Friday, April 29, 2016

New Rules for Swimming Pools

From today, there are some potentially significant changes to the rules around renting a house with a swimming pool. If you are entering into a new tenancy agreement for a house from today, this information will apply to you.

Landlords who enter into a new residential tenancy agreement from 29th April will need to take extra steps to ensure that the swimming pool complies with the Swimming Pools Act 1992. It is a breach of the tenancy agreement if these obligations are not followed, as well as potentially attracting fines.

The physical requirements that most people are familiar with like ensuring a fenced off area around the pool, have not changed. The changes are all about ensuring that pools comply with those previous requirements, through a system of certification.

These new rules do not apply to properties with a pool shared between more than two lots - mostly because those properties already had a stricter inspection and compliance regime in place.

A swimming pool register has been created, and it is intended that over time all swimming pools will be registered. The way this is enforced is that properties cannot be bought or leased without getting the required paperwork from the register.

What does my landlord need to do?

Most landlords of homes with private pools (meaning only one or two dwellings share the pool), will need to obtain a Certificate of Compliance from the NSW Swimming Pool Register. This means that the landlord has had the pool inspected by either the Local Council, or an accredited inspector, and the pool passed the inspection.

At the time you sign the agreement, the landlord will need to provide a current Certificate of Compliance (one issued within the last three years). A new building (built within the last 3 years) doesn't need a Certificate of Compliance, instead you need to be given the Certificate of Occupancy issued by the Local Council, and a Certificate of Registration, issued by the Swimming Pool Register.

You can also check if a property has been registered and inspected- both a Registration Certificate and a Certificate of Compliance need to show up for the landlord to be complying with these new requirements. We tested this out- see our results here.

If the pool did not pass the inspection, the owner will be informed by the inspector what work is required to bring the pool up to scratch and can be ordered to do the work by the Local Council if necessary.

What if my landlord doesn't supply a certificate?

The landlord will be in breach of the tenancy agreement if a current certificate is not be supplied at the time the tenancy agreement is entered into.

You can:
For further reading, we recommend checking out other sources of information that have been published for different purposes, such as info from the official sources such as the  Swimming Pool Register, and Fair Trading NSW's swimming pool page.

Pool Rules- Going for a Lucky Dip.

Today, 29th April 2016, new rules for landlords leasing out properties with a pool started. Read our Tenants' guide to the changes here.

These laws have had a long lead in time. They were first intended to apply in April of 2014, but due to property owners across the state all but ignoring them, the requirements were delayed first to 2015 and again to 2016. The Department of Local Government should be congratulated for finally biting the bullet and bringing them into force.

We wondered if two years was long enough for property owners to organise an inspection of their pool. So we picked 15 houses with pools being advertised today from around the state, and in a range of rent prices- from $270 per week up to $2000 per week. All the properties were being managed by real estate agents, though that wasn't a criterion.

The answer was a resounding NO. 2 years warning is apparently not long enough. Just 3 of the 15 properties complied with the certification rules and would be able to produce the correct documents to the tenant.

There is hope though. Of the three that did pass, all three have registered in the last 6 weeks- one of them just two days ago. While it is obviously just a tiny sample, it suggests people are starting to get the message and compliance may well pick up now that the rules are actually in effect. In the meantime, if you have concerns that your new landlord has not complied- give your local Tenants' Advice and Advocacy Service a ring.

Thursday, April 28, 2016

21st Century Bonds

A great many Australians increasingly prefer to administer their lives online.  The NSW Government has willingly moved to shift services into the digital space - a snug fit with its overarching narrative of an 'innovative' Administration that is 'leaner and more efficient'. 

Housing is no exception. In December 2015, NSW Fair Trading introduced Rental Bonds Online, an alternative system for the payment of rental bonds. The system allows tenants to send their deposit to the rental bond board directly using Fair Trading's website, instead of through their landlord or real estate agent. Both tenants and landlords can also make a claim for repayment of the bond online. A modest but perfectly sensible innovation for the digitally-inclined. 

Moreover, given tenants' bonds must be given to the Rental Bond Board (and the interest pays for many services benefiting both landlords and tenants) it is appropriate that they may make payments directly. The system effectively eliminates the risk of misappropriation by an agent or landlord, or a refusal to release the bond in a timely manner after termination of the agreement. 
Minister for Innovation and Better Regulation Victor Dominello would seem to agree. The Minister recently told Fairfax Media : "Misuse of rental bond money is a very serious issue but it can be prevented...Fair Trading's Rental Bonds Online system is a far more secure and efficient way of depositing bond money into trust". He continued, "I strongly encourage tenants and landlords to register to use the new system. It is an example of using digital innovation to provide greater peace of mind and transparency for consumers."
Tenants can only make use of rental bonds online if their landlord or agent has registered to use the system. Many agents were already using this system's predecessor (which was not open to tenants) and are already registered. So though there is some indication the system could become widely adopted, there will always be traders who opt out for reasons of retaining control, Luddism, or simple apathy. 

