End of the line for justice in Gosford?

We've just heard that tenants on the Central Coast will lose their dedicated NSW Civil and Administrative Tribunal (NCAT) hearing rooms. These have been co-located with the Gosford Fair Trading Centre since 2004. They were established there when tenancy disputes were heard by NCAT's predecessor, the Consumer Trader and Tenancy Tribunal (CTTT), which was administered by Fair Trading until its amalgamation with other tribunals as NCAT in 2013. Now the Fair Trading Centre is moving and NCAT - administered by the Department of Justice - says they can't stay where they are.

It's a long way to Newcastle for tenants trying to avoid an eviction

Commencing early December, most hearings will take place in a single room at the Gosford Courthouse, two days per week. From 2017 onwards, formal hearings will be held in Newcastle or "other Central Coast locations".

This presents a number of problems. The Central Coast Tenants Advice and Advocacy Service outlined some of these in a letter to the NSW Attorney-General, not long after they were informed of the decision:

Prior to having a dedicated Tribunal Centre in Gosford, arranging hearings was a very ad hoc affair with matters heard in Woy Woy Courthouse, Wyong Council Chambers, Edogowa at East Gosford, local community centres and the like.

As with any temporary venue, there was often confusion by some or all of the concerned parties regarding the whereabouts of the available hearing room on a particular day

On occasions the staff at these locations were not notified or otherwise unaware of a scheduled hearing and this often resulted in cancellations, postponements or relocations of hearings.

Because assigned conciliation rooms were not provided in temporary facilities this resulted in a lack of mediation opportunity and therefore matters that could be potentially resolved without requiring a hearing were far less likely.

Other detrimental factors in utilising temporary facilities included a lack of close proximity to public transport, unfamiliarity with the location, lack of privacy, lack of security, lack of amenities and lack of available parking.

Clearly, dedicated hearing rooms in Gosford have meant improved access to justice for tenants on the Central Coast for more than a decade. But even if NCAT addresses each of the concerns above, the significant reduction in its capacity on the Central Coast remains a worry.

We've taken a look at some numbers. NCAT doesn't provide the quality of reports that its predecessor did, so we've had to go back to the CTTT's annual report from 2012/2013. There we can see that in that period there were 3,706 matters heard in the two Gosford hearing rooms over a total of 173 hearing days. That gives us an average of around 20 matters heard per day, at 10 per room. The numbers were similar for the preceding year, so we'll assume they paint a reliable enough picture.

As we've noted above, the current proposal is for NCAT matters to be heard in a single hearing room on the Central Coast, two days per week. Let's knock off a few weeks for Christmas and assume that gives us a maximum of 100 hearing days per year. If they can sustain the rate of 10 hearings per room per day, we can expect them to handle about 1,000 matters each year from December. NCAT is about to start running at a little more than a quarter of its current capacity on the Central Coast.

This will be a real test for their case-management strategies and systems.

About 75% of NCAT hearings are in the tenancy or social housing lists, and about 60% of those are applications made by landlords seeking to end a tenancy. The majority of tenants' trips to the Tribunal are to try and fend off an eviction - but for those who do try to take a landlord to NCAT over repairs and maintenance, expect a long wait. And if your landlord is after termination and possession orders and doesn't want to play nice, the thought of a return trip to Newcastle might prompt you to reach an agreement that's not in your interests, rather than stick to your guns and go to a formal hearing.

Tenants shouldn't be forced to make such compromises. In the interests of justice, NCAT needs to find itself a sensible, permanent venue on the Central Coast.

Bond Insurance - a gamble not worth making.

We've recently found out about BondSure, a new company offering bond insurance, as well as bond loans and contents insurance. We do not think bond insurance is worth it for most tenants, unless you are exceptionally accident prone.

This guy. This guy needs insurance.

Let's consider the kind of insurance being offered. Your rental bond is already a form of insurance - the tenant pays a lump sum up front to ensure that if there is compensation due to the landlord at the end of the tenancy, the money is already there.

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

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

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

So, how does this insurance on your insurance work?

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

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

We know from the Rental Bond Board that the actual numbers of people losing their bonds are very low. Once you take out the stuff that BondSure's bond insurance doesn't cover, these numbers will be even lower.

Click for full size!

In the 2014-15 financial year, there were 266,856 bonds refunded. 53% of tenants received their bond back in full. If those tenants had held bond insurance, they'd have made a $378.96 bet and lost. This is where BondSure makes its money.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Taking action for access to justice - an update on NCAT fees

A few weeks ago the NSW Civil and Administrative Tribunal fee structure for pensioners changed substantially with the result that basic application fee more than doubled for many tenants. We wrote previously about it here. Every dollar counts for pensioners and other concession card holders and we're worried that this increase in fees will create a barrier for vulnerable and disadvantaged tenants to lodging an application.

