Thursday, December 15, 2011

A sesquicentenary of recaption

The year is 1861. The place: stately Burghley House, ancestral seat of the Marquess of Exeter. The grand house and magnificent grounds are usually a balm to Brownlow Cecil, the 2nd Marquess, but today his lordship is in high dudgeon.

A poacher has been trespassing on his grounds again, filching his lordship's rabbits.

(Dead Hare and Partridges, by Jan Weenix)

Word reaches Mr Higgs, the Marquess's faithful servant, that the poacher is selling the rabbits in a local pub. With another of the Marquess's men, Mr Higgs is dispatched to the pub; the scoundrelly poacher has already departed, but one of his customers, a Mr Blades, is still there – with the dead rabbits. A fight ensues; Mr Higgs emerges with the prize – the dead rabbits – but he and his fellow servant are subsequently sued for assault by Mr Blades.

'Not to worry, Mr Higgs', says the court, 'you were merely exercising your master's ancient common law remedy of recaption. There's no liability for assault. Judgment for the defendants.'


We couldn't let the year pass by without noting that it is the sesquicentenary of Blades v Higgs [1861] ER 693; (1861) 10 CB 713, that seminal case on the law of recaption: that is, the ancient common law self-help remedy of taking from someone, including through the use of reasonable force, something that lawfully belongs to you.

You might ask: what (on earth) does this have to do with tenancy? Does it mean that tenants who have been evicted can forcibly recapture their goods from their ex-landlords?

Well, the short answer is 'no'. Even if Blades v Higgs was admirably straightforward, the whole of the caselaw on recaption is old, complicated and inconsistent. Furthermore, in the most recent development in the law, the case of Toyota Finance Australia Ltd v Dennis [2002] NSWCA 369 (which involved – sign of the times – a car finance company and a pie van, rather than a marquess and his dead rabbits), the NSW Court of Appeal declined to follow Blades v Higgs, and restricted forcible recaption to where the wrongful possession was wrongful from its inception (and a landlord who finds themselves in possession of a former tenant's uncollected goods has not taken them wrongfully).

There is, however, a deeper connection between Blades v Higgs and tenancy law in present-day New South Wales.

For you see, Brownlow Cecil, the 2nd Marquess, had a son, William Alleyne Cecil, the 3rd Marquess -

(Note the dead rabbit worn under the chin)
- and the 3rd Marquess had a daughter, Lady Catherine, who married one Henry de Vere Vane, the 9th Baron Barnard -

- and great-great-great-great-great-grandson of the statesman of the English Commonwealth, Sir Henry Vane the Younger.

As such, Baron Barnard was also the third-cousin thrice-removed of Sir Henry Vane-Tempest, the 2nd Baronet Vane-Tempest of Wynyard, from whom descended...

...the Vane-Tempests of Condoblin, New South Wales, the respondent landlords in Rosberg v Vane-Tempest, an important case on the law relating to goods left behind after termination of a tenancy. In that case, the landlords unlawfully disposed of goods belonging to the applicant tenant, who did not seek to forcibly recapture the goods, but instead applied to the Tribunal for compensation. Despite the advocacy of legendary Koori advocate Cecil See, the Tribunal held that under the Residential Tenancies Act 1987, as the law then was, the Tribunal lacked the power to make orders for compensation for goods left behind and unlawfully disposed of.

For the TU and the TAASs, this became an important point of law reform – one that was achieved with the passage of the Residential Tenancies Act 2010, which expressly provides that the Tribunal may make an order 'requiring the landlord to pay compensation for goods disposed of by the landlord or landlord’s agent otherwise than in accordance with this Division' (s 134(1)(a)).

Or so it seemed. Now, developments in holiday law mean that awards of compensation for non-econonic loss – and many cases about goods left behind are about their sentimental, non-economic value – are subject to the thresholds and limitations of the Civil Liability Act 2002, which would have the practical effect of ruling out compensation in these cases altogether.

So the work of law reform continues. We'll be at it again next year, which also promises anniversaries even more auspicious than that of Blades v Higgs. Early in the new year it'll be the first anniversary of the 2010 Act, and we'll be having a close look at how it is going. And 2012 is the centenary of the Housing Act 1912, and hence the public housing system in New South Wales. We'll celebrate and otherwise observe it here on the Brown Couch.

Until then, best wishes for the season.

Tuesday, December 13, 2011

Welcome, Minister for Housing and Homelessness

Forget the horse-race journalism about which individuals are the 'winners and losers' in the Federal Government's ministerial reshuffle: the important thing is that housing is a winner, with the creation of a new, Cabinet-level portfolio of Housing and Homelessness.

Congratulations to the Minister for Housing and Homelessness, the Hon Robert McClelland.

A Housing Minister in Cabinet is something that housing advocates and their industry counterparts have asked for for years, so it's a very welcome development. (Since the last federal election, we've not had a 'Minister for Housing'; instead, we've had a Minister for Social Housing and Homelessness, who did double time on several other portfolio areas, while housing affordability was one of a hundred other responsibilities given to the hard-working Minister for Water.)

In creating the new portfolio, the Prime Minister stated that she did so 'conscious of the challenge of housing affordability' and sought 'to ensure a stronger focus on this issue in the future.' This statement of renewed priorities is very welcome too.

We might also note that the new Minister, having served previously as Attorney-General, has a legal mind – so we hope he advances the Commonwealth's involvement in tenancy law reform, as recommended by National Shelter and the National Association of Tenant Organisations in the 'Better Lease' report (that's a 1.8M pdf).

Welcome, Minister.

Wednesday, December 7, 2011

Still making sense of sales

Fair Trading NSW has just released its latest edition of The Letterbox - this time it's all about "privacy and access"...

Now, just like in the last issue, the latest Q & A session includes some comments that we're not so comfortable with.
Q: What rights do tenants have when the owner is selling the property and requires frequent access for inspections? Can tenants be asked to leave during inspections?

A: If a landlord wants to sell a rental property, the tenant must be given 14 days written notice before the first property inspection. If the landlord intended to sell the premises but did not inform a new tenant of this fact before the lease was signed, the tenant can terminate the lease with 14 days notice and doesn’t have to compensate the landlord.

Okay. We agree, but we think they've forgotten to include a closing sentence of considerable importance:
"If the landlord had no intention to sell the premises when the tenancy agreement was signed, and only later decided to sell, then once so informed the tenant can terminate the lease with 14 days notice and doesn't have to compensate the landlord."
By way of explanation, we refer to this previous post on The Brown Couch, where we extracted a relevant passage from the CTTT's decision in Kutzner v Kamp (NSWCTTT unreported). We reproduce this passage here again:
The issue for determination is whether in these circumstances the tenants were entitled to give notice of termination under section 100(1)(c) of the Residential Tenancies Act 2010. I am satisfied that it is not a requirement of this provision that the landlord must have an intention to sell the property at the time of entering into the residential tenancy agreement which was not disclosed. It is only necessary for the landlord to have notified the tenant of such an intention during the fixed term without notice prior to commencement of the tenancy. "Disclosure" in the sense used in s100(1)(c) does not mean disclosing what was known to the landlord but rather whether prior notice had in fact been given of the landlord's subsequent decision.

