Wednesday, August 27, 2014

Millers Point: three new homes for every property sold?

Last night a second government owned property in Millers Point was sold. Family and Community Services Minister Gabrielle Upton reports it sold for $2.56 million. This follows the first property sale price of $1.911million.

Minister Upton says for each property sold in Millers Point, the government's public housing portfolio could be increased by three. But not so long ago the Secretary of FACS said the current State Budget would deliver a 'line-ball' increase in social housing supply this financial year.

More recently, the Minister herself told the Budget Estimates committee (see page 5 of the transcript) that for every million dollars her department spends on its housing portfolio, only $190,000 – 19 per cent – goes towards new housing. Of the rest, $340,000 is used for 'improvements' (for example, kitchen upgrades), and $470,000 goes to repairs and maintenance.

Now, we're all for spending money on overdue repairs and maintenance of the government's housing portfolio, but it's a bit rich to sell other people's homes in order to pay for it. Especially when much-needed growth of the portfolio is implied, to justify the sales.

Anyway, on the basis of Minister's Estimates statement, we thought we'd see what we could do with the $4.471 million raised so far. Within the confines of the Budget, of course...

First things first, we'll have to put about $1.52million aside for 'improvements', and a further $2.1 million aside for repairs and maintenance. This leaves us with just under $850,000 to tip into the 'new housing' bucket.

$800,000 will get you a pretty swish flat in Sydney, leaving change for stamp duties, legal costs and perhaps even some champagne to celebrate.

Cunningham St Sydney - from

Or, if you wanted to replace the two Millers Point properties with a pair of dwellings, you can get a nice little studio in the same complex...

Cunningham St Sydney - from

... a spacious walk up in Parramatta...

Early Street Parramatta - from

... or a respectable family home in Campbelltown, for around $400,000.

Lindesay Street Campbelltown - from

Of course, if you wanted to replace the two Millers Point properties with six homes in Sydney, you'd be hard pressed to do it. You'd be looking at around $140,000 per home. A quick look at the real estate pages tell us you can still find homes at such low, low prices, but nowhere near Sydney. You'd have to look in places like DeniliquinSouth Grafton, Dubbo, Jindabyne, Albury and Orange.

Which leaves us with two possible conclusions to ponder: either the money will be used to buy houses in regional NSW, or more of our existing metropolitan public housing will be demolished so that we can 'replace' the Millers Point homes on land already owned by the NSW Government.

Help us keep track of what's happening with public housing sales and estate redevelopment. Check out our Clearing House blog for more information.

Joint sector statement on Budget social security changes

The Tenants' Union of NSW has joined with the Australian Council of Social Service (ACOSS) and more than 100 other community sector organisations in a statement on social security changes proposed in the Federal Budget.

We, community sector organisations and leaders from around the country, have come together to express our deep concern about changes to social security payments currently being considered by the Federal Parliament.

We support a robust safety net to protect people in the event that they are unable to support themselves due to unemployment, caring responsibilities, disability, incapacity or other unforeseen circumstances.

We recognise that most of us will rely on this safety net at some point in our lives, and reject the division between those who 'lift' and those who 'lean'. We all lift and lean at different points in our lives, sometimes simultaneously....

To this end, we ask our elected representatives to reject the following budget measures:
  • The removal of income support for six months of the year for young people looking for work (see factsheet here)
  • The transfer of 22-24 year olds from the Newstart Payment to the lower Youth Allowance (see factsheet here)
  • The indexation of pensions to CPI rather than wages including the Age Pension, Disability Support Pension, Carer Payment, Parenting Payment Single and Veterans Payments (see factsheet here)
  • Changes to family payments which will reduce support to low income families including sole parent families (seer factsheet here)
  • Increasing the Age Pension age from 67-70 years, in the absence of any increase to Newstart (see factsheet here).

Read the full joint statement at ACOSS.

Speaking for ourselves, as tenants advocates, we can only add our particular concern for what these changes would do to the ability of young people and people in receipt of social security payments to get and stay housed.

For our further thoughts on the Budget and fiscal policy, look under our Federal Budget and Modern Monetary Theory labels.