The change introduced a new method of calculation for concession fees, setting them as a percentage of the full fee.  This resulted in a significant increase in the standard fee this time around, but also means that whenever full fees increase, fees for pensioners will also increase at the same time.  Pensions don't generally increase at the same rate or frequency as average household incomes, so any future fee increases will be felt more sharply by pensioners.   

There's now a chance this change, which came without consultation, may be reversed by parliament. Greens Member of the Legislative Council, Jan Barham, has moved to disallow the new fee structure.

When this motion comes up for debate in parliament in a month or so's time, the cross bench Members of the Legislative Council will have the ability to support the motion, and push for the cost of NCAT applications for pensioners to revert to $5.

Now is a great time to get in touch with these MLC's to let them know about the potential impact of these changes on access to justice for vulnerable tenants. We've written a sample letter that you can personalise and adapt.  The most effective letters are those that are personal and passionate. You might want to talk about how this change could affect you or others you know, or mention that in other states, like the ACT and Victoria, the application fee is set at $0 for pensioners.

If you'd like to get in touch, here are the cross benchers details:

Animal Justice Party

Mark Pearson
Phone (02) 9230 2445
Fax (02) 9230 2599
mark.pearson@parliament.nsw.gov.au 

Christian Democratic Party
Paul Green
Phone (02) 9230 3484
Fax (02) 9230 2342
paul.green@parliament.nsw.gov.au

Fred Nile
Phone (02) 9230 2478
Fax (02) 9230 2098
F.Nile@parliament.nsw.gov.au

Shooters, Fishers and Farmers Party
Robert Borsak
Phone (02) 9230 2850
Fax (02) 9230 2613
robert.borsak@parliament.nsw.gov.au

Robert Brown
Phone (02) 9230 3059
Fax (02) 9230 2613
robert.brown@parliament.nsw.gov.au

Inaccessible justice

As of July 1st, some applications to the New South Wales Civil and Administrative Tribunal became more than twice as expensive. However, if you aren't elderly, disabled or unemployed you might not know this because this only applies to people in receipt of a pension.

The fee change was published and made law on the 1st of July, the same day it was to take effect. To our knowledge, this change came without consultation with the members (including the Tenants' Union) of various consultative committees set up to support the Tribunal. This is a very disappointing omission, as we might have been able to discuss the potential impact on access to justice, and the fairness of the decision in light of the funding arrangements of the Tribunal.

Prior to July, pensioners could seek a reduction in fees, down to $5 for the basic application. $5 had been the level for concession card holders for many years, and reflected a commitment to ensuring that vulnerable people could still access the justice system when they were mistreated.

Now the calculation is that concession fees will be 25% of whatever application the person is making. It will now cost a pensioner $12 to make a regular application. This may not sound like much if you are a wage earner, but it will begin to bite concession card holders hard enough that they may not apply to the Tribunal at all.

It also means the concession fee will continue to increase when other fees do. Consider how quickly pensions are rising compared to wages below, and consider the fairness of this proposition.

Changes in income types over the last 20 years

Tenants are the people most likely to apply as concession holders, and we already fund nearly a third of the entire expenditure of the Tribunal. More than $14 million a year is provided to the Tribunal from the interest earned on tenants bonds.

Most of the funding NCAT receives from tenants' money is actually already spent subsidising landlord applications, so vulnerable tenants being asked to pay more than twice as much for their application really does seem a bit much.

And since tenant applications at NCAT are already dwarfed by landlord applications, there is no good reason to tip that balance further towards landlords by discouraging tenant applications.

Finally, something to consider about how we encourage access to justice for some of our most vulnerable members of society. In both Victoria and the ACT, their Tribunals also recently updated their fee structures. The cost to concession card holders to make a tenancy application? $0.

Whose price is right?

Domain, the bible of Sydneysiders who attend dinner parties in journalists' imaginations, recently released another piece of high conversation fodder - its price data tool. This allows you to search nearly any address in Australia for information on its estimated rent and sale value, as well as its history on the market. It was presumably constructed using the mass of property sales data the NSW Government pledged to release earlier this year.

It certainly has novelty value. Search your friend's place. Search your neighbour's place. Search Kirribilli House. And did you know the tiny inner city terrace your correspondent's mum bought for thruppence and a rusty nail in the 80s could now get you a medium size island?

Rent this charming sandstone mansion with 180-degree city views for only $1140 a week (estimate)!

But beyond snooping, renters should note that the Domain tool, and the clones we're sure are in the pipeline, could change the issues relevant to rent increases.

This Leichhardt two bedder provides a fine example. The property history shows that it was let for $550 a week as recently as July 2015. As one might expect for a property that is a fixture on the rental market, this is the end point of steady increases in recent years. The current price is $80 higher than in 2012, $100 above the 2010 mark, and a full $175 more than the going rate back in the Bronze Age of 2007.

So $550 is a reliable marker for current market rent, right? 

Wrong - at least according to Domain. The price tool estimates with "high confidence" that the going rate should in fact be $650 per week. This is based not on data concerning the property itself, but on advertised rent prices for similar properties elsewhere in Leichhardt.