The question arising upon the Tenant being told of the intention to sell, is whether the Tenant had been told at the commencement of the tenancy that this would happen. It is not an answer to say that the landlord did not know then that this would occur.
It is our view that Kutzner v Kamp is based on a correct interpretation of the law.

As has been noted in comments on our earlier posts, and in conversations with tenants' advocates across New South Wales, Fair Trading NSW has sometimes given information to tenants that is not consistent with the decision in Kutzner v Kamp. To that end, it is disappointing, but not surprising, to see the information published today in The Letterbox.

On the other hand, the CTTT's annual report for 2010/2011 includes the following case study on page 35:

Click on the image to enlarge

You can find more information about what to do when the landlord wants to sell here, here and here.

As with all things, if you are not sure about a situation with your tenancy, contact your local Tenants' Advice and Advocacy Service for a chat. You can find their details here.

Saturday, December 3, 2011

Happy 173rd Birthday, Octavia Hill

The nineteenth century was the great age of the reformer, and one of the greats of the age was today's birthday girl, British housing and charity reformer Octavia Hill (1838-1912). She's not much remembered these days, but in her own time she occupied a pedestal similar to Florence Nightingale's; indeed, at the First Australasian Conference on Charity in Melbourne in 1890, the convenor, when asked about the proper organisation of charity, could answer 'oh, the best authorities are St Paul and Octavia Hill.' And her unacknowledged influence persists in social housing tenancy management today.

(Octavia Hill, looking not a day over 130.)

Hill was a reformer in the classical liberal tradition of working upon the 'character' of poor and working people – 'character', in this intellectual tradition, being a kind of mediating substance between the degrading, demoralising circumstances of the modern city and the free will of the liberal subject. Character consisted in habits, particularly of thrift, restraint and duty; these habits applied could build up more character.

Hill's particular innovation was to work upon the habits of character through the landlord-tenant relationship. She described her philosophy in evidence given to the 1885 Housing Royal Commission:

The people's homes are bad, partly because they are badly built and arranged; they are ten-fold worse because the tenants' habits and lives are what they are. Transplant them tomorrow to healthy and commodious homes, and they would pollute and destroy them. There needs, and will need for some time, a reformatory work which will demand that loving zeal of individuals which cannot be had for money, and cannot be legislated for by Parliament.

Thanks for the 'love', Octavia! Hill pursued her 'reformatory work' by managing tenancies for poor households, on a ‘five per cent philanthropy’ basis, in houses owned by private landlords and her own supporters. Bernard Bosanquet, a contemporary and supporter, described Hill’s techniques as proceeding on ‘the simple but not familiar idea that a landlord has a moral duty to his tenant’:
The system consists in the employment of trained women as agents and rent-collectors, who manage the property as any decent owner ought to manage it, but with a good deal of individual supervision…. [I]t is absolutely indispensable for the houses of people who have lost the habit of living in comfort and cleanliness.

Hill and her workers attended to repairs and improvements, and in return insisted on payment of the rent strictly as it fell due – less for any commercial reason than for the lesson in thrift it taught her tenants. And Hill knew her tenants: in particular, she used the practice of collecting rent directly from tenants at their premises to insinuate a surveillance of character into their households, by inquiring after the circumstances of household members and giving advice and warnings.

This work, Hill insisted, was to be done by women only – ‘ladies must do it, for it is detailed work; ladies must do it for it is household work’. Her system was, in effect, a new application of the technique of the ‘lady visitors’ developed earlier by charitable organisations in almshouses, workhouses and asylums, and Hill herself explicitly articulated the disciplinary power of her techniques with classical liberal reformism:

It is a tremendous despotism, but it is exercised with a view of bringing out the powers of the people, and treating them as responsible for themselves within certain limits… you cannot get the individual action in any other way that I know of.

This 'tremendous despot' did not establish a formal organisation through which to conduct her system of management – it is estimated that she managed about 2 000 tenancies at the time of her death, and her workers managed more in their own schemes – but several Octavia Hill Societies were established in Europe and North America, and in 1916 her workers established the Association of Women House Property Managers. At the time, Hill’s methods of individual visiting, questioning and advice were accepted as the state of the art in reformist tenancy management, as well as being taken up more widely in the emerging field of social work.

In other respects, however, Hill's vision for housing reform was overtaken by events. She refused to countenance the public provision of housing or housing subsidies – corrosive to the character of the poor, you know – so she did not have a direct hand in the development, at the close of the nineteenth century, of the first public housing schemes. On the contrary, these schemes where much more influenced by the vision of Ebenezer Howard and the Garden City reformers, and questions of physical form, rather than tenancy management. (Hill backed the wrong pony on female suffrage too – she was opposed to it.)

But Hill's method was still a ready resource for the growing housing authorities, so over the twentieth century the very personal aspect of Hill’s method became something of a minor theme in social housing practice. In Britain and around the world, housing officers would continue to perform intensive investigations into the circumstances of applicants and tenants, and counsel them in the correct uses of their dwellings and surrounding spaces. At New South Wales's own Erskineville estate, built in the 1930s by the NSW Housing Improvement Board, a genuine English woman housing officer was employed, in the words of Pix magazine, for ‘the delicate task of choosing the families most suitable…. Miss Margaret Ratcliffe, housing manager, investigated all their personal problems, individual requirements and visited their homes to see for herself under what conditions they were living’. Decades later, the NSW Housing Commission's field manual would instruct housing officers to 'observe sleeping arrangements when visiting the premises in connection with arrears reports, etc, and take appropriate action when irregularities are found.'

And this scrutinising, moralising, 'despotisic' theme in social housing tenancy management continues today. Ironically, it is in the operation of Housing NSW's income-related rent rebate system – which Hill would have deplored – that some of the strongest expression of this theme can be found. Under the rental rebate system, tenants are required to seek their landlord's 'approval' for any additional occupants, and keep the landlord apprised as to the amount and source of each of their household members' income. And when it comes to actually paying, rent in public housing has, as in Hill’s system, a moral significance. If anything, this moral significance is heightened by the fact that they are not economic rents. In a sense, the rent rebate system objectively and precisely accounts for each tenant’s need and inability, adjusts their legal liability accordingly, and what is left is the tenant’s responsibility. Where tenants fail in their responsibility in this regard, their own culpability is emphasised. What starts out as a system for administering to people's needs ends up as a regime for policing their domestic diligence and honesty.

Many happy returns, Octavia Hill.

Friday, November 25, 2011

Marginal renters in Parliament today

It's a big day for marginal renters in NSW Parliament House today.

First there's the publication of the report of the Parliament's Inquiry into International Students Accommodation, which recommends, amongst others things, law reform for occupancy agreements with dispute resolution by the CTTT, and a scheme of registration and reformed standards for boarding houses, with regular inspections.

