Disclosure of information to tenants
Currently the Residential Tenancies Act 2018
mandates that a landlord must not make false representations, must disclose any planned sale
and mortgagee repossession actions and give tenants an information statement before they enter
into an agreement.
The proposal before government is two-fold. First there is an expansion of the information to be provided so that prospective tenants
of strata schemes be given a copy of the by-laws for that scheme and also be
advised if a strata renewal committee has been established for the scheme before entering into a residential
tenancy agreement. We welcome this proposal.
The second is that a tenant can vacate without penalty if a landlord breaches section 26 - they can either serve a notice of termination and vacate, or seek orders ending the tenancy early from the Tribunal. However, a tenant will not be able to seek any compensation as a result of the landlord's failure to disclose information.
The second is that a tenant can vacate without penalty if a landlord breaches section 26 - they can either serve a notice of termination and vacate, or seek orders ending the tenancy early from the Tribunal. However, a tenant will not be able to seek any compensation as a result of the landlord's failure to disclose information.
Our recommendation
Our recommendation is that all of section 26 (proposed and existing) be made a term of every
agreement and that tenants should be able to seek compensation for the
landlord’s failure to disclose in the circumstances outlined in the existing
legislation, i.e for false representations, disclosure of sale or mortgagee
actions and information statements to be given to tenants before the tenant
enters into the agreement, as well as in the above proposed circumstance in
regard to strata.
This must be made into a term of every agreement in order for it to have any meaningful impact. Our experience is that currently the disclosure requirements are not well adhered to and where non-disclosure is discovered, tenants often have little option but to accept it. As it stands, whilst a tenant can vacate without penalty if disclosures do not occur, they are unable to seek compensation for the landlord’s failure to disclose. The potential losses to the tenant could be considerable and include – moving costs, reconnection fees and any other losses that would not be recovered under the current proposal.
This must be made into a term of every agreement in order for it to have any meaningful impact. Our experience is that currently the disclosure requirements are not well adhered to and where non-disclosure is discovered, tenants often have little option but to accept it. As it stands, whilst a tenant can vacate without penalty if disclosures do not occur, they are unable to seek compensation for the landlord’s failure to disclose. The potential losses to the tenant could be considerable and include – moving costs, reconnection fees and any other losses that would not be recovered under the current proposal.
Access generally by
landlord to residential premises without consent
Currently there is no reference in the Residential Tenancies Act 2010 to landlord taking
photographs or making visual recordings of tenants’ homes for any purpose. To
date the standard advice to tenants has been that if a tenant requests that a
landlord desist from taking photographs and they ignore such a request, then the landlord may place themselves in breach of
section 50(2) ('Tenant's right to quiet enjoyment') of the Act and face a penalty of up to $1,100 if prosecuted in
the Local Court. They may also face a claim for compensation awarded to the
tenant in the NCAT.
The proposal before the government is that the landlord can
access the residential premises without consent for the purpose of taking
photographs or a video recording for the purposes of advertising the
residential premises for sale or lease no more than once in the period of 28
days preceding the commencement of marketing the residential premises as long
as the tenant is given reasonable notice and a reasonable opportunity to move
their possessions out of the frame of the photo or visual recording.
The landlord or agent can publish the photos taken with the tenants written consent - the tenant cannot unreasonably withhold that consent. If in the landlord or agents opinion the tenant refuses consent unreasonably, they will either - apply to NCAT for orders requesting consent be given, evict the tenant for the breach of unreasonably withholding consent, or if they are unsure (or can't be bothered) of whether it was unreasonable, evict the tenant for no grounds. Even tenants with strong reasons to withhold consent for publication will be in a vulnerable spot.
If the landlord or agent goes ahead and publishes anyway, there is a $2200 fine that may be applied. However under current practices Fair Trading is very unlikely to apply such a fine. For the entirety of 2017-18 Fair Trading issued penalties to just 9 people for 10 offences under the Residential Tenancies Act. This lack of enforcement operates to undermine the effect of penalty provisions in the Act.
The landlord or agent can publish the photos taken with the tenants written consent - the tenant cannot unreasonably withhold that consent. If in the landlord or agents opinion the tenant refuses consent unreasonably, they will either - apply to NCAT for orders requesting consent be given, evict the tenant for the breach of unreasonably withholding consent, or if they are unsure (or can't be bothered) of whether it was unreasonable, evict the tenant for no grounds. Even tenants with strong reasons to withhold consent for publication will be in a vulnerable spot.
If the landlord or agent goes ahead and publishes anyway, there is a $2200 fine that may be applied. However under current practices Fair Trading is very unlikely to apply such a fine. For the entirety of 2017-18 Fair Trading issued penalties to just 9 people for 10 offences under the Residential Tenancies Act. This lack of enforcement operates to undermine the effect of penalty provisions in the Act.
Our recommendation
We do not support this proposal as
it discourages negotiation between the parties and may result in possessions
that cannot be reasonably moved out of frame being photographed. Whilst the
proposal does take survivors of domestic violence into consideration and allows
these tenants to withhold consent in circumstances where domestic violence
exists, the definition of domestic violence may be too tight. Even for survivors of domestic violence the proposed system will mean
that tenants will most likely need to apply to the tribunal for protection and may not
be able to prevent publication of identifiable photographs.