So if a hypothetical tenant's hypothetical landlord were to issue a rent increase of $100 per week, citing the price tool as evidence of a property being rented at well under market value, would our hero be advised to dispute the increase as excessive? There are of course a great many variables this scenario cannot consider.

But it does raise interesting questions. Isn't 'market value' just the price a consumer is willing to pay, rather than what a vendor is hoping to collect? If so, the fact this property has consistently gone onto the rental market, and is currently fetching $550, suggests that this is indeed market rent. Or is the whole of market picture, suggesting a similar place in the same suburb goes for $650, in fact a more reliable guide to 'true' value?

There are also obvious problems with Domain's use of advertised rather than actual rents in coming to its figure of $650. There is absolutely nothing to suggest the agents of the inner west were able to obtain the advertised prices on the properties used to calculate the price tool's estimate. This is something we've discussed in earlier conversations on the the Brown Couch.

These may well form the parameters for landlord-tenant deliberations and confrontations to come. For what it's worth, we think our tenant stands on solid ground. But a result the other way is not out of the question, particularly if the case winds up at a Tribunal hearing. These are notoriously difficult for tenants to win, and the Residential Tenancies Act affords Members substantial leeway to come to their own conclusions about what is and is not relevant in contemplation of an increase. 

As we've noted elsewhere, the Minister responsible for Fair Trading is required to undertake a review of the Residential Tenancies Act 2010 this year. We believe the rules around dispute of rent increases as excessive need reform. Particularly relevant to our hypothetical is that the evidence burden for rent increase matters is always on the tenant, who must show that the disputed increase is in fact excessive. We say that where an increase exceeds the CPI - as would be the case in our scenario - the burden should be on the landlord to show that the increase is not excessive. This would put our tenant on much safer ground, and prevent increases of dubious merit from happening.

We note finally the the price tool may also struggle outside the confines of the city, though for different reasons. With far less data, both area and property-specific, available for regional housing, it's not hard to see that the program will produce estimates based on very little information. This is likely to produce further anomalies and inconsistencies, and therefore arguments of its own. 

Read the Tenants' Union's full submission on reform to rent increase provisions here.

The rule of law

There's been a lot of focus on federal politics in the media over the last week. Some of it has been about housing affordability, which has mysteriously found its way into the national political discourse. But there's also been a bit of talk about the "rule of law".

It's the rule of law that has inspired today's discussion. What may or may not have been said about the Australian Government's ability to make a person stateless gives rise to a similar conversation about how a person may be made homeless. The link between statelessness and homelessness is not an entirely tenuous one - both concepts feature, in some way, in international human rights covenants that Australia has signed up to.

During the week, concerns have been raised about whether it should be a Government Minister, or a competent court of law, who can decide to strip a person of their Australian citizenship. It has been suggested that it's sometimes a little tricky to get hold of the evidence one might need to achieve this outcome in court, so it would be better to leave it to the Minister to make an "administrative decision". Others have said "no - that is precisely what courts are for". Their argument is that if you haven't got enough evidence to convince a court then you shouldn't have enough evidence to convince a Minister.

What happens if we apply the same kinds of argument to housing?

First, we need to acknowledge that a person renting in the private rental market can be stripped of their tenancy with little more than an administrative decision - that is, a landlord can decide to end the tenancy without a reason. But that's a different kind of administrative decision than the sort a government Minister might make, because it is not subject to judicial review. Such a decision used to be subject to review, in a way. Under the Residential Tenancies Act 1987 the tribunal had discretion not to end a tenancy if that was appropriate in the circumstances of the case. But when the Act was reviewed and rewritten in 2010, the discretion was removed. Sometimes the rule of law just doesn't go your way.

But things get a little more complicated when the landlord is the government. Tenants in public housing are subject to all kinds of administrative decisions made by workers in the department of Family and Community Services. Many of these decisions have a direct impact on a person's housing - whether they will be housed; whether they can move to another house; whether their rent will be reviewed; whether their housing assistance will be taken away from them. And where these decisions are subject to review it is by the internal processes of the department of Family and Community Services and a Ministerial committee, not by the courts.

Thankfully for tenants in public housing, when Family and Community Services decides to end a person's housing assistance - usually making them homeless - there is a final check on that decision: they issue a notice to terminate the person's tenancy, citing the grounds upon which they say it should end. If the tenant disagrees with those grounds, or has anything to say in response, the matter may go before a tribunal. The tribunal considers the evidence from each side, then determines whether or not the decision should stand.

This is the rule of law in action. But the process may be under threat.

We know that the Government is considering a range of reforms to tackle what they've referred to as 'anti-social behaviour' in public housing. We know that this could include a probationary period for long term tenancies. We don't know that probationary tenancies will not end arbitrarily, by issue of a termination notice without a reason; without regard to the tribunal, or an independent review of all the available evidence.