Then, showing how law reform for occupancy agreements can be done, Clover Moore (Independent MP for Sydney) introduces her Residential Tenancies Amendment (Occupancy Agreements) Bill 2011, which would provide for a set of fair and flexible 'occupancy principles' for all residential rental arrangements not otherwise covered by residential tenancies legislation, plus standard terms by Regulation, and dispute resolution by the CTTT.

These two pieces of work come at the end of a year that also saw the publication of the results of consultations for the Government's Interdepartmental Committee on boarding house reform, in which occupancy agreements law reform emerged as a strong theme; the Ombudsman's damning report on licensed residential centres for people with disability; and the TU's own 'Reforming Marginal Renting' paper.

On coming to power the Government identified marginal renting as a 'key' area for reform. The reports are in; it's time to act.

Monday, November 21, 2011

Think child safety

We've had a few warm days, and there's more to come as summer rolls around. For the Children's Hospital at Westmead, it's also peak season for kids being injured from falls from buildings, as people open up their windows and balconies.

With that in mind, the NSW State Government has recently launched a public education campaign to make people aware of the dangers of windows and balconies and what you can do to make them safer.

The first thing is just that: be aware. Go and have a look at your windows and balcony now. When you enter a room with a child, make it a habit to do a quick scan of the windows. When you're visiting friends and relatives over the holidays, make a check of the windows and balconies the first thing you do when you arrive.

In particular, the things to look out for are:
  • Windows that can be opened more than 10 cm. You'll want to put a lock or some other barrier on these. For ordinary aluminium sliding windows, this is usually pretty straightforward: one or two of these clamp-style locks should do the trick.

For other types of windows, you may have to consider something more permanent, like a lockable bolt or a lockable winding chain, or some form of barrier, like bars (not more than 10 cm apart). An ordinary flyscreen is not a safety barrier - they keep flies out, not kids in.
  • Balconies that have a balustrade less than 1 m high, or that has horizontal elements. The danger of a low balustrade is obvious (it's easy for adult to overbalance over these, too). What is surprising is just how many balustrades - including new ones, as pictured below - have horizontal elements, which essentially serve as a handy ladder for children.

You'll want at least some kind of barrier - glass, perspex or even a heavy mesh - covering the inside of this sort of balustrade. And, in any case, a proper lock on the door to the balcony.

  • Furniture and fixtures near windows and on balconies. Chairs, beds, tables, toilets, baths, toy boxes, planter boxes... you can find any number of things, both moveable and fixed, that kids can use to boost themselves up and over a window sill or balustrade. And keep a look out for things that aren't near a window - but which a child could drag over to one.

Whether you own or rent, there's a lot you can do yourself to make kids safer around windows and balconies. Watch them. Arrange the furniture away from the windows and balconies. Use those clamp locks, if that suits your windows. If your windows already have locks that allow them to be locked open, lock them open to 10 cm, no more, if kids are about.

If you're a tenant and more needs to be done to make your windows and balconies safer, consider asking your landlord to install some new locks, or a barrier, or a better balustrade. Unfortunately, there is nothing in the Residential Tenancies Act 2010 that you can point to that specifically requires window limiting devices that can be set to no more than 10 cm.... but the premises do have to be in a reasonable state of repair, and fitted with locks and other devices to make the premises reasonably secure. You can point to these to get defects fixed, and you might suggest that if they're doing work anyway, they might as well do it so that you can lock the windows open to 10 cm, etc.

Alternatively, you can ask if you can get the work done at your own expense. Because fitting locks or barriers will invariably be a minor alteration, your landlord cannot refuse consent unreasonably. Depending on the work, this can be expensive, but you might also think it is a small price to pay to prevent an awful injury - or worse.

(But - and this is our own education campaign directed at politicians and policymakers - how easy it is for tenants to think, 'getting windows locks fitted is expensive... and we don't know how long the landlord will let us stay here... we could spend several hundred dollars getting work done and then have to move out in three months... I'll just try to keep an eye on the kids all the time....' Far better to amend the Act to specifically require that landlords install window limiting devices, and make a safer rental housing sector for everyone.)

Tuesday, November 15, 2011

Fixing the system - one question at a time...*

There can sometimes be a difference between what a policy is intended to achieve, and what actually happens on the ground. A good example can be found in the repair and maintenance of rental properties. For over twenty years, it has been government policy in NSW to require landlords to provide their properties for rent in a state fit for habitation, and to keep them maintained in a reasonable state of repair – this is currently reflected in the Residential Tenancies Act 2010. Despite this, one of the most common complaints of NSW tenants is that it can be difficult to get repairs done (the statewide network of Tenants’ Advice and Advocacy Services takes between 6,000 and 7,000 calls about repairs each year).

That is not to say that landlords always avoid their repair obligations. But even with the best of intentions, the policy does not uniformly achieve its objective. (Thankfully another policy – that of dispute resolution through the Consumer, Trader and Tenancy Tribunal – means that the objective is not thwarted in its entirety… Well, at least not in every case.)

A key strength of the Tenants’ Advice and Advocacy Services is our ability to identify and monitor practice that does not properly align with an established policy. We do this by talking to tenants – or, more specifically, by answering questions about tenants’ rights and providing advice on how best to resolve tenancy disputes. This provides us with a formidable insight into how well renting laws, and the policies on which they are based, are working.

As a statewide network, we can observe the proliferation of trends in tenancy management practices throughout NSW, because we get a clear picture of the types of situations tenants are faced with on a daily basis. We’re well placed to see how trends affect tenants, and, because we are uniquely focused on residential tenancy law and practice in NSW, we’re also well qualified to comment. We are able to speak with our collective observations in mind.

On the strength of this, the network’s primary resourcing body – the Tenants’ Union of NSW – is recognised by the NSW Government and its agencies as a key stakeholder in matters concerning residential tenancies in NSW. The Tenants’ Union is frequently invited to share its perspectives through regular meetings with government departments such as Fair Trading NSW and Housing NSW, as well as other relevant bodies.

When all of this comes together, we can affect systemic change. Here’s an example of how it can work…

Some time ago, Housing NSW changed the way it processes requests for repairs. It moved from a system where organising repairs was included in the role of a client service officer, to one where it is solely the responsibility of an asset management team. The change has had an unforeseen result, because when a tenant takes Housing NSW to the Consumer, Trader and Tenancy Tribunal, it is a client service officer who turns up to respond, not an asset manager – even if the application concerns repairs and maintenance. A client service officer might enter into an agreement with the tenant and obtain consent orders about how and when repairs will be done, but they actually have no control over what the asset management team does. Asset management teams have, in many cases, taken their “scheduled work” plans to over-ride an order from the Tribunal, and declined to conduct repairs as per such orders. This is clearly wrong, but it has been a regular occurrence. There have been numerous cases across the state where Housing NSW has failed to comply with a repair order from the Tribunal. Some of these have resulted in tenants obtaining compensation once the matter has gone back to the Tribunal for an alternative remedy.