Thursday, August 21, 2014

Families renting – part 2

Some more figures on families who live in rental housing, courtesy of Brown Couch numbers man, Leo.

Of all families* in New South Wales:
  • just under one quarter (23.9 per cent) of them live in private rental housing; and
  • another five per cent live in social housing; so
  • in total, 28.3 per cent of families rent.

Of single parent families in New South Wales:
  • 35.3 per cent live in private rental housing; and
  • another 11.8 per cent live in social housing; so
  • in total, just under half (47.1 per cent) of single parent families rent.

* families with dependent children (see yesterday's note).

Wednesday, August 20, 2014

Families renting

Our Victorian colleagues, the Tenants' Union of Victoria, are in the media today with some research into the growing proportion of families with children who live in rental housing.

For your info, Brown Couch number-cruncher Leo has pulled out from the 2011 Census the equivalent figures for New South Wales*:

Private rental households (NSW), 2011

Single                     25.3 per cent
Couple                    19.8 per cent
Family                    41.5 per cent
Group                       9.6 per cent

In fact, almost a quarter of all persons living in rental housing in New South Wales are aged 14 years or younger.

The problems of unaffordable rents and insecurity of tenure – not to mention restrictions against growing households – affect not just the adults who sign the leases, but children too.

* The Census, properly, refers to couples without children as a type of family. For consistency with figures as presented in The Age, we've accounted for them under the category 'Couple', separate from the category 'Family', which here means family with dependent children.

Friday, August 15, 2014

Under 30, renting, working...

In today's guest appearance, former Tenants' Advocate Hayley Stone discusses housing and income support for young people in Sydney.
I recently applied for a rental property. As part of this process, I provided my licence and my employment history, including the direct contact details of my past and current employers, to a real estate agent.

Federal government proposals around income support for jobseekers under 30, combined with an increasingly 'flexible' job market, could bode ill for under 30’s seeking to live independently in rental accommodation. The repercussions could impact upon a person's housing security for years to come.

The introduction of a waiting period - for as long as six months - before being eligible for government assistance, and a six month cap on assistance in any 12 month period of unemployment, would put pressure on families to provide for younger relatives who find themselves jobless. It assumes that parents will be able to, and will want to support adult children who fall on hard times. But this isn't always true. In any case, many people under 30 already live independently in the rental market.

But with no guarantee of income support, a person under 30 will become an automatic risk for landlords, so under 30s may face discrimination when applying for new tenancies. Real estate agents already have access to birth dates through licences, passports and other forms of personal identification. They can determine employment status through pay slips and calls to employers.

As part of their responsibilities to landlords, real estate agents must determine the ability of potential tenants to pay the rent. Changes to income support for under 30’s might lead to prejudice against even highly paid under 30s working to contracts or in casual jobs, as income support may not be assured if those jobs dry up. If applicants are already unemployed, there is little incentive for landlords to take them at all, as there may be no guarantee of income past six months.

The problem is, this discrimination will only be able to be speculated on, as the way that tenancy applications are assessed makes it impossible to know the reason why an application is rejected. Unsuccessful applicants will never know who they were up against or what criteria was used to rule them out, making it all but impossible to demonstrate if discrimination is unlawful.

Changes to income support would mean that even if real estate agents and landlords don’t stop taking under 30s as tenants, they might start putting them on shorter term leases to coincide with their employment contracts or limiting those on income support to 6 month agreements. They might also look to introduce “rental guarantees” or asking under 30’s to declare assets in the case that they are unable to pay the rent, to make it easier for landlords to take debt recovery action.

For those under 30s who are in fixed term residential tenancy agreements, proposed changes to income support could be catastrophic if their employment situation tanks. Two weeks rent arrears is sufficient to start the eviction process. Even those unemployed with good employment histories are looking at a waiting period of 4 weeks if they lose their job. It is safe to anticipate that under 30s will have to utilise break-fee clauses to leave properties they can no longer afford to rent, or to apply to the NSW Civil and Administrative Tribunal to terminate on hardship grounds (which is not without the risk that compensation will need to be paid to the landlord). If tenants are unable to pay break-fees (6 weeks in the first half of the fixed-term, 4 in the second half) there is the risk of being placed on a tenant database for outstanding debts. These databases are regularly searched by agents prior to selecting tenants and listing last for years, and a listing remains until the debt is paid.