The rule of law has a long history. It can be traced back to the Magna Carta, the foundational document that established that English kings are not above the law. Parts of the world will celebrate the 800th anniversary of the Magna Carta in just over a week - on June 19th 2015.

For what it's worth, and in so many respects: let's hope our own celebrations are not marred by a diminished rule of law.

Defence Housing tenants get marched out of Tribunal

[UPDATE: this blog post is the subject of a correction.]

A curious development in New South Wales tenancy law, courtesy of the Federal Government: it appears that tenants of Defence Housing Australia in New South Wales no longer have access to the NSW Civil and Administrative Tribunal for resolution of tenancy disputes. Instead, they'll now have to go to the Federal Circuit Court of Australia.

These marching orders come in the form of the Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015, made last week by Federal Attorney-General Senator George Brandis, under new section 10AA(3) of the Federal Circuit Court of Australia Act 1999 (Cth), as amended last month by the Federal Courts Legislation Amendment Act 2015 (Cth).

The legislation gives the Federal Circuit Court jurisdiction over tenancy disputes where one party is the Commonwealth – which appears to include Defence Housing Australia.

The instrument deals specifically with residential tenancy disputes involving the Commonwealth in New South Wales, and provides that a party must not make an application to NCAT, but instead go to the Federal Circuit Court. The Court will apply the Residential Tenancies Act 2010 (NSW) in determining the dispute.

Our concern is that because the Federal Circuit Court is more formal and costly than NCAT, Commonwealth tenants – particularly Defence Housing tenants – will have less access to justice.

We do not know why the Federal Government has taken this course; nor do we know whether other States will be affected by similar instruments in the future (the present instrument specifies New South Wales). We're also trying to think of Commonwealth agencies other than DHA that enter into residential tenancy agreements – if you can think of one, please let us know.

In any event, as they affect access to justice for the several thousand DHA tenants in New South Wales, these changes should be reconsidered.

The big stick

Legendary tenants advocate and TU Older Tenants Project Officer, Dr Robert Mowbray, looks at who's using the 'big stick' in tenancy – that is, the Tribunal.

 *

Big stick: a policy of acting or negotiating from a position backed by a show of strength. Origin from ‘speak softly and carry a big stick’, portion of African proverb quoted by Theodore Roosevelt.

Who were the big users of the Consumer, Trader and Tenancy Tribunal (now amalgamated into the NSW Civil and Administrative Tribunal) in the twelve months to 30 June 2013?

Well, landlords of course …in sheer numbers. They lodged 23,888 applications in the Tenancy Division (75% of all applications) and 16,897 applications in the Social Housing Division (95% of all applications). 

But it's not as simple as that. Park residents lodged 1,739 applications in the Residential Parks Division and, indeed, this is 88% of all applications in that Division.

Looking a little deeper at the market share of each type of housing provision, a simple analysis shows that the biggest users of the Tribunal are community housing providers, with 14.5 applications for every 100 premises managed by community housing providers. They are followed by Aboriginal housing providers (13.0), Housing NSW (10.5) and park residents (7.7). And social housing tenants (including community housing tenants) are the least likely of all groups to use the Tribunal.

This can be visualised in the column chart below.

Why might this be the case? 

Let’s look first at community housing providers. There are a number of possible explanations as to why community housing providers are heavy users of the Tribunal – and in particular, why they are heavier users than Housing NSW.

Compared with public housing, community housing has fewer elderly tenants, who tend to have a stable fixed income, such as Age Pension, and also relatively stable expenditures. More of these tenants can pretty much ‘set and forget’ their rent payments which, of course, means fewer problems for Housing NSW.

Another explanation is the practices of community housing providers when dealing with rent arrears and disputes.

Housing NSW’s ‘Community Housing Access Policy’, February 2012, states:

4.4. Termination of Resident and Tenancy Agreements

Community housing providers must have fair and transparent processes in place to determine the termination of any resident agreement or a residential tenancy agreement under the Residential Tenancies Act 2010. This must include a process to advise residents and tenants about the circumstances in which a resident agreement or residential tenancy agreement may be terminated. Following a decision to terminate a residency agreement or a residential tenancy agreement, a community housing provider must issue, in writing, a notice to the resident or tenant explaining the termination and setting out a reasonable timeframe for the resident or tenant to vacate the premises. The termination of a residential tenancy agreement must be accordance with appropriate provisions under the Residential Tenancies Act 2010.

So, there is discretion for each community housing provider to decide in what circumstances they might initiate an application to the Tribunal. The policy of one Sydney-based community housing provider suggests that it uses the Tribunal as a ‘big stick’. This community housing provider applies to the Tribunal for a termination order, even though it is their expressed intention to obtain a performance order. And, they do this regularly, forking out the application fee each time.  This may or may not be common practice amongst other community housing providers.

In relation to managing rent arrears, this community housing provider’s ‘Policy and Procedures’, published on-line, states:

If a tenant is more than 14 days in rent arrears they will be served a letter for non-payment of rent, giving them 7 days to amend the arrears.

