January 2013.

This is a landmark reform. Under the Act, residents of registrable boarding houses will have, for the first time, an enforceable entitlement to written agreements and written receipts.

They'll also have, for the first time, agreements that must comply with certain basic occupancy principles. These include entitlements to premises that are in a reasonable state of repair, to know the house rules before moving in, to quiet enjoyment, to know why and how the occupancy may be ended, including how much notice is to be given, and to be given reasonable notice of termination. They also include safeguards against penalty terms and unfair utility charges, and a limit on bonds to two weeks' rent. 

Residents will also have, for the first time, straight-forward access to dispute resolution in the Consumer, Trader and Tenancy Tribunal.

If these things seem basic and modest, they are – which says a lot about the very rough deal that boarding house residents have gotten from proprietors, and from the law, for too long.

The Act also establishes a Boarding Houses Register – so you will be able to check if the premises are registered, and find out the name of the proprietor – and directs councils to inspect premises for compliance with building and fire safety requirements. Finally, the Act revamps the regulatory regime for LRCs – now called 'assisted boarding houses'.

As we say, it is a landmark... but not the final destination of reform. Beyond this piece of legislation, there's still more to do. 

We still need to develop standard forms of occupancy agreement for the different types of boarding house accommodation (as provided for by the Act). 

We still need further law reform to extend the occupancy principles to marginal renters who don't live in registrable boarding houses (such as lodgers in private homes, share houses, student accommodation, and refuges and crisis accommodation) and who are excluded from residential tenancies legislation.

And finally, we need the deliberate and orderly winding up of the assisted boarding house sector, with residents assured of appropriate accommodation in social housing, groups homes or nursing homes, and properly funded professional support.

But as we reach the present landmark, we pause and congratulate the NSW State Government, and in particular the Disability Services Minister, Andrew Constance, who had carriage of the reforms. And we congratulate all those community workers, advocates and, especially, boarding house residents, who, over so many years, have spoken out against the injustices of marginal renting and who have kept pressing the case for reform.

Boarding Houses Bill 2012: TU comment

This afternoon the NSW State Government introduced its Boarding Houses Bill 2012 for debate in State Parliament. This is the Tenants' Union's comment on the Bill.

The Tenants' Union strongly supports the Boarding Houses Bill (the Bill). The Bill is a much-needed and long-overdue measure of law reform for the State's boarding house sector and the people who live in it.

In particular, the TU strongly supports the Bill's provisions relating to occupancy principles and occupancy agreements for boarding house proprietors and residents. These provisions give proprietors an appropriate degree of flexibility in drafting agreements that suit the services they provide, and give residents some basic rights and access to justice.

We also strongly support the Bill's establishment of a new Boarding Houses Register. This will give prospective residents and other members of the public access to relevant information about boarding houses; help ensure that councils identify and inspect boarding houses and enforce building and fire safety requirements; and provide a point for information exchange between government and the boarding house sector.

The Bill makes a number of improvements on the Government's earlier draft Bill, circulated for consultation in June this year. In particular:

• the loophole about premises that are subject to a tenancy agreement is closed;
• the names of boarding house proprietors will be included on the Register;
• proprietors will be required to provide a written occupancy agreement at the commencement of an occupancy;
• standard forms of occupancy agreements for different classes of agreements, persons or premises may be prescribed by regulation;
• the occupancy principles are effective – it is a term of every occupancy agreement that the occupancy principles apply;
• a new occupancy principle prohibits penalty clauses for breach of house rules;
• a new occupancy principle allows utility charges to be levied on a reasonable basis only;
• a new occupancy principle limits bonds to two weeks' occupation fee; and
• a wider range of remedies is available in the Tribunal, including compensation.