While these income support measures are being considered in Canberra, we are experiencing a rental crisis across Australia, and a massive shortage of affordable housing. Housing support is stretched to the point where only the chronically unemployable will receive assistance to secure an affordable home. The National Rental Affordability Scheme, which seemed to promise some relief, has been discontinued by the Australian Government. In an additional blow, the NSW Government has delivered a funding shake-up to homelessness services across Sydney.

Applying the proposed income support measures for under 30s in the current climate would be setting young people up to fail. Many Australians are already struggling in a hostile housing market, and it can be difficult to achieve permanent employment in the jobs market as it is. Proposed changes to income support simply direct the focus away from housing and employment policy failings, and seem ambivalent to the impact these measures could have on future demands for social welfare.

For more on proposed changes to income support in Australia, check out the Welfare Rights blog at

Friday, August 8, 2014

Entrails and Crystal Balls: Tracking rents in Sydney

Much like pinning the tail on the donkey, setting rents is an inexact game for landlords. Too much and no one can afford to rent the place, too little and you're missing out.
And if you're a tenant, you'll want to have an idea of where rents are going, particularly if you're looking at a new tenancy or if you've got a notice of rent increase in your current one.

Now, there is an industry of statisticians, researchers and pundits more than happy to help track and sometimes predict what everyone else is doing.

We’ve looked at three ways to track rents that use quite different methods to come up with an answer. And the answers they come up with are quite different. Some of them may be more useful, and more reliable, than others. 

Unfortunately, the least reliable measure may be the one that gets the most attention.

Australian Property Monitors is a Fairfax-owned group that, amongst other things, tracks the asking rents for Sydney properties on the Domain property website and paper form as its measure.

As a Fairfax subsidiary, it is unsurprising that their quarterly results on asking rents are published with much fanfare. Fairfax journalists pore over the results looking for meaning in the numbers.

A quick search on Domain showed 14 873 properties available for rent in the Sydney region on their website on the 4th of August, so APM's sample size is considerable. The problem is that these are 'asking rents' – and what landlords ask for, they may not actually get.

Also, from time to time APM revises past figures with corrections. The corrections are not that common but first impressions do last. For the analysis present below, where there is a difference we have used the numbers published when first publishing that quarter’s reports, and not any corrections made later. APM’s publications with their current methodology extends only back to 2010 so we’ll be looking at an admittedly small duration. And finally, these figures are for Sydney only – not the rest of the State.
The Australian Bureau of Statistics calculates CPI by looking at costs of a range of standard living costs and comparing those costs over time. 22% of the CPI is made up by housing costs- both purchasing and renting. From the ABS:
“Rental payments for privately owned dwellings in the metropolitan areas of each capital city are obtained from real estate agents under a matched sample approach, i.e. prices are collected for the same sample of private rental dwellings every quarter.”
Public housing rents also factor into the rents index. The ABS gains this information from the various state housing authorities.

The CPI – Rents index for Sydney, then, comes from a sample of Sydney real estate agents as well as Housing NSW for the actual rents paid on some of their properties. This means it includes current rents on properties that may have been tenanted for some time. And the index goes back a fair way – to the 1980s (here we'll stick to the shorter period also covered by APM). What the CPI – Rents index misses are rents for properties outside Sydney, and rents for properties not managed by real estate agents. Rents are for all dwelling types, where APM divides into houses and units.

Our final measure is from the Rent and Sales Report, published by Housing NSW every quarter. Its figures on rents come from the information on bonds lodged with the Rental Bond Board for the previous quarter, so it tracks the actual rent paid on newly leased properties in Sydney and elsewhere in New South Wales. What the Rent and Sales Report misses are rents in established tenancies. The sample the Rent and Sales Report uses almost complete (about 44 000 bonds for Greater Sydney per quarter), because the vast majority of landlords require payment of bonds and it is a legal requirement that bonds are lodged with the RBB.

