Hundreds to lose homes if Govt repeals 1948 Act

The NSW State Government proposes to repeal the Landlord and Tenant (Amendment) Act 1948 – known around here as the 1948 Act.

If it does, upwards of 600 persons – mostly aged pensioners – will lose their homes of many years.

(Rod Spearer, 1948 Act tenant, in his Newtown bedsit.)

The 1948 Act controls rent increases and evictions for so-called 'protected tenancies'. No new protected tenancies have been created for more than 25 years (and no more can be created). Between 600-1400 protected tenancies – all more than 25 years old, some much older – remain in existence, according to the estimate of the Older Persons Tenants Service.

Generally speaking, properties covered by the 1948 Act become 'decontrolled' only when the tenant moves out or dies. As a result, controlled properties trade at a discount. Repeal the 1948 Act, and the owners stand to gain a windfall.

Repeal the Act, and all of those tenancies will be terminated, and hundreds of elderly tenants, of limited means, will face homelessness. 

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A disturbing prospect. So is the process by which the proposed repeal is made.

The proposal is part of a review by NSW Fair Trading of 'red tape'. It's one of a miscellany of issues, including regulations on upfront gym fees and the Warehousemen's Liens Act 1935. In its discussion paper, NSW Fair Trading states of the 1948 Act:

It is unknown whether any protected tenancies still exist in NSW.

This is wrong – and Fair Trading should know it. We wrote to them about OPTS's 600-1400 estimate last October. OPTS dealt with 28 known protected tenancies in its casework in the year to June 2012. Your correspondent spoke to a tenant under the 1948 Act on the phone the other day. The Herald has too. Fair Trading's wrong statement misinforms and potentially misleads the public discussion of the proposed change.

And the 1948 Act isn't 'red tape'. Everyone affected by it – tenants and landlords – made their arrangements long ago. These arrangements shouldn't be changed by repeal of the Act now, when tenants are in their old age.

Sick of over-regulation (part 2): restrictions against additional kids and other occupants

We've always said that the prohibition on keeping a pet without the landlord's consent is the most bothersome term commonly seen in tenancy agreements (even more so than the term requiring you to inform your landlord of any infectious disease you might contract).

But there's another contender: the term that sets the maximum number of persons who may live at the premises. 

Fair enough that landlords don't want their premises being let in lodgings to sundry others and becoming overcrowded. But the term for a maximum number of residents is misused, and unreasonably restricts tenants when they're making personal decisions about their households.

First, most landlords and agents set the maximum at the same number of persons in your application for the tenancy – without regard to the size of the premises, and without regard to whether a household might reasonably grow. There's nothing in the Residential Tenancies Act 2010 that says the maximum number must be reasonable, and nothing that allows a tenant to get an unreasonable restrictive maximum varied.

If a tenant wants it varied – say, to accommodate an additional child – they must ask the landlord's consent.

We're aware of a case where a couple wanted to foster two kids. They asked the landlord – because they were two persons in a five-bedroom house, and the maximum number of occupants allowed was – yes you guessed it – two. The landlord refused consent.

And if a tenant goes forth and multiplies without their landlord's consent, the landlord can serve a termination notice, and go to the Tribunal for a termination order, on the grounds that the tenant is in breach.

We're aware of a case where a tenant (initially with two kids, in a three-bedroom house: maximum three occupants allowed) came to an arrangement with her ex-partner for shared care of her third child, a kid with a disability – both stayed a few nights each week. During an inspection the landlord was disconcerted to discover the third child, and a bed made up in the lounge room (the tenant asks: 'do you expect me to share a bed with my ex-partner?'). The landlord gave a termination notice and applied to the Tribunal, where the tenant – humiliated – was questioned as to who she has to visit her and for how long.

In the end the Tribunal declined to terminate the tenancy, and said it was okay for the ex-partner and the additional child to be at the premises – provided it was temporary. It then made a specific performance order that the tenant not allow persons in excess of the maximum to live at the premises.