The TU commends the Bill to all Members of Parliament. Beyond the present Bill, we encourage the Government to continue reform of the boarding house sector and marginal renting more generally, particularly by:

• working with stakeholders to develop standard forms of occupancy agreements, to be prescribed by regulation;
• legislating to provide that all persons who rent their housing and who are not otherwise covered by residential tenancies legislation are covered by the occupancy principles and occupancy agreements;
• boosting the Boarding Houses Financial Assistance Program, in anticipation of increased applications for fire safety grants, and to allow grants for other purposes;
• expanding the Boarding House Outreach Program, to connect boarding house residents to support services in locations throughout the State; and
• adopting as government policy the orderly winding up of the assisted boarding house sector, and ensuring that residents have access to appropriate housing and funded support services, provided on a not-for-proft basis.

The best of both Bills

This week the NSW State Parliament is set to debate independent MP Clover Moore's Residential Tenancies Amendment (Occupancy Agreements) Bill, which would set out broad occupancy principles for all marginal renters not otherwise covered by residential tenancies legislation. The occupancy principles would deal with important matters such as evictions, repairs, bonds, utility charges and penalty terms; and these principles would be given effect in individual occupancy agreements. Disputes would be resolved by the Tribunal, where parties would have access to a wide range of remedies.

Moore's Bill was drafted late last year; now the Government has its own draft Boarding Houses Bill, which would establish a Boarding Houses Register, revamp the licensing regime for licensed boarding houses for people with disability ('residential centers for vulnerable persons')... and set out broad occupancy principles for some – not all – marginal renters (just those living in 'registrable boarding houses'). These occupancy principles would deal with important matters such as evictions, repairs – but not bonds, utility charges and penalty terms; and these principles would not necessarily be given effect in individual occupancy agreements. Disputes would be resolved by the Tribunal, but remedies would be limited – there's no provision in the draft Bill for compensation.

The Parliament – and the people of New South Wales – can and should have the best of both Bills.

The Government should, as we've submitted, amend the draft Boarding Houses Bill – and in particular, amend Chapter 3, which contains all the draft Bill's provisions about occupancy principles.

First, it should provide that Chapter 3 – and only Chapter 3 – applies to all the persons to whom Moore's Bill would apply.

Secondly, it should include in the occupancy principles all of the additional occupancy principles – those about bonds, utilities and penalty terms – from Moore's Bill.

And thirdly, it should make the occupancy principles as effective as those in Moore's Bill, by requiring that they are given effect in individual occupancy agreements and that the usual contractual remedies – including compensation for loss – are available. 

Then we'd have a Boarding Houses Register, a revamped licensing regime for licensed boarding houses, and fair, effective occupancy agreements for all marginal renters.

Oh, that's what law reform dreams are made of.
 

Comment on the draft Boarding Houses Bill (part 3)

The TU has lodged its submission on the draft Boarding Houses Bill; you can read the whole submission on the TU's website. Here on the Brown Couch, we'll discuss the most important recommendations.

One of those recommendations we've already discussed in some detail: the Government should fix the loophole that would exempt dodgy head-tenants – and virtually any boarding house proprietor who makes their premises subject to a residential tenancy agreement. Now we'll discuss four more key recommendations.

1. More renters should be covered by the draft Bill's occupancy principles. (We discussed this briefly, in our initial comments on the draft Bill.) 

   

Because the draft Bill applies to 'registrable boarding houses', as defined in the draft Bill, it leaves uncovered a wide range of marginal renters who are currently excluded from residential tenancies legislation and subject to the inadequate provisions of the common law of lodging: lodgers in private homes, occupants of shared households, residents of refuges and crisis accommodation, students in halls of residence, etc etc. All these marginal renters would benefit from being covered by the draft Bill's provisions about occupancy principles and occupancy agreements. 

These provisions are  contained in Chapter 3 of the draft Bill; that Chapter (and only that Chapter) should apply wherever a person is granted, for value, a right to occupy premises for a residential purpose for a term or period and the agreement is not otherwise subject to residential tenancies legislation.