If tenants want to use Rental Bonds Online and their landlord/agent hasn't registered, NSW Fair Trading encourages tenants to request that they opt in. We also encourage tenants to let Fair Trading know how the system is working for them (and get advice if problems arise). 

This is intended to be an optional system - so if you prefer cash or cheques, don't fret. A landlord or agent who requires you to use Rental Bonds Online when you do not want to may be fined up to $2200.

And don't forget that you can claim your bond as soon as you hand your keys back, and can still make a claim if you disagree about the amount of the bond to be returned to you. Fill in the form with the amount that you want paid (you do not need the landlord or agent's signature). Then return the form to Fair Trading, or complete the claim using Rental Bonds Online.

You can find out more about Rental Bonds Online here 
And check out all things Bond at our factsheet here

Tuesday, April 26, 2016

Negative Gearing in the News

On 25 April 2016 the Grattan Institute released a report entitled 'Hot property: negative gearing and capital gains tax'. It finds that, contrary to urban myth, rents won’t change much, nor will housing markets collapse.

And on page 27 of this reports it explains the role that negative gearing plays in undermining the security of tenure of tenants of residential premises across Australia:
The higher churn of properties encouraged by negative gearing also exacerbates a lack of secure long term tenancies in Australia. Most of Australia’s housing stock is owned by landlords with only one or two properties, because progressive land taxes significantly reduce the returns from larger landholdings. As many of these landlords are negatively geared, and want to turn over their properties in order to stay negatively geared, most Australian landlords are reluctant to agree to long-term tenancies. Their political interests have also led to Australian tenancy law providing much less security for tenants than in other countries.
Check out this report at:

How the media reports it ...

From the ABC, 'Negative gearing: Tax deduction's removal "would boost Commonwealth revenue by $1.6b annually"'. Read more at:

From The Sydney Morning Herald , 'Top earners benefit most from negative gearing, Grattan Institute finds' and , indeed,' surgeons, anaesthetists, finance managers and lawyers will be the overwhelming beneficiaries of the Turnbull government's decision not to touch negative gearing in the budget. Read more at:

And Peter Martin's comments at:

Let's leave the last word to Adrian Pisarski of National Shelter who states:
I'm surprised that younger people in Australia are not throwing bricks at auctions ... 
Read more at:

Thursday, April 21, 2016

Who wants an affordable rent?

Private market rents and low-incomes don't mix. We'd like to say this is a recent phenomenon but Anglicare's annual Rental Affordability Snapshot - which has consistently shown affordable rental properties for low-income workers and those receiving income support are practically non-existent across Sydney and other major Australian cities - is now in its sixth year. But the latest report, released today, shows rental affordability continues its decline across regional New South Wales as well.

We're sad to say the problem is entrenched. But is it intractable?

We're often told that the way to improve housing affordability is to increase the supply of housing. Take this comment from NSW Treasurer, Gladys Berejiklian, in the AFR earlier this month:
While we are open to further tax reform, including looking at stamp duty, we believe that the most effective way of tackling housing affordability is to increase supply.
If we apply this logic to the private rental market, what might be required is an increase in the supply of residential property investors who are willing to buy newly constructed dwellings. Now, as we know from our most recent exploration of tax data, an increase in investment does not necessarily mean an increase in the number of landlords, as the rate of second, third, fourth, fifth and sixth-time investors is growing faster than the rate of first-timers. But we also know, and it is well established, that around 90% of new lending and finance to landlords goes towards the purchase of established dwellings rather than new builds. Even so, there are blocks of new units going up all over Sydney and surrounds right now, but as Anglicare's Rental Affordability Snapshot reminds us, rents aren't coming down. Other research confirms the supply of housing does not put downward pressure on prices.
Source - Prof. Peter Phibbs, Shelter NSW seminar New Directions for Housing Fairness"December 2015.

This calls for an exploration into what drives landlords to buy - and the early verdict is that it ain't cheaper homes. It's more expensive ones. Property investors want house prices to rise because they're buying into a kind of superannuation scheme, hoping to replace wages and salaries with rents and access to "financial products" as their portfolios grow in value. Our whole housing system is geared towards the provision of wealth, rather than the provision of homes. Homes for people with a little less money in their pockets? No, that's not what housing is for.