If the tenant does not respond and the arrears fall further behind, after 7 days, the Manager will issue a Notice to Terminate.

If the arrears are not cleared by the end of the Notice Period we will apply to the [NSW Consumer and Administrative Tribunal] for a Specific Performance Order where tenants have entered into a formal repayment agreement.

Where tenants have not signed a formal repayment agreement we will apply to the [NSW Consumer and Administrative Tribunal] for an order giving us vacant possession of the property and an order that the tenant pay all rent owing.

[However] at the Tribunal hearing we will not pursue an order for possession if the tenant consents to a Specific Performance Order to repay all arrears owing. If the tenant breaches this order we will apply to the Tribunal for vacant possession of the property.

The same community housing provider states:

Any Notice to Terminate issued for breach of the lease agreement will follow the same principles applied in the Eviction for Rent Arrears policy.

It is probable that community housing providers have a lower ratio of tenancies to tenancy managers compared to Housing NSW. Accordingly, they have more time to vigorously pursue disputes. This, in itself, is worth further investigation. However, in tandem with an explicit policy such as above, it will inevitably lead to a greater number of applications before the Tribunal. 

The figures for Aboriginal housing combine both properties owned by the Aboriginal Housing Office (but managed by Housing NSW) and Aboriginal community housing organisations. Their numbers are of the same order, with around 4,500 to 4,700 properties respectively. This would explain why their use of the Tribunal also is mid-way between that of Housing NSW and community housing providers.

Now let’s look at residents of residential parks. There are a number of possible explanations as to why residential park residents are heavy users of the Tribunal. 

Seventy-six percent of applications in the Residential Parks Division were about excessive rents and excessive rent increases. Because it is so costly for park residents to move, park owners have disproportionate market strength and therefore are in a position seek to extract a higher rent than may be justified. 

However, the park residents live in close proximity and enjoy solidarity in numbers. As a general rule, notices of rent increases are issued to all residents at the same time and this leads to their banding together to dispute excessive rent increases.   

Also, the more residents that dispute the rent increase then the greater the chance of success, because of the ‘comparable site fee’ argument and park owners saying things like 'we have 96 residents and only 20 of them are here – the other 76 are happy to pay the increase’.  The fact that a successful challenge often depends on numbers pushes the numbers up.

Also, unlike tenants of residential properties, residents of residential parks are not subject to no-grounds eviction and therefore are less vulnerable to retaliatory eviction for exercising their rights.

The low rate of applications from private tenants and social housing tenants requires a comment. A major reason for the smaller number of applications by private tenants would be their fear of retaliatory notice of termination. This interpretation is reinforced by results in the ‘Affordable Housing and the New South Wales Rental Market, 2014 Survey Report’, published by the Tenants’ Union of NSW on pages 11 and 12:

77% of respondents have put up with a problem or declined to assert their rights as a tenant because they were worried about adverse consequences.

It may be that social housing tenants hold the same fear. This shouldn't be the case, however, because social housing landlords are required to be more transparent. Nevertheless, in the case of social housing tenants, they may be discouraged because they are up against a big authority in their lives and a repeat player in the Tribunal. They may feel that they lack the information and skills to make their case. This is one reason why Tenants Advice and Advocacy Services are so important.  

Having said this, the higher rate of applications from private tenants than from social housing tenants is probably is probably at least partly explained by claims for return of rental bond at the end of tenancies. In the 12 months to 30 June 2013, there were 4,543 bond disputes in the Tenancy Division, compared to just 48 in the Social Housing Division. 

When considering the use of the Tribunal, we should keep in mind that Tribunal applications mean different things between different types of applicants. Applications cover a wide range of types of applications. A few examples will suffice:

•       42% of applications in the Tenancy Division were lodged by private landlords seeking orders for termination for non-payment of rent.

•       2% of applications in the Tenancy Division were lodged by tenants seeking orders for repairs.

•       54% of applications in the Social Housing Division were lodged by social housing providers seeking orders for termination for non-payment of rent.

•       1% of applications in the Social Housing Division were lodged by tenants seeking orders for repairs.

•       9% of applications in the Residential Parks Division were lodged by park owners seeking orders for termination.

•       76% of applications in the Residential Parks Division were lodged by park residents for orders relating to rent / excessive rent increases.

So, what's at stake is very different, depending on who is applying. When a group of park residents apply against a rent increase, what's at stake? The park operator might end up getting the same rent as as they currently get, or perhaps more (but not quite as much as they had wanted). When a landlord applies for termination, a tenants' home is at stake. Many orders sought by social housing providers for termination for non-payment of rent would have led to performance orders without the tenancy being terminated. This is the ‘big-stick’ interpretation cited above on how some community housing providers use the Tribunal.

Well done Frances Abbott, tenant

The Tenants' Union of NSW congratulates Frances Abbott on asserting her rights as a tenant.