Most landlords aren't interested in interposing in tenants' private, personal household arrangements – but where it happens, it is grossly offensive. Our position is:

• let landlords have their term for a maximum number of residents – provided the number is reasonable, considering the size of the premises and number of bedrooms; and
• let tenants go to the Tribunal for an order varying the maximum number if it is unreasonable, or if it restricts a child from joining the tenant's household.

Update on Boarding Houses Act 2012

The new Boarding Houses Act 2012, which was passed by the NSW State Parliament in October, has yet to commence.

Our latest advice from the State Government is that it will commence in stages: first, the provisions about the Boarding Houses Register in January 2013; then the rest of the Act sometime after that.

In our view, there's no technical reason why the provisions about occupancy agreements couldn't commence sooner rather than later. We're taking this up with the State Government.

Strata redevelopment proposals expose flaws in the housing system

New South Wales' first strata title schemes are now more than 50 years old; there are also plenty of even older buildings that have been subdivided into strata units over the years. With age these buildings have sustained a bit of wear and tear (some residents may feel the same about themselves!). But many are desirably-located, in inner and middle Sydney.

Developers have had their eyes on them for some time, but their designs are often frustrated by the necessity of getting every single owner to agree to sell up and terminate the scheme. Now the NSW State Government is having a look at them too.

In its current review of strata title law, NSW Fair Trading is considering changing the law about terminating strata schemes, in order to facilitate 'urban renewal'. Suggested changes include removing the requirement of a unanimous decision by owners to terminate – instead a majority would do, with some owners having to sell up against their wishes. Fair Trading is asking for feedback on what size of majority is appropriate, and whether there should be a process for owners to collectively sell their units or participate in the redevelopment.

We think that before it goes any further in considering these details, the NSW State Government should first consider the wider housing implications of such changes. We're worried that without the State Government also committing to a stronger affordable housing policy and additional investment in social housing, these changes may result in thousands of households losing relatively affordable and – in the case of owner-occupiers – secure housing.

We have identified two groups of people who we believe would be particularly vulnerable. 

The first are older, lower-income owner-occupiers. From our analysis of data from the 2011 Census, we calculate that there are about 29 000 older, lower-income owner-occupiers (aged 60+, income less than $60K, no mortgages) living in strata schemes in the inner and middle rings of Sydney. Of this group, two-thirds (66 per cent) have incomes of less than $600 per week.

These residents may have lived in their strata schemes for many years, and have deep links to the local area. They may also have no assets other than their strata unit and, if they were forced to sell their unit because of the termination of their scheme, they may not be able to afford to buy again in the same area. This is a real possibility, especially if the market for units in the scheme is limited (because the scheme is run-down, and there are insufficient funds for repairs, there may be few or no prospective purchasers other than developers). 

In the event of the termination of their schemes, these older, lower-income owner-occupiers may be faced with choosing between buying again out of their area, or renting locally. Buying and moving may mean losing their social and cultural links and connections to local services, such as medical assistance. Renting would mean at least some time spent in the private rental market, which offers very little security of tenure. These persons could apply for social housing, but may be ineligible because of the income and/or assets criteria; even if eligible, waiting times for most types of social housing dwellings in the inner and middle rings of Sydney are between five and 10 years, or more than 10 years.  

For a group that has enjoyed low housing costs and high security, and expected to continue to do so in their old age, these may appear to be a very unsatisfactory set of housing options indeed.

The second group are older, lower-income private tenants. From the 2011 Census data, we calculate that there are about 14 000 older lower-income private tenants (aged 60+, income less than $60K) in strata schemes in the inner and middle rings of Sydney. Of this group, almost 5 000 live alone, and of these, about two thirds (66 per cent) have incomes of less than $600 per week.

Unlike owner-occupiers, these residents do not enjoy secure tenure, and the available Census data do not disclose the affordability of their housing. We acknowledge that the supply of rental accommodation in inner and middle Sydney would probably – eventually – be increased as a result of the redevelopment of older strata schemes. Nonetheless, we are concerned that when a strata scheme is terminated, these residents would face an unsatisfactory set of housing options like those faced by older, lower-income owner-occupiers. It is likely that they would not be able to rent affordably in the local area, whether during the redevelopment, or afterwards when the redevelopment of their particular scheme is complete – as the new premises will almost certainly rent for substantially more than those in the old scheme, and these renters have little prospect of increasing their incomes. They would therefore have to move away, or try to rent unaffordably locally while waiting for social housing. 