Our federal tax settings are a case in point. Much has been discussed throughout this election year about negative gearing and capital gains tax discounts, and their impact on house prices and rents. What's not been talked about is the impact these tax settings have on our housing system more generally, and the assumptions upon which they feed. Negative gearing and capital gains tax concessions are just the type of policy settings that encourage an increase in the supply of residential property investment. But whether it is for the first, second or sixteenth time, or in new or established homes, the reasons for investment are the same. It ain't cheaper prices and affordable rents.

Of course, the banks deserve a mention for their part in this housing system, because it's where most of their lending business comes from. As landlords lodge their tax returns each year, we can see their most significant holding cost - and the reason why landlords make consistent losses on their property investments, despite charging unaffordable rents - is the payment of interest on loans. That means our tax system, which subsidises these landlords' losses, is also a boon for the banks.

Throughout all this discussion, tenants have rarely gotten a word in. We'd like to see this oversight addressed, because we make up a significant proportion of the population. Reports such as Anglicare's Rental Affordability Snapshot provide a good opportunity to talk about rents, and what it really takes to find your way in an unaffordable housing system. We can use these moments to remind landlords, journalists, economists and policy-makers that the private rental market is not just the nation's cash cow. It's where we live.

Tuesday, April 19, 2016

Please can we have a cat?

Renting with pets is risky, you've got to be responsible in ways that others do not. Unlike tenants, home owners can't be evicted for failing to train a dog not to bark at passing traffic, and they don't really have to be concerned about the damage their pets might cause - at least, not as far as it might affect other people. But because home owners are considered bona fide grown-ups, we let them decide for themselves whether or not to keep pets. Tenants, on the other hand, are apparently not to be trusted with such decisions without the blessing of a landlord.

To many tenants, it might seem a little outdated to speak in such terms, but we reckon we're on pretty solid ground. Even as recently as November last year, NSW Fair Trading reminded us that "historically, renting has been seen as a short term option - a stepping stone to home ownership", and that the rental market was "previously dominated by young people". This is reflected in our renting laws as much as in conventional expectations of our travels along the housing continuum, which haven't yet caught up with reality. Renting is still thought of as transitional, the domain of young people who haven't yet settled down, or hapless old fools whose very circumstances prove they're not up to the rigours of grown-up decision making. But that's okay because landlords - our "mum and dad investors", no less - are there to make the hard decisions for us.

Home ownership, of course, is the path to unrestricted agency. Evidently some magic happens the day you take on a mortgage and truly come of age, whereupon all your choices become sensible and responsible. Hence, it doesn't matter that a homeowner's dog barks all day and digs holes under the fence - they're entitled to keep one and we trust they'll do the right thing by their neighbours eventually.

No doubt there are landlords who are happy to rent to tenants with pets. After all, animal lovers come in all shapes and sizes. There are those who might not really mind either way, though won't really think about it unless you ask them. But most landlords operate with a blanket policy, insisting upon setting this most basic of house rules for their tenants: no pets allowed.

It may come as a surprise that there's nothing in New South Wales' renting laws that directly supports this. There is no legislated requirement for a tenant to seek their landlord's permission to bring a pet into the household. On the contrary, there are rules about a tenant's right to "peace, comfort and privacy in using the premises" that should extend to the question of keeping a pet. But there are also rules that allow landlords to impose certain terms in a residential tenancy agreement if they "permit the tenant to keep an animal on the premises", which prompts landlords not so much to include terms allowing pets to be kept on the premises but to insist upon the outright exclusion of any prospective tenant who intends to bring a pet to live with them.

There are well-worn arguments circulating around in an effort to explain this. Pets cause damage, pets cause a nuisance, etc etc. But none of these arguments presents a problem that our renting laws aren't already equipped to deal with. Tenants are responsible for their pets, just as they can be responsible for any silly little thing a guest might do having popped around for drinks on a Saturday night. If a tenant's pet causes damage, or a nuisance, then the tenant will be in breach of their residential tenancy agreement and required to make good. A number of remedies will be available to the landlord, including termination of the tenancy and compensation for any loss arising from the breach, unless the tenant is somehow able to resolve the matter by other means - such as removing the pet from the premises. This, it must be said, is a very strong incentive for tenants to take good care of their pets, and their properties, and to adopt a responsible attitude all around.