Tenants’ Advocates first spotted the issue through conversations with tenants in the Greater Sydney area, but it soon became apparent that this is a statewide problem. The Tenants’ Union raised the matter with Housing NSW as soon as we had the evidence to demonstrate both the nature and the extent of the problem – evidence that we obtained from Tenants’ Advice and Advocacy Services who gave it with the permission of their clients. Housing NSW agreed that the issue was of concern, and undertook to look into it.

Now, it has taken some time, but we understand that Housing NSW has recently restructured its internal processes to ensure client service officers and asset managers are in more effective communication when it comes to responsive repairs.

The proof, of course, will be in the pudding – and we’ll be relying again on our conversations with tenants to see whether or not this proposed solution works.

Thus, by contacting your local Tenants’ Advice and Advocacy Service with a question about your tenancy, you’re also helping to fix the system.

* This article was recently published in the 'Tenant News', the TU's quarterly newsletter. For more articles and back-issues, see here!

Thursday, November 3, 2011

Patronising the patrons

Ever wondered what it feels like to be regarded as purely second rate?

If you're among the one in four people in New South Wales living in rented accommodation, chances are you already know.

Not only may you have to endure the absurdity of a no-cause eviction without a right of reply - rendering your home unnecessarily insecure, and undermining the 'balance' between landlords and tenants that our current renting laws were supposed to achieve (we've talked about this many times before - see here, here and here) - but you will also, from time to time, come across standards of behaviour amongst the propertied 'elite' that will leave you in little doubt as to your apparent position in the Australian social hierarchy.

Examples of this phenomenon can be found all over the Brown Couch: wedged down the back of the seat, under the cushions, and scattered throughout the mass of well-thumbed tomes over there on the old pine coffee table... It's almost as though someone stuck a "kick me" sign to your back, just as you stooped forward to sign your latest residential tenancy agreement.

Here's another example of the sort of thing we're talking about, courtesy of a tenant on the NSW mid-north coast:

... and as it happens, this particular tenant wasn't even in arrears. They'd just missed a payment and were thus not the expected 14 days in advance. (Technically, any termination notice issued on that basis would be invalid - but of course that rarely stops it from happening.)

Many landlords, and the real estate agents who work for them, tend to lord it over their tenants. Quite simply, this is because they can. Indeed, our national obsession with wealth creation through property acquisition almost requires it - and our renting laws well and truly enable it. You see - for the time being at least - there's not the kind of money in rents that you can get from capital gains, and this means that when it comes to dabbling in real estate, tenants often just seem to be in the way... so naturally the law allows landlords to move them on without needing a reason.

But it runs deeper than that. Without the security of knowing that you can't lose your home without some kind of crisis attached to your own ability to pay for it, as a tenant you become accustomed to simply sucking up really shabby treatment. Property managers (be they DIY landlord or professional real estate agent) become just as accustomed to dishing it out. Because you don't really have a choice - they could just kick you out, and tell all their mates not to rent a place to you either.

They've got you over a barrel, and some of them just can't help but rub it in... This, we suspect, is why whenever asked whether we're renting or buying, tenants often sigh, "oh, we're just renting at the moment".

Okay, so the law has to change to ensure renting in New South Wales is not unnecessarily insecure. But more than that, we need to adjust the lens through which we see the landlord/tenant relationship. The tenant is, after all, the consumer of the landlord's (probably tax-payer subsidised and highly leveraged) 'housing service'. Without a tenant, most landlords would simply not be able to meet the monthly payment on the loan that's allowed them to buy the place to begin with. Yes, they might be in it for the capital gains, but they sure can't do it without cash-flow in the meantime.

Of course, potential new tenants are a dime a dozen at the moment, due to the unbearably high cost of buying property (we've talked about that plenty on the Brown Couch too) - so there's not a lot of 'consumer power' to be exercised on this side of the property divide. But that doesn't mean tenants should just put up with being treated like a lower class of idiot...

This is, after all, somebody's home we're talking about. Have another look at that letter above. Then ask yourself - what would you expect the bank to say to you if you were a day or two behind on the mortgage?

Tuesday, November 1, 2011

Getting passed on

Any Brown Couch readers ever had an interest rate cut 'passed on' to you in the form of lower rent?


No? Didn't think so.

Maybe we need to get the Federal Treasurer to include that message in his pre-RBA Board meeting media messages. For the past week Wayne Swan has been in the media saying that there would be 'absolutely no excuse for the banks not to pass on any rate cut that was delivered by the Reserve Bank'.

OK, so he wants to put what pressure he can on the banks – there's no harm in that, is there? Actually, we think there is, when it distracts the government from our real problem with debt, and particularly housing debt. The really important problem is not interest rates, but the huge size of the debt on which interest is levied.

But it is the banks' interest rates that have caught the government's attention, so that its reform agenda is directed to increasing competition amongst lenders – including by encouraging new sources of credit (and there's been about $14 billion worth of tax-payer funded encouragement so far, through purchases by the Australian Office of Financial Management of residential mortgage backed securities).

The risk is that lenders will compete not only through lower interest rates, but also by drumming up more business through reduced lending standards – hence more debt, and more risky debt.

What the banks really need is not the supposed discipline of the market, but the discipline of regulation, that actually gets at the amount of debt that households, and the economy, is carrying. Countercyclical captial adequancy requirements, perhaps? New controls on credit, such as maximum loan-to-valuation ratios? For more, have a look at the Joseph Rowntree Foundation's recent report on 'Tackling Housing Market Volatility' in the UK, around pages 35-40 or so.

Wednesday, October 26, 2011

Tenancy culture studies: Housos

Following the premiere on Monday of SBS's long-awaited/dreaded new series, Housos, the Institute of Tenancy Culture Studies convenes a colloquium of the Brown Couch's regular correspondents: Chris, N.C. and Leo.

Chris: Housos depicts life in public housing in suburban Sunny Vale, with Shazza and Dazza and their assorted friends and enemies – notably Franky, played by the show's mastermind, Paul Fenech. We're told by series narrator, pokie-lounge lizard Wazza, played by Ian 'Turps' Turpie, that Franky is the sort of fellow who has very good luck, and very bad luck, while Shazza and Dazza seem more consistently unfortunate. So, in this week's premiere, Dazza attempts to acquire a disability for the purposes of qualifying for the pension, while Franky literally falls into one, after resisting arrest and fleeing from the police, then stealing a fire engine, then sparking a rampage by the local Lebanese gang. (Franky loses it all when he administers an incriminating beat-down on his ex-fiancee's de facto in the Centrelink car park.)

Ostensibly a madcap satire, Housos transcends the conventions of the genre, effecting a shift in the satirical subject from the characters to the viewer. It ridicules not just its characters, but our own recognition of, and implication in, the stereotyping on which the humour depends. In this sense Housos is, so to speak, a post-satire -

No, sorry, I can't go on in this vein. The show is rubbish.
I wish it wasn't. I wanted to have something other than the predictably negative reaction to it, but Housos is so predictable, and so bad, that it deserves the predictable response.

is a tedious rehearsal of old insults and stupid antics. It's just wretchedly unfunny.
What did you think, Leo?