Ms Abbott, formerly resident of Sydney, now of Melbourne, had entered into a tenancy agreement for a flat in Prahran but ended the agreement early because the premises were not secure – amongst other things, the flat had windows that did not lock.

Ms Abbott's landlord claimed instead that the agreement was ended unlawfully, and sued for compensation for loss of rent. Ms Abbott defended the landlord's claim in the Victorian Civil and Administrative by giving evidence as to the poor security of the premises and establishing the grounds for her termination of the agreement.

The Tribunal has not published its decision on the matter, but according to the media reports Ms Abbott was successful (and the landlord is sore about it).

Good on Frances Abbott. All Australian States and Territories have residential tenancy laws that place obligations on landlords in relation to the security of rented premises. The obligations vary between jurisdictions – in Victoria, landlords are specifically required to provide locks on external doors and windows; in New South Wales, the obligation is stated more generally so that landlords must provide locks and security devices to ensure that the premises are reasonably secure – but nowhere can landlords rely on the old principle of caveat emptor to let insecure and unsafe premises.

If you are concerned about the security of your home, seek advice about how you can assert your rights.

NSW tenants – you're billionaires!

Congratulations, tenants of New South Wales – you're billionaires!

According to the annual report of the NSW Rental Bond Board, at some point last year the total value of tenants' bonds lodged with the rental bond board ticked over $1 billion for the first time. At 30 June 2013, the total stood at $1 043 000 000.

All of it tenants' money.

That billion dollars earned interest: a handy $58 million for the year. Most of that interest was divvied up and paid out for various purposes.

All up about $38 million – almost two thirds of the interest earned – went to the NSW State Government. The largest part – a bit over $24 million – went to the NSW Department of Finance and Services for 'administrative services' rendered to the Bond Board.

Another $13.5 million went to the Consumer, Trader and Tenancy Tribunal, as a contribution to the cost of its operations (a similar contribution will be made to NCAT). It's true that tenancy is a big part of the Tribunal's business: across its three tenancy-related divisions (Tenancy, Social Housing and Residential Parks) it received more than 51 000 applications. Of these, 83 per cent were made by landlords.  

And another $500 000 went to NSW Fair Trading, as a contribution to the cost of its telephone information service, which gives tenancy information to tenants and landlords alike.

Out of the remaining third, $7.5 million went to the Tenants Advice and Advocacy Program: in other words, your TAASs, which provide information, advice and advocacy to tenants – never landlords. Tenants advocates like the work, so thank you tenants; we also reckon tenants get a very valuable service for their money.

A little over $3 million went to not-for-profit financial counselling services, a little over $2 million went to the No-Interest Loans Scheme, and a little over $400 000 went to The Aged Care Rights Service. These are valuable services too, and we encourage you to use them if you need them.

And $2.5 million went in grants to affordable housing schemes – in particular, as the NSW State Government's contribution to NRAS projects. 

Last – and least – $132 000 went to individual tenants, in interest payments on bonds paid out at the end of tenancies.

That leaves a bit over $3 million of interest not paid out over the year. This was added to the pile of surplus monies from previous years where, in total, a little more than $62 million has now accumulated.

So, tenants have some valuable services to show for their billion dollars – but we think they should have more. Between the surplus and the payments to government – particularly the payment to the Tribunal, which really should be funded by the whole of the community, not in such a large part by tenants – more monies should be directed to the TAASs, which are still funded as if they are serving the rental market circa 2002, and more should go to tenants individually.

NCAT launched

Today the NSW Civil and Administrative Tribunal (NCAT) was formally launched by the NSW Attorney-General, the Hon Greg Smith SC, and the President of NCAT, Justice Robertson Wright.

NCAT has actually been up and running since 1 January, but today was the day the plaque at the registry was unveiled, the cake was cut and the speeches were made.

A common theme of the speeches was access to justice. The first purpose of NCAT, said the Attorney-General, was to improve access to justice by simplifying access to tribunal dispute resolution – there should be no confusion or uncertainty that you'd come to the right tribunal. The President noted the significance for an orderly, just society of the type of dispute NCAT could deal with – highlighting, in particular, disputes about decisions of the State Executive and its officers.

We're hopeful too about NCAT's potential for improving access to justice. And there's one way in particular that NCAT could make a big difference – if it were allowed to resolve disputes about social housing decisions.

These are decisions, for example, about whether a person is eligible for social housing; or what sort of property they might be offered; or whether they are entitled to a rent rebate, and how much; or whether a rent rebate will be cancelled or varied.

These decisions can be a very big deal for people – a rent rebate cancellation, applied retrospectively, can result in an instant debt of tens of thousands of dollars and a termination notice.

They are also decisions that are not dealt with under the Residential Tenancies Act 2010, and so cannot currently be deal with as tenancy disputes by NCAT's Consumer and Commercial Division – even though they may be the underlying problem in a tenancy dispute. So, for example, if a public housing tenant's rent rebate is cancelled, NCAT can hear Housing NSW's application for termination of the tenancy and payment of the arrears, but it cannot hear the tenant's objection to the rent rebate being cancelled in the first place.