2. The occupancy principles should deal with bonds and security deposits. (We discussed this one in our initial comments too). Boarding house residents often pay significant amounts of money in bonds and other security deposits, and often have problems getting their money back. There should be an occupancy principle that limits the total amount of security that may be required to two weeks’ occupation fee, and requires that all bonds and security deposits be lodged with the Rental Bond Board. The Bond Board is already there to safeguard tenants' bonds, so let's use it as a safeguard for boarding house residents' bonds too.

As well as an occupancy principle about bonds, we recommended two more occupancy principles: one about utility charges (they should calculated based on the cost of providing the utility and a reasonable estimate of the resident's use of it), and one about penalty terms (simply, there shouldn't be any penalties or fines in residents' agreements). Each of these things is a present problem in marginal renting; the really big problem, however, is the lack of safeguards about bonds. 

3. Occupancy agreements must be made more effective. We touched on this in our initial comments when we noted that the provisions for the Consumer, Trader and Tenancy Tribunal to resolve disputes about occupancy principles expressly excluded a power to make orders for compensation. This, however, is just one part of a larger problem with the effectiveness of occupancy agreements, as provided for under the current terms of the draft Bill. 

Another part of the problem lies in the relation between 'occupancy principles' and 'occupancy agreements'. Properly understood, the occupancy principles are supposed to be the broad statements of principle in the legislation, and the occupancy agreements are supposed to be the individual contracts containing all the nitty-gritty detail of terms and conditions – within the broad confines of the principles. The draft Bill says an occupancy agreement cannot contract out of an occupancy principle – so far so good. But it does not say that an occupancy agreement must positively give effect to the occupancy principles. This means that an occupancy agreement could be the barest kind of agreement – 'John Jones may occupy the premises as lodgings for $100 per week' – containing no other contractual terms at all. The occupancy principles would still say that John Jones is entitled to certain things (eg premises is a reasonable state of repair), but this entitlement would not be a contractual entitlement – just a statutory entitlement, the remedies for which are, as noted, limited to what's provided for in the legislation (that is, no compensation). 

Occupancy agreements should give effect to the occupancy principles – and where an agreement does not actually give effect to the principles, it should be taken to give effect to them. And in the event of a breach, residents should have the usual contractual remedies, including compensation for any loss suffered. 

A final recommendation to improve the effectiveness of the occupancy provisions: some of the occupancy principles should also be backed up by penalties (in particular, the principles about written agreement, written receipts, quiet enjoyment and reasonable notice of eviction). As it is currently drafted, Chapter 3 contains no penalties for breach of its provisions at all.

And it should be said – there's already in Parliament a piece of legislation that shows how each of these three recommended improvements could be achieved. If Chapter 3 of the draft Boarding Houses Bill covered the same persons as Clover Moore's Bill covers, and provided for the same occupancy principles as Moore's Bill provides for, and made occupancy agreements as effective as Moore's Bill makes them, it would be a stronger piece of legislation and a landmark reform.

4. Better consumer protection through the Boarding Houses Register. We haven't previously mentioned the draft Bill's new Boarding Houses Register. This would be a list, maintained by NSW Fair Trading, of registrable boarding houses; proprietors would be required to register their premises, or be guilty of an offence if they don't. 

Getting registered doesn't mean the premises are approved for use as a boarding house (this would still be for the local council to decide under planning laws); it just means that the premises are on the list, and that members of the public can see that they are registered.

We support the Register, but it should be made into a stronger measure of consumer protection. In the draft Bill's current terms, the Register would make public the name and address of the premises, and whether the premises is a Tier 1 or 2 boarding house. And that's all. 

This is well and good if you're a neighbour and you suspect the house over the road is an unapproved boarding house: you just check the address against the Register and if it not there, you dob them in to the local council. 

But if you're a prospective resident, or someone helping a prospective resident, you might like to find out a little more, such as the name of the proprietor, and whether there has been any disciplinary action taken against them. The Government Licensing Service provides this sort of information to members of the public in relation to tradespersons and other licensees; the Register should provide the same information – and the same level of consumer protection – to prospective residents of boarding houses.