These vulnerable groups of strata residents – and other residents who may be adversely affected by urban renewal – need more than legislated safeguards in a reformed strata scheme termination process. They need a better set of housing options – better than those presented by our current planning and social housing systems and tenancy laws.  

The planning system makes provision for the development of affordable rental housing, but its approach is mostly permissive and voluntary (per the Affordable Rental Housing SEPP, and some voluntary planning agreements); there is legislative provision for a mandatory approach (under s 94F of the Environmental Planning and Assessment Act 1979 (NSW)), but the State Government has restricted this approach very narrowly to only a handful of sites in Sydney. The whole of the planning system is now under review by the State Government; it has flagged that there will be a high-level ‘Housing Supply and Affordability Planning Policy’, but there is no indication yet that it will strengthen the mandatory provision of affordable housing – or even its permissive, voluntary provision. 

The social housing system is stuck in a state of no net growth, and has been for more than a decade. Given that the population is growing, no net growth means the social housing system is declining relatively. As indicated by the waiting times above, the social housing system is no longer directed to serving people who simply need affordable housing: in most cases, an applicant must experience a crisis before they are served.  Most social housing allocations (70 per cent) are now made on a priority basis, rather than a wait-turn basis (30 per cent); five years ago, those proportions were reversed (download Shelter NSW's NSW Housing Factsheet for these figures and more).

  

Our tenancy laws enshrine insecurity by failing to give even the modest assurance that a tenancy may be terminated on reasonable grounds only. Landlords continue to be allowed to give termination notices without grounds and, under provisions that commenced with the Residential Tenancies Act 2010, there is now no discretion for the Consumer, Trader and Tenancy Tribunal to decline to order termination on the basis of a no-grounds notice. This is an injustice to the tenant receiving the notice, and makes tenants as a class needlessly insecure in their homes.

The urban renewal contemplated in NSW Fair Trading's strata review may expose thousands of people to these flaws in our housing system, and place the flawed system under further stress. We're asking that the NSW State Government  review the housing implications of proposals to facilitate urban renewal, including those relating to strata scheme terminations, with input from all interested State Government agencies, non-government organisations and members of the public, with the objective that all persons who are unhoused by urban renewal should have access to affordable, secure alternative housing in the location of their choice.

Renting with pets in Sydney: survey

If you're a pet-owner who rents in Sydney (or have done in the past 10 years), researchers at the University of Western Sydney would like to hear from you.

The Renting with Pets in Sydney survey aims to create a greater understanding of how the rental market works – or doesn't work – for pet owners.

Complete the survey online at http://www.uws.edu.au/rentingwithpets.

The researchers will also be conducting interviews with pet-owners who rent. To participate, contact the researchers through the Renting with Pets in Sydney survey page.

We look forward to the reading the researchers' report. The Tenants' Union's recent submission to the Companion Animals Taskforce about pet-owning in rental housing can be found here.

A bit of perspective with the International Union of Tenants (part 2)

As we discussed last week, the Secretary-General of the International Union of Tenants, Magnus Hammar, has been in town to talk with tenants and workers – part of the IUT's role in keeping up the international exchange of ideas and intelligence about renting.

Magnus's work for the IUT is sponsored by the Swedish Union of Tenants, and we were especially interested to hear about how our Swedish counterparts operate. In some ways it's the same – and in some ways it's very different.

(KNISLINGE sofa, in KUNGSVIK brown)

Like the Tenants' Union of NSW and the Tenants Advice and Advocacy Services, the Swedish Union of Tenants provides tenants with legal information about their rights and obligations, and works on policy and law reform to advance tenants' interests. 

Unlike us, the Swedish Union of Tenants is that country's largest non-government organisation, with over half a million members – almost half of all households who rent are paid up. 

Also unlike us, it has over 700 employees – after all, they need this many workers when it comes to collectively negotiating rents with Sweden's municipal housing companies and landlord organisations.