Leo: Housos isn't for the latte-sipping yuppies. Paul Fenech says it's by, for and with the "real people", the ones who are never shown on TV because the rest of us don't like them. Fenech knows his audience, and he plays to them. When his first series, Fat Pizza, started, it was beloved in the first place by the wogs, the young men in cars who've maybe watched Scarface a few too many times, who've listened to Tupac a few too many times.

He's continued this tradition here, along with enough hangovers of the older shows to retain the audience built in Pizza (his one-man revival effort of the word stooge cracking on after more than a decade). Is it a high-brow, intelligent comedy that Oliver Wilde fans will quote to each other as wittily constructed repartee? No, no it's not. This tickles the funny bone with just a little bit of petrol, a little bit of flesh, and a lot of crude humour. That may be exactly what his audience is after.

The gallow's humour of those faced with a horrible reality is often incomprehensible by observers. The Brown Couch has discussed the work disincentives that "Housos" face, the inadequacy of the benefits and the hoops recipients have to jump through. Is it surprising this becomes fodder for comedy? It's a ridiculous situation after all. There seems to be no political will to effect change, and there's no shortage of people willing to decry the residents of Housing as various forms of lazy, undeserving and so on. Maybe that's the way to see this show – it appeals to and deals in the life that the rest of Sydney and Australia don't want to deal with. It's the laughter of the hopeless, perhaps even the voice of the voiceless.

Chris: Oh come on, Leo! Housos employs the same sort of humour as dwarf-throwing, and is probably enjoyed by the same people.

N.C.: Well I'm not too sure about any dwarf-throwing, Chris, but look I agree. It's shaping as a series of predictably unfunny cheap shots and tired insults that have ultimately diminished my opinion of Fenech. I have struggled to find something to redeem him, given the calibre of his previous work Pizza, but I keep coming up short. There is nothing funny or clever about Housos....

It's a misguided piss-take on how 'poor people' live – but it could so easily have been something good. It could have – no, it should have taken a shot at the very bureaucracies that routinely fail to alleviate the kind disadvantage it pokes fun at. During the first episode we saw enough glimpses of incompetent cops, ambivalent Centrelink workers and a dysfunctional public health system to get a sense of just how badly Housos misses the mark. Instead of shining a light on the maze of absurdities and inconsistencies that are inherent within our welfare system – the kind of thing that would make you laugh if it didn't make you cry – we get half an hour of name-calling, money-grubbing, substance abuse, child neglect.... Need I go on?

Chris: You know I wanted it to be better, but I'll admit, going into the show I wondered: could this sort of show – given its subject (public housing tenants), given its intended approach (sharp, skewering humour) – ever be funny? And as I watched Housos, desperately wishing I was watching something else, I thought of other similar attempts at humour. Good Times (same subject) was pretty funny, though the approach is a lot more friendly. Andy Capp was occasionally funny (when it wasn't making light of domestic violence), including when it skewered Andy's own conduct. Then I thought of other recent shows, not about public housing tenants, but about other 'little guy' subjects – like Kath & Kim, The Office and, yes, Fat Pizza – which were cruel to their subjects, and funny. They worked because they exposed pretension, vanity and other foibles that all of us recognise, including in ourselves.

As you say, Leo, public housing has ways of making people poor, and to insist that there must be no joking about public housing is to inflict an appalling additional degree of poverty upon public housing tenants. And I'm sure, like you N.C., that the 'situation' of public housing can elicit responses like pretension, vanity, greed, cunning and other human qualities that are the stuff of comedy. So to answer my own question, I think Housos could have been funny – which makes its failure all the more disappointing. If I had to say something nice about it, it would be that the stunts were OK.

N.C.: If you want to see how this subject matter can be dealt with far more sensibly and sympathetically – heck, I'll even go so far as to say humourously – go and track down a copy of the British series Bread. Now there was a household of scheming Housos, who could do whatever it took to stay above the bread-line... and still have you wanting them in your neighbourhood.

Leo: Don't forget the immensely popular UK series Shameless, a comedy-drama that also focuses on a public housing family. Occassionally violent and crude, and yet it clearly connected with a wider audience than just the housing estate dwellers it is based on.

On the subject of the audience: Fenech has created a dedicated following around this brand of humour and I expect a large number of those fans to follow him here. His inclusion of characters very similar to previous shows will certainly help with that. At the same time, he also proclaims that the show is for the people living in public housing. Angry Anderson claims that one third of the cast grew up in housing commission and are simply portraying themselves.

N.C.: I keep thinking to myself, "look it's only been the one episode. Maybe we should reserve our judgement for another couple of weeks. After all, these are the guys who brought us Pizza. When it comes to stinging social satire and holding up a mirror to PC backlash, they've got runs on the board. It's possible that they've got something up their sleeves, and will surprise us next week..." But I'm not sure I really believe that. Because with Pizza you had a bunch of self confessed "ethnics" making jokes about ethnic stereotypes. With Housos they've moved into an entirely new arena, and it's one that they appear far less comfortable with.

Chris: I see next week's show is about Dazza getting Shazza to hospital to give birth – a jesting jab at the feckless fecundity of the poor. Count me out.

N.C.: Certainly they're missing the key ingredient of self-reflection that made Pizza so marketably funny.

Leo: Pizza, at its core, was about sticking it to the stooges – the customers, the boss, the cops, anyone in authority who didn't understand what really mattered to the heroes. The core here is the same, but the range of authority figures has grown as the characters are further down the ladder. That finger-in-the-air attitude has appealed to Fenech's fans for over a decade, I think it will continue here.

N.C.: I'll give it one star.

Chris: Me too. One star. For the stunts.

Leo: The jokes, the stunts and a fair number of the characters could all be lifted directly from Pizza – and that's the way the fans like it. Three stars from me.

Tuesday, October 25, 2011

Spruiker spooked

Washington Irving's short story, The Legend of Sleepy Hollow, in which the Headless Horseman dashes about on autumnal New York nights, is a Halloween favourite.

It's creepily fitting, then, that a week out from the holiday another rider is losing his head.

Terry Ryder, property spruiker, hurls the following pumpkin at the campaign group, Australians for Affordable Housing, in the business pages of The Australian:

SOME activists see property investors as the great enemies of first-home buyers.
Their core belief, unsupported by evidence or logic, is that homes are unaffordable because investors drive up prices.
Australians for Affordable Housing appears to think that nobbling investors will strike a telling blow for first-time buyers: remove negative gearing and increase capital gains tax, and homes will be affordable.
Our own modest attempt at furnishing some evidence and logic about negative gearing's contribution to the high cost of housing can be found here. Ryder, on the other hand, supports his argument by referring to a survey of opinions of first home buyers (conducted by an originator of residential mortage-backed securities) as to whom they're having to outbid.

Evidence and logic? Riiight.

The argument itself is a strange one too. Ryder says that it's not investors (we call them speculators) who are pushing up prices, it's other owner-occupiers. We might agree up to this point: as we've noted previously, the tax preferencing of owner-occupied housing is at the heart of house price inflation.

