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.