Membership costs about 70 Swedish krona – about A$10 – per month. For that you get access to the Union's legal information and collective rent bargaining services, as well as discounts on a range of services from affiliated companies – for example, at the moment you can get 50 per cent off Flügger paints (all sizes and colours), and 20 per cent off Fiona wallpaper!

(Pause, gentle reader, and reflect on what would happen if the Tenants' Union of NSW were to offer tenants discounts on purchases of housepaint.)

The business of providing tenants advice and advocacy services in New South Wales is a much more marginal enterprise. Here the Tenants Advice and Advocacy Program pays the wages of about 100 workers at Tenants Advice and Advocacy Services throughout the State and at the TU, at a cost of three cents per day (or 90 cents per month) for each renter household. The money comes from interest earned on tenants' money (in the form of bonds lodged with Renting Services, and payments in agents' statutory accounts) – but it is just a fraction of the interest, with much larger slices going to the Department of Finance and Services and the Consumer Trader and Tenancy Tribunal. 

You don't have to pay to use a Tenants Advice and Advocacy Service (because most tenants pay a bond, you've already paid) and you don't have to join the Tenants' Union (but if you want to, we'd love you to join). 

What we do ask is this: if you've benefited from the work of a TAAS, tell your State MP about it. 

Maybe you've received phone information or advice from a TAAS, or had a TAAS advocate advocate for you at the Tribunal, or read a Tenants Rights factsheet, or read a TU submission that spoke for your interests. 

Let your MP know that you value the service, and that you want more of your bond interest to go to expanding the service.  

And tell us, too, about how a TAAS has helped you. We'll keep making the case for more services for tenants, and better tenancy laws, and working for the day when a tenant doesn't have to move to Sweden to pay a decent rent and do a little decorating.

A bit of perspective with the International Union of Tenants (part 1)

Yesterday we had the pleasure of hosting Mr Magnus Hammar, General Secretary of the International Union of Tenants, for a day in Sydney. Mr Hammar is touring the east coast of Australia following his address to the 7th National Housing Congress in Brisbane last week.

We started the day with a drive out to Rosemeadow/Ambarvale and Claymore, where we met and talked with local tenants, and caught up with staff of the South Western Tenants Advice and Advocacy Service.

Residents of Rosemeadow/Ambarvale spoke of their resolve in the face of redevelopment, and the relocations that they felt forced into by their landlord - Housing NSW. Their stories gave us a stark reminder that restrictions on eligibility for social housing, combined with limits on the availability of appropriate housing for people with mental illness or disability, can lead to dysfunction and despair within the neighbourhood. Sometimes this system fails just about everybody - and it's no wonder that long-established tenants express reservations when told they must move away from all that they know and love.

 

Residents of Claymore told a slightly different story, borne of a different set of circumstances. For these tenants, redevelopment and relocation remain an unrealised threat to the community that has been their home for 30 years or more. Some homes have already been demolished, but the funds required to rebuild those places have not yet materialised. Many doubt they will ever see the brand new houses that have been promised, and in the meantime the uncertainty sees their local infrastructure continue to deteriorate. But these tenants know that no matter what conditions are like on the outside, their community comes from what's inside their homes and gardens, across the many winding streets of their town.

We then traveled back into town for a look at some of the heritage listed public housing buildings in Millers Point, many of which face the continued threat of sale by the NSW Government ...

... and the iconic Sirius Building on Cumberland Street, The Rocks: built to replace stock that was demolished in the 1970's, before green bans were imposed and the wholesale redevelopment of this historic area was stalled ...

But then it was time to let Magnus do some of the talking. We stopped in at the Customs House Library to hear some of Mr Hammar's perspectives of how rental housing in Australia compares to housing markets in Europe.

It was interesting and informative stuff. We'll leave you for now with a few of the slides from Mr Hammar's presentation, for a bit of an impression of where Australia fits into the global picture. We'll return with more details on this international perspective in a later post.

But first - we must express our heartfelt thanks to the tenants of Rosemeadow/Ambervale and Claymore for having us over, and to Mr Hammar for sharing some of his time in Australia with us.

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