Rent and sales data is published for houses (~20%) and units (~50%), and about 30% are not identified as either. (In the 2011 census, NSW rented dwellings were about 60% separate houses (including 15% terraces), and 38% units.) The Rent and Sales Reports go back to the 1980s: for the present analysis, we refer to its Sydney figures, over the shorter APM period. Readers will notice that the following charts are missing data from June 2014 for the Rent and Sales Report – this is because they are published on a 2 month delay, so 
June will be released in August.

So, let's compare the results of these different methods of tracking rents. For the CPI measure, we have taken the median rent for Greater Sydney from the 2011 Census and applied the CPI rents index to it. This means that it is measuring the actual rents of established tenancies, leading to a much lower figure. Looking at results for houses first:

It is immediately noticeable that in the Houses list the asking rents stayed at $500 per week in December 2011 and except for two quarters haven't moved since. Both CPI and Rent and Sales figures show growth over the period. So, for quite some time, asking rents were way out of line with the rents tenants were actually paying. By way of illustration, here is the margin of error for both houses and units between the asking rents in the APM data and the actual rents from Rent and Sales. Houses certainly do over-reach by quite  a long way.

So when APM talks about "flat growth" for houses, that's only because it was APMs measure of asking rents on houses that didn't move at all. In fact, what landlords were asking for was declining in real terms – even as the rents tenants were actually paying was increasing!

It was probably naive to think that a surge of activity would lead to an oversupply of rentals, given that we have had such low vacancy rates, and even more so to think that rents would go down as a result. The last time that new rents overall went down in NSW was June 2004! 

In relation to units, the asking rents measure is nearer the mark, and if you squint you can see the asking rent leading into rises in the actual rents in following quarters, though not towards the end of the series.

To demonstrate the relationship between the actual rents and the asking rents, we'd like to look at a couple of statements made in the most recent article about APM's Rental Report in the Sydney Morning Herald.
Sydney rents have surged to an all-time high, new figures show... after a prolonged period of flat growth, house rents also [along with units] rose by 2 per cent to $510 a week,
The statement is true, though not very useful, and as we'll see not really borne out by the APM figures. It is a basic fact of the way we run our economy (and print our money) that prices should always trend up in nominal terms- it’s more important to look at how fast a particular price is rising in comparison to other prices, particularly compared to income. 
So we might look at the Rent and Sales Report (to March) and APM’s Rental Report in today's money-

For houses, not only is the most recent result from APM not the highest in real terms, but since their series began it has come up from its lowest point so far! However, the actual rents for houses have been on the rise for the last year, and almost certainly will be at their highest point thus far. Units also recorded their highest result under the Rent and Sales series in March and we'll see where June leaves us!

For both houses and units however, this probably shouldn't have come as a surprise. According to the Rent and Sales Report, rents for both houses and units increased by more than 2% in 3 of the last 4 quarters for an average of 1.59% in houses and 1.6% for units over the last year. CPI rents also recorded just under 1% over the last year.

So what's happening here? Maybe landlords and agents were just off their game. Or maybe they believed the following bit of analysis reported with the APM figures.
The persistent surge of investors, who make up more than half of all home loans, was expected to lead to an oversupply of rentals and push weekly rents down.
We agree there has been a surge in so-called 'investor' activity over the last year. This can be seen in the amount of finance that's been thrown around by 'investors' in NSW particularly in the last 2 years. 

The surge of 'investors' was never going to have this effect, because they've all been buying existing dwellings, including from the owner-occupied sector. And they've been doing so as negatively geared speculations on future price gains. This means they've been bring into the rental sector higher-value properties, for which higher rents are being paid – particularly by the higher-income households who might otherwise have been owner-occupiers, but who are still renting, because they keep getting outbid by rampant speculators. 

So it would be more accurate to say that the persistent surge of speculators, who make up half of all home loans, has distorted the shape of the rental market and pushed weekly rents up.

We mentioned that the Rent and Sales data will be released this August. In fact, they are due for release on Monday, the 11th of August. We'll be watching carefully to see how close the asking rents are to the actual rents – hopefully, Fairfax, APM and the ABS will be too! 