But then Ryder makes an abrupt about-turn: he says that to 'attack Australians who buy rental properties' is to 'undermine the financial base of 70 per cent Australians' [ie those who own a house].

Sounds like those speculators have been pushing up prices after all. Good thing too, says Ryder: there's a 'strong national interest in having people invest in this way.'
There's heavy pressure on people to plan for a self-funded retirement, given the stress our ageing population is placing on the taxation and welfare systems.
Let's be clear: as an investment strategy, negatively geared property speculation is not 'self-funded'. It is 'funded' by a greater fool coming along to pay more for the property than the speculator paid (being the price paid to the person from whom they bought it, and interest to the bank from which they borrowed the money) – and every other tax payer who foots the public services bill that the negatively geared speculator is allowed to cast aside.

In fact, about $6 billion worth of the 'stress our ageing population is placing on the taxation and welfare systems' comes precisely from 'having people invest this way'!

Ryder wheels about again. Too bad, he warns:
There are limited options. Buy shares or buy real estate. Superannuation alone won't cut it.
No, actually, just buying real estate won't cut it (particularly if, as Ryder says, the population is ageing – are there going to be enough greater fools to buy all the property?). Here's another option: put your money (or, if you're game, your credit-worthiness and some borrowed money) to something that makes more than it costs. Something productive.

A final pass by Ryder:
The anti-property voices in the community not only wish for a big devaluation of our homes but are lobbying government to make it happen.
It's an extraordinarily irresponsible stance...

No, actually, encouraging people to think that they can fund their retirements by unproductive speculation in real estate on the basis that prices will keep going up has a much greater claim on 'extraordinary irresponsibility'.

For a much more sensible discussion of the issues than provided by Ryder, follow this link to a recent piece by Australians for Affordable Housing spokesperson, Sarah Toohey.

Well done, Australians for Affordable Housing: you've got at least one spruiker spooked.

Friday, October 21, 2011

Maintaining relations and tenants' alterations

By now we expect you will have received and devoured the latest edition of Fair Trading NSW's monthly e-newsletter on all things residential tenancy, The Letterbox. If you haven't already done so, now is as good a time as any to sign up to have it delivered straight to your inbox.

Each month The Letterbox undertakes to answer questions from tenants and landlords about a particular aspect of NSW's renting laws. We were particularly interested in the current issue, because it covers alterations to premises. We were rather hoping that Fair Trading would mention some of the likely implications for tenants and landlords of the coming rollout of the National Broadband Network... Alas, they did not.

But we did get an interesting little snippet that's caused a bit of a stir over here on The Brown Couch. The Q & A session provides:

What responsibility does the landlord have during the tenancy to maintain alterations made by the tenant?

None. Unless the landlord agrees otherwise, the tenant is responsible for the cost of installing and maintaining any fixtures they add to the premises.

On the face of it, we can't be so sure.

The common law of property says that once a tenant affixes an item to real property it forms part of the 'landlord's inheritance', until such times as it is properly removed by the tenant (ie according to a set of developed rules) [Bain v Brand (1876) 1 App Cas 762]. Put simply, a tenant retains a limited right to remove a fixture that they have added, but while ever it remains affixed it is the property of the landlord.

The Residential Tenancies Act 2010 does not include anything that would unambiguously displace this common law principle, and it offers no clear guidance on the maintenance of tenants' fixtures.

The Act does set out some pretty clear rules about how and when a tenant can install or remove a fixture. Included in these rules are provisions that state:

66(4) A fixture installed by or on behalf of the tenant, or any renovation, alteration or addition to the residential premises by or on behalf of the tenant, is to be at the cost of the tenant, unless the landlord otherwise agrees.

67(3) Despite subsection (1), a tenant is not entitled to remove a fixture without the consent of the landlord if the fixture was installed at the landlord’s expense or the landlord provided the tenant with a benefit equivalent to the cost of the fixture.

These provisions could be interpreted to displace the common law - but for this to be so we'd need to accept a broad definition of the word "cost". If it refers to ongoing costs of upkeep, as well as the one-off cost of installation, then Fair Trading's contention about maintenance responsibilities of tenants' alterations could hold true. But this may be a bit of a stretch, because neither of these provisions contemplate the ongoing maintenance of a fixture - they deal only with installation and removal.

The Act also sets out the landlord's repair obligations - in which the definition of residential premises includes:

everything provided with the premises (whether under the residential tenancy agreement or not) for use by the tenant (s62).

Perhaps this definition displaces the common law, by excluding tenants' fixtures from the definition of 'residential premises'. If this is so, then the landlord's repair obligation would not extend to tenants' fixtures, because the obligation is to maintain the residential premises, as defined to exclude anything the landlord has not provided, in a reasonable state of repair. Accepting this exclusion would require a narrow take on the phrase "provided with the premises" - that is, an alteration made by the tenant, with the landlord's consent, would have to be seen as something that was not "provided with the premises". It is not clear that this interpretation could be universally applied to every conceivable set of potentially relevant circumstances.

There is one thing we can be sure of. The Act says:

63(3) A landlord is not in breach of the obligation to provide and maintain the residential premises in a reasonable state of repair if the state of disrepair is caused by the tenant’s breach of this Part.

Clearly, a tenant who alters premises without first obtaining the approval of the landlord cannot expect the landlord to help out with repairs and maintenance of that alteration...

But what of the tenant who does obtain the landlord's approval? Indeed, how will a landlord respond to a request to alter premises if they believe they may be liable for its upkeep?

The key message from all of this, it seems, is to make sure you reach a complete agreement with your landlord before you make any alterations to your premises. In particular, be clear from the outset whether you intend to one day remove the fixture, or to leave it behind at the end of your tenancy. Because if you are to ultimately make a gift to your landlord, it would be wise to factor in and reach agreement as to who will be responsible for the ongoing upkeep of your alteration during the course of your tenancy.

Which really brings us back to The Letterbox Q & A.

Unless the landlord agrees otherwise, the tenant is responsible for the cost of installing and maintaining any fixtures they add to the premises.

This may simply be a case of Fair Trading taking an optimistic view of the law as it stands. Sure, it's easy to explain, but we bet it's even easier to sell to all those landlords who cried foul when the idea of "no unreasonable refusal for minor alterations" was first raised. If it is as simple as all that, we'll be surprised. Then again, perhaps we're just being picky.

Regardless, it's always a good idea to be clear on what you're agreeing to whenever you set out to alter the status quo.

Tuesday, October 11, 2011

Tenancy Culture Studies: Let's Lynch the Landlord

The Institute of Tenancy Culture Studies welcomes guest lecturer, Wazdog (aka 'The Illawarra Wheeler'). Wazdog has plied his trade as a Tenants' Advocate with the Illawarra and South Coast TAAS for more than half a decade. Also a renowned commentator of all things musical in his hometown, Wazdog occasionally branches out and mixes business with pleasure...

Today, Wazdog kicks off the conversation with a look at The Dead Kennedy's iconic anti-hit 'Let's Lynch the Landlord'.