Guidelines relating to reasonable times for repairs
Currently there are no guidelines
relating to reasonable times for repairs. Whilst urgent repairs are defined
there is no timeframe for these or general repairs and maintenance to occur
other than that landlords are required to act with reasonable diligence.
‘Reasonable diligence’ is not defined.
The proposal is to add guidelines for reasonable time frames for repairs to occur. It is not known yet exactly what format but it is likely it will determine time frames based on the seriousness of the needed repair - unsafe electrical work will be a shorter time frame than aged paintwork.
The proposal is to add guidelines for reasonable time frames for repairs to occur. It is not known yet exactly what format but it is likely it will determine time frames based on the seriousness of the needed repair - unsafe electrical work will be a shorter time frame than aged paintwork.
Our recommendation
In the absence of any proposed
guidelines it is difficult to comment other than to say that this proposal has
the potential to be a very good change if the guidelines are done well and reflect the real time frames for a landlord acting with diligence. If they
are not done well the proposal has the potential to be harmful to tenants as it will actually delay required repairs.
Fair Trading inspections and rectification orders
Currently many of the complaints to NSW Fair Trading about renting are in relation to repairs. While Fair Trading can take the complaint and talk to the landlord or real estate agent, there is no mechanism
that allows for Fair Trading to either inspect the premises or tell the agent they must carry out the necessary work.
In a nutshell the proposal before
the government is that a landlord or tenant can make an application to Fair Trading to investigate a concern about the premises. For landlords this will be because they believe the tenant has caused damage to the residential premises. For
tenants, whether the landlord has breached their repairs and maintenance obligations under the
agreement. A landlord rectification or a tenant rectification order can then be
ordered with time frames for work to be done. This Fair Trading issued order will be used as the basis of an NCAT order for non-compliance.
Our recommendation
This has the potential to be a
very good change but operational and funding decisions will determine if the potential is realised. There is a risk of the scheme draining other parts of the renting system by taking funds that could be spent on improving other aspects.
Several years ago Fair Trading implemented a dispute resolution system which has had positive results in relation to repairs - it is amazing how many agents will ignore a tenant asking for repairs, but when the same information comes from the regulator, it is taken seriously. However there is still a number of major hurdles for tenants, including the ever-present threat of eviction.
Several years ago Fair Trading implemented a dispute resolution system which has had positive results in relation to repairs - it is amazing how many agents will ignore a tenant asking for repairs, but when the same information comes from the regulator, it is taken seriously. However there is still a number of major hurdles for tenants, including the ever-present threat of eviction.
Fair trading inspections and
rectification orders could particularly have good implications for social housing
tenants who are not as susceptible to retaliatory evictions but increasingly face other barriers to enforcing their rights - such as limited resources and energy.
Likewise, the new mechanism could have the potential to free up the time of invariably overworked tenant advocates in under-resourced and underfunded services who often end up providing the time and resources to run such cases.
The scheme would be much improved if rectification orders were kept in a register, and were binding on the landlord even if the current tenant leaves. Currently tenants move in to premises with no reliable information about the condition of the premises. The condition report and a visual inspection is rarely a good guide to the real condition and history of the premises. A searchable register of rectification orders made regarding a property would be an authoritative and simple way to begin resolving this information asymmetry.
Likewise, the new mechanism could have the potential to free up the time of invariably overworked tenant advocates in under-resourced and underfunded services who often end up providing the time and resources to run such cases.
The scheme would be much improved if rectification orders were kept in a register, and were binding on the landlord even if the current tenant leaves. Currently tenants move in to premises with no reliable information about the condition of the premises. The condition report and a visual inspection is rarely a good guide to the real condition and history of the premises. A searchable register of rectification orders made regarding a property would be an authoritative and simple way to begin resolving this information asymmetry.
Minor alterations
Currently the Act provides for tenants to make alterations with the consent
of the landlord. A landlord cannot unreasonably withold consent for alterations
of a minor nature. These types of alterations are not defined.
The proposal is for regulations to
prescribe the kinds of alterations that are of a minor nature in relation to
which it would be unreasonable for a landlord to withhold consent.
Our recommendation
Clarifications and the signal sent from government are potentially a good step but it does not substantially change
the current system. We await consultation on the changes, though there are some obvious issues which need to be included.
The system would be improved further by allowing tenants to make the minor alterations without needing to first seek landlord's permission, but rather give the landlord opportunity to state what is inappropriate. For instance, an improved disclosure statement or condition report which allows a landlord to state that a particular wall is not appropriate for nails or screws of more than a certain size. Another alternative is for tenants to give a notice of intention of alteration rather than a request, where a landlord must raise an objection for some good reason within a reasonable time frame.
The system would be improved further by allowing tenants to make the minor alterations without needing to first seek landlord's permission, but rather give the landlord opportunity to state what is inappropriate. For instance, an improved disclosure statement or condition report which allows a landlord to state that a particular wall is not appropriate for nails or screws of more than a certain size. Another alternative is for tenants to give a notice of intention of alteration rather than a request, where a landlord must raise an objection for some good reason within a reasonable time frame.
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