Tuesday, October 10, 2017

Victoria's rental revolution - how does New South Wales compare?

Yesterday we celebrated Victoria's proposed tenancy law reforms, and reflected on some tired old lines that turn up every time we give serious contemplation to improved rights for renters. Today let's take a closer look at just what the Victorian Government's "Rent Fair" package includes, and how it compares to our own laws in New South Wales.

Victorian landlords: ready to cross the border at the first sign of tenants' rights
Victoria's proposed reforms are many and varied. They've been categorised into six different groups: rental security, tenants' rights, faster payments and rental bonds, fair priced rent, pets are welcome, and modifications.

Let's dive in.

Rental security
This includes the big one: landlords must give a reason to end a tenancy. This should be rolled out in every Australian state and territory, except Tasmania where it already applies. Along with others from the community sector we've been actively campaigning on this issue here in NSW (find out more at Make Renting Fair NSW). Allowing landlords to end a tenancy without a stated reason actively undermines tenants' confidence in renting laws because they worry they'll be evicted unfairly if they make a fuss or stand up for their rights. By now this should be well established, but if you still need some convincing we recommend a quick look over the recent Unsettled report published by Choice, National Shelter and the National Association of Tenants Organisations. Three cheers for Victoria for announcing this change!

We should note that Victoria already has a long list of reasonable grounds available for landlords to use, and their "no grounds" notice comes with 120 days notice. In New South Wales we are missing some key grounds, such as where the landlord needs to recover the property for their own personal use; and our notice period is a full month shorter at 90 days. Any suggestions we can fix our own laws in New South Wales by expanding the list of grounds for termination and leaving the "no grounds" option intact just took a bit of a hit.

But here's where it starts to get flakey: the law will limit the use of the ‘end of fixed term’ notices to vacate. This will allow landlords to use what is effectively a "no grounds" notice of termination at the end of the first fixed-term period (usually six or twelve months), but not in any subsequent period if the fixed-term is renewed rather than proceeding on the basis of an open ended agreement. Make no mistake, this would be an improvement and we'd welcome a similar change in New South Wales. But in practice it will turn fixed-terms into a "probationary" period. Tenants who stick up for their rights during an initial fixed term would still have no protection against an unfair eviction, so might hold off reporting repairs and maintenance needs, or raising other concerns about their tenancy, until after the fixed term expires. It would be better to just ban the use of no-grounds notices altogether, perhaps with an exception for longer fixed-terms of say three years or more (in the spirit of compromise). This might be something the Victorian lawmakers will consider as they're working out how to encourage more long term leases, which is also included under this heading.

As for the rest of the reforms under this heading - prohibiting false, misleading or deceptive representations and requiring pre-contractual disclosure of the presence of asbestos or an intention to sell, Victoria is mostly just catching up with New South Wales, but taking a few steps further while they're at it. The need for New South Wales landlords to disclose material facts prior to entering into a tenancy agreement was introduced with our Residential Tenancies Act 2010, but it wasn't given any measures for enforcement. We're still hoping this will be fixed - along with adding the presence of asbestos in the property as a fact for disclosure - as per the recommendations of the recent review of our own renting laws.

Tenants' rights
There are two proposals under this heading. A commissioner for residential tenancies who will "champion the rights of Victorian renters in the private sector" strikes us as an interesting idea, but we'll wait and see how that plays out for awhile before we get too hung up on it. A landlord blacklist seems like an odd thing for a government to introduce, when they could just encourage greater compliance with the law by investigating complaints and issuing penalties, but we'll keep an eye on this one as well.

Faster payments and rental bonds
A move to allow a 14 day automatic bond repayment is more or less in keeping with what we've long since known and loved in New South Wales - if you can't get an agreement and both signatures on a bond claim form, then either party can make a unilateral claim that will be paid out after 14 days unless the non-claiming party raises a dispute and takes it to NCAT. Sensible, although we do think it would be better if only tenants were allowed to make a unilateral claim, allowing landlords to dispute the claim or apply to NCAT after a reasonable time if they felt they were entitled to it. Changes  to the way the early release of bond works in Victoria will be of little consequence to us in New South Wales - our law allows this at any time as long as all parties agree, or the requesting party is handing it all over to the other, whereas the Victorian proposal will extend the right to an early refund to be available in the last fourteen days of a tenancy, rather than the last seven days. The same goes for updated bond cap & up-front rent cap for most properties - these are already in place in New South Wales, where a bond may not exceed four weeks rent and no more than two weeks rent in advance can be required regardless of the type of property or amount of rent payable. The move for faster repairs reimbursement, where tenants can seek reimbursement for the cost of urgent repairs they have effected because they couldn't wait for the landlord, is a small step ahead - Victorians will be entitled to this within seven days of a request, while we could still be waiting up to fourteen days. That is, of course, assuming we've followed the process correctly - never effect an urgent repair without reading up on the law first, because failing to follow all the steps could see you permanently out of pocket.

Fair priced rent
Victoria has announced a very modest change here, that will leave us in their dust. Rent increases are already restricted in Victoria - they can't happen more than once every six months, and under the proposal this will change to once every twelve months. Meanwhile, in New South Wales, there is no limit or cap on the frequency of rent increases. In theory, your rent could go up daily and there ain't a damned thing you could do about it - provided you've been given the proper notice on each occasion - other than apply to the Tribunal and argue that a proposed increase is "excessive". Limiting rent increases to a maximum of once a year would be alright in New South Wales, but we'd also need to rework the way tenants can respond to them. It should be up to the landlord to show that a significant increase is reasonable, rather than the tenant to show that it is excessive.

This plan also proposes cracking down on rental bidding, which is something we can all get behind. The law in New South Wales is not really clear on whether it's lawful for landlords to solicit bids, but it seems okay to accept a higher rent if a tenant jumps in first. Just because you can pay more doesn't mean you should, and landlords shouldn't dangle properties in front of desperate tenants with a wink, a nudge, and a sign saying "pssst, make me an offer" hidden in the top drawer. Victoria says it will prohibit landlords from "inviting" bids, which is bad news for a couple of rent bidding apps that are sniffing around at the moment, but perhaps it could go a little further. We should be clear - in an era when governments are relying on the private sector to make up the shortfall created by chronic under-investment in social and affordable housing, allowing those with greater means to push up prices for the rest of us should be well and truly outlawed.

Pets are welcome
Pets in rental property will be allowed by right of every Victorian tenant! Or will they? The proposal says tenants will need the landlord's written permission first. It also says the landlord won't be able to unreasonably refuse, but that leaves a lot of grey area around just how rigid this new "right" will be. Further, this seems to be more of a right for people who rent and want a pet than people who have a pet and want a home to rent. Landlords will still be able to discriminate at the point of application by simply declining to rent to people with pets.

A better way to give tenants the right to keep pets would be to take a "don't ask, don't tell" approach. We should confirm once and for all that landlords have no business making decisions about who besides themselves shall get to keep a pet, and prohibit including a "no-pets" clause in tenancy agreements.

Modifications
Ensuring that tenants can make minor modifications to their home is the final piece of news coming out of the Victorian proposals. It makes good sense, and again it brings Victorian laws in line with ours in New South Wales. With this kind of reform the devil is in the detail, as questions of who gets the value of an improvement if the tenancy ends prematurely will need to be considered thoughtfully. We haven't quite gotten this right in New South Wales yet, either.

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