Throughout history, music has been used to express the concerns of the common wo/man. From the subversive work songs of the African American slaves in the nineteenth century to the heavy metal/rap fusion of Rage Against the Machine, musicians have attempted to connect with their audience with lyrical themes they can relate to. No better example of this exists than perhaps the great traditional folk song 'Worried Man Blues' popularised by The Carter Family in the 1930's and later the dust-bowl balladeer Woody Guthrie. A simple chord progression is supported by the simple but effective lyric "It takes a worried man to sing a worried song."

Not surprising then that popular music is littered with landlord and tenant references. The struggle of the working man against the greed of land-owners has been the inspiration behind many a song. But few are as abrasive and confrontational as Dead Kennedy's 'Let's Lynch the Landlord'.

Fronted by the outspoken prankster Jello Biafra, the band courted controversy in the early-80's with their cover-art offending future Presidential candidate Al Gore's wife Tipper, prompting the establishment of the Parents Music Resource Center (PMRC) - the group responsible for all those 'Parental Advisory' stickers slapped on albums deemed unsuitable for minors.

Taken from their 1980 debut album Fresh Fruit for Rotting Vegetables, 'Let's Lynch the Landlord' expresses a sentiment that many tenants in NSW feel, though thankfully few act upon.

Throughout the song Jello details problems with his tenancy. It's the usual smorgasbord of tenancy complaints: lack of running water, inadequate heating, a leaking roof, an oven that smells like a death-camp, disturbance from neighbours (ironic coming from a man who's made a career out of disturbing the peace), vermin, unauthorised access, and - the pièce de résistance - an excessive rent increase.

To remedy the problem, Jello urges his flatmates (along with his audience) to attack the landlord, mob style.

Now, I'm not too familiar with tenancy law in San Francisco circa 1980, but in NSW circa 2011 such a response to a poorly maintained property could see you lose your tenancy and quite likely attract criminal charges.

Though street justice is oft times tempting in a landlord/tenant relationship, the reality is that Jello would do better to seek a remedy through appropriate dispute resolution processes. In NSW this is the Consumer, Trader & Tenancy Tribunal (CTTT) - the arbitrator for tenant/landlord disputes in NSW.

All the matters raised in Jello's ode to his landlord may be dealt with in the CTTT, usually without the spilling of blood.

Taking matters into his own hands however, will only see Jello's problems worsen, as the landlord (if s/he survives the lynching) could apply straight to the Tribunal, seeking an order for termination due to injury to the landlord by the tenant.

And if the landlord was successful then poor old Jello would need to find himself a new pad for him and his punk buddies to hang out in. Of course, if convicted of assaulting the landlord, Jello may even find that his new pad comes courtesy of Her Majesty and that the phrase "unauthorised access" takes on a whole new meaning.

Thursday, October 6, 2011

Strata Wars (feat. @MyFlatChat)...

We recently spotted a tweet from @MyFlatChat that said "Tenants can take Owners Corps to Fair Trading and CTTT over common property. They're 'interested parties' under Act" - along with a link to a brief discussion about repairs to a noisy lift that had taken place over on the Flat Chat forum.*

We entered into a bit of a dialogue over this because we don't think tenants in strata units should be taking an Owners Corporation to the CTTT over repairs - they should be taking the landlord instead!

Perhaps we should explain...

Owning a strata unit means sharing many things with others - like walls, guttering, walkways, stairs... essentially anything that is "common property". When one of these things wants fixing, it's up to all the owners to pitch in and make good.

The mechanism by which this happens is the "Owners Corporation" - once known as the "Body Corporate" - and the rules by which this sometimes disparate group are made to play nice are found in the Strata Schemes Management Act 1996. The Owners Corporation is, quite simply, the owners in committee... and being required to talk to each other on a regular basis is seen as a good way to keep the peace, and have the place running smoothly. And everybody can be happy.
Well, it's a good theory.

We really must stress that there are ways of making an Owners Corporation far more complicated than the rather naive picture we've just painted - and no doubt our mates over at Flat Chat can tell you more about that. But, on our simple analysis, what happens when things don't work out?

The Strata Act sets out a process for the resolution of strata scheme disputes in the Consumer, Trader & Tenancy Tribunal. It involves, in the first instance, mediation. If that doesn't work, the matter can progress to adjudication. If adjudication doesn't satisfy the disputing parties, they can appeal to the Tribunal, where the matter can be determined and orders can be made. Each of these things will cost you over $70.

Now, technically a tenant, who is not an owner, can take an Owners Corporation to the Tribunal over repairs to common property, because they are considered an "interested party" under the Strata Act. But when you look at what's involved in the strata division, why would you when there is a sensible alternative?

Compare the above process to that for tenancy disputes - you apply for a hearing in the tenancy division - for $36 - and you get one... and even if you have to have a crack at a conciliation conference in the meantime, if you can't settle the matter you will usually get your hearing pretty soon after.

"Aha!" I hear you say... "but if it's common property, then that's a strata issue, and you can't take the Owners Corporation into the tenancy division of the Tribunal. That place is strictly for landlords and tenants! Have you lost your mind?"

Well, no, actually. Of course, you'd be correct in saying you can't sort out strata issues in the tenancy division, but you've got to admit, it is an ideal place to take a tenancy dispute.

If you're a tenant in strata, it should be your landlord who takes the Owners Corporation to task over repairs to common property. It is, after all, your landlord who has the relationship with them, not to mention a longer-term interest in the success of the strata scheme. Tenants can ask nicely for repairs (and should do so in writing), but when it comes to turning the screws on a recalcitrant Owners Corporation through a legal process, things are best left to the landlord.

If the landlord doesn't get on your side, then they're in breach of obligations to you under your residential tenancy agreement. On that basis, you can take them into the tenancy division of the Tribunal. Among other things, you can ask for an order that they take the Owners Corporation to the strata division - or at least begin the process by commencing mediation.

... and that's how you get your lifts fixed. For more information on renting in strata, see the TU's factsheet. As with all things, get advice from your local TAAS before taking your matter into the Tribunal.

*Nb - the comments on the Flat Chat forum have been updated following our Twitter conversation with @MyFlatChat.

Tax forum ends

... but we'll have to wait a little while to see what endures after the delegates go home, the chairs are packed and the data projectors are turned off.

For now, this anecdote from the Herald's Peter Martin serves as a nice ending – the People's Economist, David Koch, propounds an end to negative gearing.

NEGATIVE gearing was already on the nose when ''Kochie'' delivered his verdict.
Property manager Eddie Kutner of Central Equity Ltd had just finished putting the case for the rule that allows investors to write off losses made on rental properties against other income before selling the property and pocketing a capital gain taxed at only half their marginal rate.
It was "a responsible part of providing accommodation, a very defensible proposition".
David Koch, the finance journalist and Sunrise host, was at the summit as a community representative.
"Negative gearing on an unproductive asset? Does it just go on for time immemorial or is it time to actually put some limits on it - to say, OK for the first five years, but if it's not producing an income after that why are you there?
"It's done purely for the attraction of letting the taxman pay half. I'm not saying get rid of it all together, but there's got to be a limit - it just can't go on forever."
Mr Australia had spoken. No one returned to the topic.