Faced with such responses, conversations about tenants and pets tend to degenerate fairly quickly. There's always that one person who rented a place out to a pet lover only to find the carpets were no longer brand new at the end of the tenancy, and another who lived downstairs from a guy who kept a rottweiler in a two-bedroom apartment while he went off to work every day... These inevitably lead to more philosophical objections, such as "I'm the one paying off the asset - I'm assuming all the risk. What about the neighbours? The welfare of the animal? Tenants are all care and no responsibility".

Of course, this brings us straight back to the issue at heart - tenants are not-yet grown-ups, and landlords are our mums and dads. Of course we should defer to them on questions of responsibility. Of course we should.

Only, we're not buying it. As more and more people are excluded from home ownership because of the extraordinary costs of entering into a mortgage, we are having to find other measures of becoming a grown-up. Finishing our studies, holding down a job, forming relationships, having families... all things we can do regardless of whether our home is rented or bought on borrowed funds. So, too, should be our choices about living with pets.

A simple change to the law is needed: landlords should be prevented from including "no pets" clauses in residential tenancy agreements. Whether or not to keep a pet should be a matter for the occupants of the home, not the landlord. Tenants should be free to make this choice responsibly.

As it happens, our renting laws are currently under review.  The Hon. Victor Dominello, Minister for Innovation and Better Regulation, who is responsible for NSW Fair Trading, is required to table a report on the Act to Parliament in June this year. In the lead-up to this review, the Tenants' Union produced a report outlining a number of other changes that need to be made to the law. To help us keep focus on this issue, without losing sight of many other things, we've taken the text from this report and turned it into a wordcloud shaped like a cat.

Oh yes, we did...

Tuesday, April 5, 2016

Fair Trading lights damp squib for tenants

As the main regulator of direct trade and commerce in New South Wales, Fair Trading receives over 45,000 complaints from consumers each year. It should come as no surprise that these include gripes from tenants about the behaviour of landlords and real estate agents.

In order to give consumer complaints a meaningful edge, Fair Trading is launching a new “Complaints Register”. This will provide a record of businesses that are subject to multiple consumer complaints received over the preceding two years. According to its guidelines, the Complaints Register aims ”to provide an incentive for businesses to deliver better customer service, and help consumers make informed decisions about where to shop".

We can see how a public 'name and shame file' could drive informed decision-making by consumers (tenants) in their hunt for a new product or service (a home). Avoiding such a register could also be a real incentive towards improved behaviour from service providers (landlords and real estate agents). So far, so good.

But, as with all things, the devil is in the detail. This register is unlikely to be of much use to tenants because a business may only be listed if it is subject to 10 or more complaints in a single calendar month. For the private rental market, this proviso could scarcely be more lenient. Real estate agencies largely operate as small businesses, and well over 90% of landlords own three or less rental properties. Given the modest scale of most operations, and the nature of the service provided, even the most scurrilous operator is unlikely to receive so many complaints in such a short space of time. Incredible though it seems, an agency subjected to over 200 complaints across the two year period could nonetheless avoid a listing.

The prospect of a listing represents the best reason for most tenants to lodge a complaint in the first place. The likelihood that a complaint will result in punitive action or provide a tenant with any direct redress is distinctly slim. Fair Trading will attempt to negotiate an outcome for a complainant - but this process requires the voluntary participation of the other party, and any agreement reached is unenforceable. Fair Trading also has powers to prosecute businesses suspected of engaging in certain types of unlawful conduct, including breaches of some provisions of the Residential Tenancies Act. But these are almost never utilised in tenancy matters: just two prosecutions under the Act took place in 2015, with five occurring the previous year.

But there is another serious shortcoming that many prospective complainants will encounter. Complaints may only be made against a 'business’, which captures real estate agencies, institutional landlords, and possibly some individuals with a large number of investment properties. But 'mum and dad' landlords with a smaller portfolio are considered passive investors, rather than active participants in the shelter business. So most tenants with a landlord that has not engaged an agent need not be disappointed by the new register: they remain entirely excluded.

Still, we'll be the last to tell tenants not to lodge a complaint with Fair Trading. Just make sure you get a good idea of where you stand before taking the plunge...

Fair Trading’s lack of attention to the private rental market might make you wonder just what the New South Wales Government makes of the landlord/tenant relationship in the first place. A light touch on tenancy issues reveals an ongoing misunderstanding of the structural imbalance in the bargain between those who need homes to live in, and those who want to use them for building wealth. Perhaps this is an unhappy sign of things to come, as we await the outcome of a statutory review of our renting laws?