Currently, social housing decisions can be reviewed by the social housing landlord that made the decision and, if the tenant is not satisfied with the review, by the NSW Housing Appeals Committee. The HAC has done some good work over the years, but it has significant shortcomings: it has no legislative basis; it cannot make binding orders (only recommendations); and its own decision-making is not always as rigorous or fair as it should.

The lack of appropriate review of social housing decisions is an access to justice problem – and NCAT should be made available to address it. 

NCAT begins - new fees, new time limits

As the new year began, so did the new 'super-tribunal' – the NSW Civil and Administrative Tribunal (NCAT). Tenants and landlords should find that it is mostly the same as the old Consumer, Trader and Tenancy Tribunal. Mostly....

New fee for NCAT appeals

Some key differences. If you think the Tribunal's got a decision wrong, you no longer apply for a 'rehearing'; instead, you can make an appeal to the Tribunal's Appeal Panel. Appeals on questions of law must be heard; for appeals on other grounds, you'll need to convince the Tribunal that you've suffered a substantial miscarriage of justice, either because the decision is not fair and equitable; or it's against the weight of evidence; or there's evidence available now that was not reasonably available at the hearing. These factors are familiar from rehearings in the old CTTT.

Less familiar is the fee for appeals – $317 – which is about an eight-fold increase on the CTTT's fee for rehearings. (Before NCAT commenced, the TU suggested, unsuccessfully, that the fee for appeals in residential proceedings should be the same as the fee for applications: $38).

Alternatively, if you think the Tribunal got it wrong specifically because you weren't there to put your case, you can apply for the decision to be set aside or varied. The fee for this application is $78.

If either fee is too much for you, consider asking the Tribunal Registrar to waive the fee – you'll have to show that there are 'special reasons' for doing so.

The time limit for making an appeal is 14 days from the date of the decision, or the date of your receiving a written statement of reasons for the decision. The time limit for applying for a decision to be set aside or varied is seven days from the date of the decision.   

Time limits for other sorts of applications to NCAT mostly remain the same, because most time limits are specified in the Residential Tenancies Act or Regulation. However, for applications without a specified time limit, NCAT sets its own: 28 days from when you became entitled to make the application. These applications include applications by occupants to be recognised as a tenant, applications for rent reductions because facilitiers have been withdrawn, and applications for declarations as to whether the Residential Tenancies Act applies to an agreement.

We think imposing a 28-day time limit on these applications could lead to some unreasonable or harsh results, so will be recommending to NSW Fair Trading to specify more reasonable time limits. Until then, make sure you when you make one of these applications that you ask the Tribunal for an extension of time if you're outside the 28 days.
  

NSW Fair Trading tenancy dispute resolution service

NSW Fair Trading is promoting a dispute resolution service for certain types of tenancy disputes. If you're a tenant (or a landlord, or an agent) and you've not been able to sort out a problem yourself, you can apply to NSW Fair Trading to conduct mediation between you and the other party.

The mediation might result in a non-binding settlement of the dispute, or it might not settle, in which case you'll have to consider applying to the Tribunal for an outcome (currently the Consumer, Trader and Tenancy Tribunal; from 1 January next year, the NSW Civil and Administrative Tribunal). You'll have to consider applying to the Tribunal if the other party doesn't keep to the settlement they've agreed to, too.

It's good to know that this service is there as an option – one option amongst several. You can also contact your local Tenants Advice and Advocacy Service, who are experienced hands in negotiating with landlords and agents. Even when they cannot negotiate on your behalf can usually give you some handy tips on how best to do it yourself.

And the Tribunal is an option. You should consider applying to the Tribunal, particularly if you've been given the run around by your landlord or their agent for some time. Keep in mind that there are time limits on applications: you've got to apply within three months of becoming aware of a breach; and for some other types of dispute, the time limit is less than that.

And note that the Fair Trading service is optional, not mandatory (a mandatory process, duplicating the Tribunal's dispute resolution role in an inferior way, and complicating access to justice, would not be a good idea). 

New Tribunal commences 1 January 2014

On 1 January 2014 a significant change will take place in the New South Wales justice system: the NSW Civil and Administrative Tribunal (NCAT) will commence operations, replacing the Consumer, Trader and Tenancy Tribunal and twenty other dispute resolution tribunals and boards.

Work has been proceeding on NCAT all year – you can read more about the background, and where work is up to, here.

The TU has been involved through the State Government's NCAT Reference Group, where we've tried to ensure that the new tribunal will provide tenants at least the same level of access to justice as the CTTT. We're hopeful that it will: most of the provisions about NCAT's Commercial and Consumer Division are familiar from the CTTT, and a few things have been tidied up. For example, a restriction on rehearing proceedings where a warrant for possession has been executed has been tightened up, so that the restriction will now apply just to the termination and possession orders, and other aspects of the proceedings (say, the amount of rent owing) may be reheard (CAT Act, Sch 4, clause 12(2)(b)).