The June 2014 Rent and Sales Report has been released! The short story? The median rent went down for both houses and units. June has traditionally been a slow quarter for rents, being the only quarter to average negative growth in both houses and units over the periods examined above. After one brief quarter of advertising and receiving the same amount of rent, landlords have returned to their overreach as the asking rents went up. So there was truth in the expectation of rents going down, though we suspect for confused reasons.

Wednesday, August 6, 2014

The Glebe estate: 40 years of public housing

A Brown Couch reader alerts us to a significant anniversary: 40 years ago today the Glebe Lands (Appropriation) Act 1974 (Cth) received assent, and the Commonwealth Government was enabled to complete its purchase of the Glebe estate.

Previously the property of the Anglican Church, the 700 dwellings represented a large part of the low-income housing available in the inner city, and they were in a bad way.

The responsible Minister, Tom Uren, explained the Government's objectives:
The main objectives of the purchase of the estate are to avoid the sudden displacing of the existing population and to avoid any disruption to existing community networks, and to retain the opportunity for low income earners and families and aged people to live close to the city as part of the wider community.... The other main objectives are to improve environmental conditions and social conditions of residents of the estate and surrounding area and to preserve the townscape and sympathetically rehabilitate it.
The Glebe estate was subsequently transferred to the NSW Housing Commission. It remains an important part of the social housing system today.

So should the great and humane objectives set out by Uren.

TICA's excessive fees are not excessive, says TICA

TICA is a database operator, as defined in the Residential Tenancies Act. It is in the business of courting landlords and real estate agents for information about 'bad tenants', and selling it on to other landlords and real estate agents. As we discussed earlier in the year, TICA also sells its information to tenants. You can find out what TICA says about you by paying them $5.45 per minute over the phone, $19.80 by mail, $33.00 by fax, or $55.00 for an online subscription.

Real estate agents and landlords who use TICA's 'services' are required to provide the same information to tenants for free. Database operators are entitled to charge for it - provided their fees are not excessive.

We wrote to the compliance unit at Fair Trading NSW in July, to see what they think of TICA's fees. We pointed out that TICA's fees appear to be excessive, putting them in contravention of section 216 of the Residential Tenancies Act 2010. We suggested this warrants an investigation into TICA's compliance with the law. Here's what Fair Trading said in reply:
"The issues you've raised have been brought to the attention of TICA's CEO. In answer, documentation was provided setting out the basis on which fees are charged. The explanation was determined to be acceptable. We do not propose to take any further action."
Seriously. Fair Trading asked TICA whether their fees are excessive. TICA said no. Fair Trading said 'that concludes our investigation'.

We're not entirely comfortable with this, and we urge anyone who has concerns with TICA's excessive fees to drop Fair Trading NSW a quick note, just to let them know. This can be done quickly and easily, by cutting and pasting the following text into a letter:
I am concerned that the tenancy database operator, TICA Pty Ltd, is charging excessive fees to provide interested parties with copies of ‘personal listed information’. 
Under section 216 of the Residential Tenancies Act 2010, landlords and agents must provide copies of personal listed information, without the payment of a fee, when the listed person requests it. Section 216 also requires that database operators provide copies of personal listed information upon request, but it allows them to charge a fee. The qualifying proviso is that the “fee must not be excessive” (s216(3)(a)).
TICA Pty Ltd offers copies of personal information at the following excessive rates:
- By telephone, charged at $5.45 per minute;
- By mail, charged at $19.80;
- By facsimile, charged at $33.00; and
- By an online subscription, charged at $55.00 annually.
Please investigate TICA's fees and take whatever action is necessary to ensure they are brought into compliance with the law.
If you have any further information you'd like to add - such as details of how and when you've been caught by TICA's excessive fees - please do.

Send your complaint to the Director of Compliance, Fair Trading, at PO Box 972 Parramatta 2124.

Monday, August 4, 2014

Millers Point and the United Nations

Our colleague Kim Boettcher, solicitor for The Aged-care Rights Service (TARS), has addressed the United Nations' Open-Ended Working Group on Ageing (5th session), and drawn attention to the plight of tenants of social housing at Millers Point and The Rocks, and of other older persons. The text of her address follows.