Well said Kochie!

Keep an eye on TaxWatch for developments.

Wednesday, October 5, 2011

Tax forum continues

Wish you were there? Then try the live video stream!

If, on the other hand, yesterday's links have left you hankering for more good sense on tax reform, try Saul Eslake's recent's lecture, 'Australia's Tax Reform Challenge' (that's a 150K download) for the Australian Parliamentary Library.

(Saul Eslake)

In it you'll find a clear statement of some basic principles of taxation, and a cracking critique of Australia's mad negative gearing provisions.

Tuesday, October 4, 2011

Tax Forum begins

The National Tax Forum begins today: let's hope housing is front and centre in the discussion. It certainly has been in the media, with some very good pieces on last night's 7:30 report, and today on 'The Drum', as well as in last week's Herald.


The Irvine piece on land tax, in particular, moved Brown Couch reader and legendary tenants advocate, Dr Robert Mowbray, to write to us and second our motion that it be made required reading for anyone interested in housing justice.

And as Robert points out, this is not just about affordability – land tax reform would also go a long way to helping achieve greater security for tenants. This is because security is not just of matter of what the law says about the termination of tenancies by landlords (and as N.C. has recently discussed, our laws still say landlords can give termination notices without disclosing any grounds for termination whatever); it is also a matter of the structure of the rental market and the investment strategies of landlords.

The structure of the Australian rental market is distinctive for absence of large institutional investors, and the dominance of individual landlords who own one property only. These are the so-called 'mum and dad investors' – or 'amateur speculators', as they are known around here. And because land tax is levied on the total value of land holdings above a certain threshold, it strongly favours these small-holding players above large-holding institutions.

And what are these small-holding players playing at? They're after capital gains, and this means being able to sell when it suits them, including into the market for owner-occupied housing. And this means being able to readily oust a tenant and regain vacant possession of the property.

Across Australia, residential tenancies legislation reflects the basic structure and strategy of the amateur speculator-dominated market. And it, in turn, reflects our tax system.

Monday, October 3, 2011

International Tenants Day

It's 3 October, which means...

Happy International Tenants Day!

(Beautiful 2011 poster by our Swedish comrades)

When's International Landlords Day, you might ask. Why, it's every other bloody day of the year.

Enjoy the long weekend!

Friday, September 30, 2011

No cause for no-cause evictions

A no-cause eviction happens when a landlord gives their tenant a 90 day notice of termination. There's not a lot the tenant can do about a no-cause eviction, unless it can be proven that the landlord has given the notice in response to something the tenant has done to assert their rights. This is no good, and it's something that Tenants Advice & Advocacy Services have been talking about for some time...

Now, it must be said that there is nothing in the law that compels a landlord to use no-cause evictions. Housing NSW, for instance, makes it a habit to not use them. That's because HNSW knows that, as a Social Housing provider, their tenants are entitled to know the reasons behind having their tenancy agreements ripped up. (It's also because they got dragged through the Supreme Court over the issue in 1991, and lost - in the famous case of Nicholson v NSW Land & Housing Corporation (Unreported, Supreme Court of NSW, 24 December 1991)). There are, of course, several ways to end a tenancy with cause, and generally these days HNSW tries these on instead...

But several Community Housing Providers (CHPs) do resort to no-cause evictions. According to our colleagues in the Tenants Advice & Advocacy Services, there are three observable trends in their use:

1. Managing transitional or temporary accommodation - that is, signing an otherwise homeless person up to a 'week-long' fixed-term tenancy in a refuge, and handing over a 90 day termination notice as a sort of appendix to the lease. (This rather interesting practice highlights the need for reform of the marginal rental sector - you can read more about that here).

2. Managing relocations when head-leases evapourate
- that is, using a 90 day notice of termination to end the lease on a property that is owned by a private landlord, rented out by a CHP, then sub-let to a social housing tenant, when the private landlord wants the property back. This is, in theory, followed by the CHP finding another place for their sub-tenant to live.

3. Avoiding scrutiny when trying to evict a tenant for a tricky or hard to prove breach
- that is, choosing to use no-cause evictions so that tenants can't argue against the reasons behind having their tenancy agreements ripped up, or properly respond to any allegations made against them.

Reliance on no-cause evictions is irksome in any circumstance, but it is particularly so when it comes to Social Housing landlords. They should, by the very nature of their business (not to mention their Regulatory Code), take a more open and transparent approach to ending tenancies.

It is also much more irksome now under the Residential Tenancies Act 2010 than it was under the Residential Tenancies Act 1987, because under that Act tenants did still have some hope of getting through a no-cause eviction without actually being evicted - back then the Tribunal was required to consider the circumstances of the case when deciding on matters of eviction, and had the discretion to call the whole thing off if the CHPs reasons for seeking termination were unsound. (For more information on this change to the law, see the discussion on Swain and the 'circumstances of the case' in this previous post).

But what would a more open and transparent approach to ending tenancies actually look like?

Let's have a look at each of our three scenarios above:

1. Managing transitional or temporary accommodation - for short term and temporary accommodation that is intended to last only as long as it takes to find a person a secure tenancy, occupancy agreements should be used instead of residential tenancy agreements. While there is currently no law requiring (or regulating) the use of occupancy agreements, we hope that this will soon change. In the meantime, CHPs and other socially responsible organisations providing temporary or crisis accommodation are well placed to pioneer the use of occupancy agreements. A sound occupancy agreement would set out the circumstances in which an occupancy can be terminated, and how much notice will be required.

2. Managing relocations when head-leases evapourate - there's simply no need to issue a notice of termination, by either the private landlord to the CHP, or the CHP to the sub-tenant. That's because a tenancy can quite properly be terminated by repudiation and acceptance, or by consent (under section 81(4) of the Act). In either case, the tenancy lawfully ends when vacant possession is returned to the landlord - which happens as a matter of course whenever a tenant moves out of one place and into another. A notice of termination is, in this scenario, nothing but unnecessary double-handling.

3. Avoiding scrutiny when trying to evict a tenant for a tricky or hard to prove breach - for every tricky situation that a Social Housing landlord might encounter, there are probably two notices of termination that could be applied - other than the 90 day notice. These have the added benefit of providing an opportunity for tenants to respond to any allegations made against them. The Tribunal - unless it is sorely mistaken - will not terminate a tenancy with cause unless it is satisfied, on the balance of probabilities, that the alleged cause has been established. In other words, the landlord must prove their case against the tenant before an eviction can occur.

Notwithstanding all of that, there are some compelling reason to regard no-cause evictions by CHPs as unsupported by law. We've run out of time to go into more detail on that side of things this time around... and we'll keep our fingers crossed that the issue will be dead and buried well before Social Housing Month comes around again. Because when it comes to Social Housing, there's really no cause for no-cause evictions.