Probably more notable is that 'rehearings' in NCAT will be 'appeals' to an Appeal Panel of NCAT; that parties have a right to have an appeal heard on a question of law (section 80(2)(b)); and that the President of NCAT is a Supreme Court judge (the inaugural President, just appointed, is Justice Robertson Wright).

We're hopeful that these changes lead to better, more rigorous decisions from the Tribunal generally.
 

Congratulations, NSW tenants

Thanks to a small amount of the interest earned by the government's investment of your bond money, Tenants Advice and Advocacy Services will continue to operate in New South Wales.

The loss of the Parks and Village Service and the Older Persons Tenants Service will hurt these services, as it will hurt the tenants and park residents who have directly or indirectly relied upon their expertise over the years. But the continuation of Fair Trading's Tenants Advice and Advocacy Program - and the TAASs that it funds - gives cause for a momentary cheer.

There's been no increase in the funds available to the program, so TAASs will still be delivering their services at a cost of just three cents a day to each tenant household in NSW. It's money well spent. Despite the tight budgets within which they operate, TAASs do great work. They are local, they're on the ground, and they make a difference in the communities they serve.

Not long ago we held our annual TAAPstar awards ceremony, where we acknowledge the good work that the TAASs do. These awards are hotly contested. The many nominations always inspire us, and remind us of the ever present need for the work that Tenants' Advocates do. Here are some examples:

- New England and Western TAAS assisted a tenant who had arrears in the thousands - the tenant’s mother had been diagnosed with leukaemia and hospitalised in Newcastle. The tenant’s regular trips to Newcastle had left her unable to afford the rent. She was issued with a termination notice, and the landlord had applied to the Tribunal to enforce it. The tenant agreed to vacate the property, but she couldn't afford to pay the arrears in a lump sum. With the support of an Advocate in conciliation, the tenant negotiated with the real estate agent who agreed to a repayment plan of $30 per week.

- South Western NSW TAAS heard from a number of tenants who were being charged by the local Community Housing Provider (CHP) for repairs at the end of their tenancy, including costs that they did not believe they were responsible for. The CHP was adding an 'admin fee' to the bill, which was based on a percentage of the costs claimed. An Advocate represented these tenants at the Tribunal, and the Tribunal did not allow this admin fee at any of the hearings attended. The Advocate wrote to the CHP explaining why they should not charge this fee. The CHP’s solicitor wrote to the TAAS, stating why they believed they could charge this fee. Then with assistance from the Tenants' Union, the Advocate wrote to the Registrar of Community Housing, who engaged with the CHP about whether it was valid to claim this admin fee. As a result of these enquiries, the CHP is no longer adding an admin fee to claims for costs of end-of-tenancy repairs.

- Inner West TAAS was approached by two tenants who had been living in their property for over twenty years. They had recently made a complaint to the landlord about ongoing building works in the unit block. In reply, the landlord issued a hefty rent increase and a no grounds notice of termination. With assistance from the TAAS, they applied to the Tribunal for an order that the termination notice was 'retaliatory'. The landlord withdrew the termination notice, but pressed on with the rent increase. The TAAS assisted in obtaining summonses for the tenancy agreements of every other unit in the block. Those agreements showed what the tenants had suspected – that they were being singled out for a grossly excessive rent increase. The matter went to final hearing and the Tribunal did not allow the rent increase.

The ongoing funding of Tenants Advice and Advocacy Services means that examples like these will continue every day, in every part of New South Wales, for years to come. Congratulations, tenants. It's money well spent.

Boarding house residents in the Tribunal

The first applications by residents under the Boarding Houses Act 2012 have started showing up in the Consumer, Trader and Tenancy Tribunal – and the signs are that the Act's occupancy principles are indeed a welcome measure of justice for residents.

In one case, a former resident (we'll call her 'F') sought the return of her security deposit – the proprietor had kept the lot because F had moved out early. F had initially gotten an order from the Tribunal for its return under the Residential Tenancies Act, but the proprietor got a stay on that order, on the ground that this had been a lodging agreement, so the Act did not apply.

So, with the help of a TAAS advocate, F made out an application under the Boarding Houses Act, arguing that keeping all of the deposit was a penalty – and penalties are prohibited by occupancy principle 3. F and the proprietor came to a mutually acceptable settlement.

In another case, a resident ('G') used occupancy principle 8 – which, amongst other things, limits security deposits to two weeks' occupancy fee – to get a refund of a $100 'key deposit'. This additional impost – sometimes called 'key money' – is an old lurk, long-outlawed in relation to residential tenancies. Now, in G's case, the Tribunal has determined that security for the keys is covered by the two weeks' security deposit, and requiring any additional amounts breaches the limit in OP 8. Order for the refund of the key deposit.

There's nothing extreme about these cases: just good, fair results.