Thank you Mr Chairman for giving me the floor.  I acknowledge the traditional owners of the land on which we meet and I pay my respects to their elders past and present.

My name is Kim Boettcher and I am a delegate of The Aged-care Rights Service Incorporated, an independent legal centre in Sydney, Australia which specialises in advising and representing older people. We thank the Member States for their attendance and concern about the rights of older people.

The Australian delegates who are here today stand in the legacy of an Australian lawyer and politician, Dr HV Evatt, elected the President of the first meeting of the United Nations General Assembly that met here in New York in 1948.  He was known as ‘the Champion of the Small Nations.’ 

I am here representing people from one of the small nations, my older clients who are not seen and not heard in society.  It is often said that a society is judged by how it treats its disadvantaged and its minorities.  That treatment is better for recognising that basic human rights apply to all people rich and poor alike.

There is a storm brewing on the edge of Sydney Harbour, Australia, which epitomizes the problem we face with no international legal instrument for older people in place. In the shadow of the Sydney harbour bridge, the inner city known as “the Rocks” and Millers Point is being redeveloped.  A casino is being built on the old wharves by one company, residential and office blocks by another company, and surrounding properties are being sold off by government.  Over 600 public housing tenants are being forcibly displaced from an area where there has been public housing for over 100 years. Sixty per cent are older people and sixty percent are women.  These families have often lived there for generations- they worked at the wharves during times when there were no worker’s rights and they went home covered in flour and coal dust because there were no showers; they lived through a Great Depression, wars and worked hard to make my nation what it is today.  They are part of the fabric of society and a living heritage at the heart of the city.  Over the past year, they have been door knocked and interviewed by the authorities with no legal representation, no attorney, no guardian or even a support person in the room, telephoned, texted and inundated with letters about moving out. One older person was told that her home was being renovated.  She put up with the renovations for 8 months only to find she is being moved out.  As the wharves are being knocked down for the casino to be built, hoards of rats are moving up the hill and to the area where these people live.  Nothing is being done about the rats.  If repairs and maintenance need to be done, they are told “if it’s not a big repair job, we will do minor repairs.” Meanwhile down the street, millions of dollars are being spent on the empty houses being prepared for sale at large profits.  It is clear that we need infrastructure, businesses and healthy national economies but not by breaching the human rights of older people.
The residents are being asked to sign consent forms over a cup of tea and an informal chat, which would result in the handing over of all of their most personal medical, legal and family information.  They are asked to complete online surveys (which include identifying themselves) for the chance to win an IPad, which has the same evidential effect as the consent forms in disclosing private  information.  It is left to attorneys and advocates to raise the alarm. 

Breaches of the right to privacy for older people by governments, corporations and individuals, is a precursor to elder abuse.  Privacy over health and medical records, legal and financial records, physical privacy and privacy over personal information should all be part of a Convention.  This would build on Article 12 of the Universal Declaration of Human Rights so that there is accountability for violations against older people.

It so easy to move people on once you know all about them and you can find an excuse to put them in an aged care home, under the care of the state guardian, in a mental health facility, or simply to move them to somewhere deemed more suited to them, but which isolates from their lifelong friends and community. 

Back in Sydney, stakeholders with vested interests are courting the media, and the Australian public is being courted with a fiction that these people are dole-bludgers, or unable to care for themselves, derelict and worthless.  Public opinion has fallen for the myth that these older people have had their million dollar harbour views and it’s time to move on.  The truth is that most of them don’t even have harbour views and they have basic, modest accommodation.  They are wonderful, interesting, independent people when you bother to speak to them. One of the elderly residents told me last week that to relocate them away from their community, is “one step short of putting you up against a wall and shooting you because it’s saying you are of no value to society.  You are worthless.” 
What is occurring is the dissolution of a community.  In fact, this is an opportunity for government and industry to follow the lead of entrepreneurs such as the Yunis microcredit projects to support the housing of older people, to engage in social business.  If only they would seize such a life-changing opportunity.

Let us not forget that the most displaced peoples are in conflict zones in many countries.  Older people often suffer the most if they are frail and vulnerable and have health problems. Along with women and children, they are the first victims of physical and sexual violence, torture and often death.  Older people in conflict zones don’t usually start the journey to my country by refugee boat, or by plane. If they miraculously make the journey, they would not be allowed in, because they are too old to be a young, skilled migrant.  I respectfully request that Member States think of these forgotten people who need the protection of the proposed Convention the most.

My organisation is a Member of the Global Alliance of the Rights of Older People Australia- GAROP Australia-  Our alliance of leading Australian organisations advocating for and representing older people was formed as a result of last year’s working group.  We are proud to declare that our regional alliance is flourishing with the support of prominent politicians championing our cause.

Finally, I am also a Member of the International Commission of Jurists Australian Section. Today, I bring a message from the ICJ Australia to this Session:

“ICJ Australia supports the work of GAROP Australia in strengthening the rights and voices of older people in our region. ICJ Australia supports the need for an international legal instrument to protect older people’s human rights in Australia and across the globe and to allow them to live free from discrimination.”

In conclusion, a convention is inevitable, but only if we all continue to work diligently to achieve it.

My organisation supports and commends the intervention by the IFA Delegate today in calling for a Chair’s summary on the main elements of a new legal instrument. I respectfully recommend that the Chair considers documents that have been drafted such as the Chicago Declaration of July 2014, and the 2014 Declaration of Rights for Older People in Wales. To my Welsh colleagues I say congratulations- iechyd da a diolch yn fawr!

Thank you.

Friday, August 1, 2014

Contracts, conjunctions and clarity

Entering into a tenancy agreement only to find out later that the landlord is selling the place with you in it can be very frustrating. We've written a whole series of posts on this. The Residential Tenancies Act 2010 introduced one particular method of dealing with landlord selling that has caused a bit of confusion since its introduction. That method is giving the tenant the ability to end the tenancy early because they hadn't been informed of the sale before entering into the agreement. We've written twice before on this issue, using our understanding at the time. Fortunately, as of 4th July this year, the Act was amended slightly to make it crystal clear what it had probably meant to say all along.

Unfortunately, it has been clear as mud to some, provoking today's pedantic rant.

Now see here, you lot!

The Act now reads:
(1)  A tenant may give a termination notice for a fixed term agreement on any of the following grounds:
(c)  that the landlord has notified the tenant of the landlord’s intention to sell the residential premises, unless the landlord disclosed the proposed sale of the premises before entering into the residential tenancy agreement as required by section 26,

Section 26 requires a landlord who has an intention sell the premises and has also prepared a contract for sale to disclose that fact to the tenant before entering into a tenancy agreement with them.

The confusion arises now on how to read (1)(c). Since the clarification an agent in NSW has told a tenant, that "this section now only applies if a Contract for Sale of Land was prepared prior to the lease being entered into."

Now, we're all for the evolution of the English language. We've accepted that google is a verb, that we all know some flexitarians, but we're not yet aware of anyone making an argument for redefining the word "unless".

Unless is a form of conjunction (a word that joins two phrases), which is "used to introduce a case in which a statement being made is not true or valid." What "unless" most definitely is not, is "only if", as asserted by that real estate agent.

In this case the statement that being made is:
A tenant may give a termination notice for a fixed term agreement on (any of) the following grounds: that the landlord has notified the tenant of the landlord’s intention to sell the residential premises,
The Act inserts the conjunction,
and the qualifier:
the landlord disclosed the proposed sale of the premises before entering into the residential tenancy agreement as required by section 26.

For clarity, here is what the explanatory note that accompanied the amendment through parliament says about it:
A tenant will have a right to terminate the agreement early, unless the proposed sale was disclosed in accordance with that section [section 26].

The way to read this part is that a tenant is entitled to terminate in almost all the circumstances where the landlord notifies them of an intention to sell the premises. There is one exception, and that is where the landlord had, before the agreement started, disclosed that they had prepared a contract for sale of the home.

We hope this settles the question!

This information is not to be construed as legal advice and should not be relied on in the making of any rash decisions about moving house. If in doubt, contact your local TAAS.