Saturday, July 30, 2016

The Tenants Guide to Renting with Pets (NSW)

Yesterday we wrote about a petition going around highlighting the need for law reform regarding pets and renting. But what about the situation for pets, their families, and potential families now? We've produced this handy guide to renting with pets in NSW.

The guide looks at the legal situation for renters in New South Wales and answers common questions we receive from pet owners, including noise complaints, visitors leaving the gate open, pet bonds and more!

The information in the guide is applicable in the state of New South Wales only. If you would like to discuss a specific tenancy issue, the best people to speak to are the advocates at your local Tenants' Advice and Advocacy Service. Their contact details are on

Friday, July 29, 2016

Tenants: what will it take for you to adopt a greyhound?

Earlier this month Premier Mike Baird announced the closure of the NSW greyhound racing industry, following a Special Commission report into widespread cruelty. The industry will be wound up in an orderly fashion, with a plan to be implemented over the next 12 months. More information can be found in a published Q&A document from NSW Justice.

The dogs of NSW's racing industry will need new homes
According to the document, there are nearly 7,000 registered greyhounds in NSW. It proposes four ways of transitioning them out of the NSW racing industry: leaving them in their current homes, rehoming them through an adoption program, sending them to other states or countries where the racing industry will treat them better, or euthanise them humanely.

We reckon the first two options look the best. So, it stands to reason that one of the biggest tasks for the industry over the next year will be finding new homes for greyhounds that will no longer be able to race in NSW.

Gemma McKinnon, a long-time friend of the Brown Couch, former Tenants' Advocate and one-time lawyer at the Tenants Union of NSW, would love to adopt one. But she has a problem - her landlord won't allow it. And while renting laws in NSW don't specifically require tenants to get their landlord's permission to keep a pet, most residential tenancy agreements do. She's started a petition to draw attention to this, pointing out that "current tenancy laws in NSW mean that many potential greyhound owners are unable to assist in rehoming greyhounds because landlords can (and often do) refuse tenant requests to have pets in their home".

We've long advocated for a prohibition on "no-pets" clauses in tenancy agreements. We argued for this during the recent review of the Residential Tenancies Act, but unfortunately Fair Trading NSW has made no such recommendation in their report. In fact, they've declined to make any comment on the issue altogether. Given the Government's intention to shut down the greyhound racing industry and create a flood of animals facing euthanasia if they cannot be rehomed, this is a terrible shame.

One in three households in NSW are in a rented home. That's an awful lot of people who might put their hand up to help out, if only they could. Ms McKinnon's petition has attracted more than a thousand signatures since it was launched earlier this week. That's quite an indication of support.

Fair Trading and the NSW Government should reconsider their position on this.

Tuesday, July 26, 2016

21st Century Bonds - part 2

Back in April we noted the introduction of a new Online Rental Bonds scheme, which allows tenants to pay their rental bond directly to the Rental Bond Board instead of handing it over for lodgement by a landlord or real estate agent.

We can see the benefits of such a scheme. Rental bonds are tenants' money, and it makes sense for them to have some agency over its payment into the Rental Bond Board. For that matter, real estate agents should appreciate some relief from the administrative burden of collecting and lodging all those piles of other people's money. That time could be spent lining up contractors to undertake repairs and maintenance, after all!

But tenants can only use the Rental Bonds Online system if their landlord or agent has registered to use it, and informs the tenant that the option is available. In reviewing the Residential Tenancies Act earlier this year, NSW Fair Trading explored this a little. Here's what their report says:
Rental Bonds Online The new Rental Bonds Online system has been very well received by all stakeholders. It has allowed tenants to pay their bond directly to the Rental Bond Board, thereby reducing the incidence of landlords and agents failing to lodge bonds – an offence under the Act. However, tenants can only lodge a bond electronically if the real estate agent or the landlord has an account with Rental Bonds Online. 
In order to drive uptake by tenants and facilitate the transition of bond payments from a paper based system to an online system, the review concluded that the Act should require landlords or their agents to register with Rental Bonds Online and provide new tenants with an invitation to use Rental Bonds Online prior to lodgement of the bond. 
Importantly, tenants without online access would not be disadvantaged. If they preferred, they could still give the bond directly to the landlord.
It then went on to make the following recommendation:
Recommendation 8: That the Act require all landlords and agents to register with Rental Bonds Online and provide tenants with an invitation to use Rental Bonds Online prior to bond lodgement.
Given this is a relatively new service, we wonder how many tenants have been offered the use of Rental Bonds Online by a new landlord or real estate agent? How many have taken up the offer? How many have declined?

Most importantly, what do tenants who have made use of it think of the service? What are the concerns that might have lead some tenants to expressly decline to use it?

We'd love to hear from you if you've had any encounters with the Online Rental Bonds system. Drop us a line on Facebook, Twitter, or here on the Brown Couch.


Tuesday, July 19, 2016

And the new Minister for Housing is...

It's taken awhile for the dust to settle, but after the coalition's re-election to government our Prime Minister has now announced his new federal Cabinet. And the new Minister for Housing is....

Well, this is awkward. It turns out there isn't one. Again.

Instead we'll have to settle for a Minister for Social Services who'll continue to carry responsibility for housing related welfare policies, delivered through our social housing systems and homelessness services. We expect this will include, at some point, the introduction of a compulsory rent deduction scheme for social housing tenancies, which will replace the current voluntary scheme.

So, congratulations to the Member for Pearce, the Hon. Christian Porter, who will continue as Minister for Social Services.
The Hon. Christian Porter MP, Minister for Social Services
Congratulations also to ACT Senator Zed Seselja, who will take on duties as the Assistant Minister for Social Services.
Senator Zeb Seselja, Assistant Minister for Social Services
But, alas, there's still no Minister for Housing. Given that social housing tenancies make up about 5% or less of Australia's total housing "consumption", and that the high cost of housing in the private market is the biggest contributing factor to Australia's chronic conditions of housing stress and homelessness, we're always on the lookout for a Ministerial portfolio that will steer the nation towards an overall housing strategy to improve affordability. Our custom is to consider the Prime Minister and Treasurer as our de facto Ministers for Housing, so congratulations to the Members for Wentworth and Cook, the Hon. Malcolm Turnbull and the Hon. Scott Morrison, respectively.

You might recall the coalition's flagship policy this election was all about investment in small business owners. You might also recall the Brown Couch is full of admiration for those who have weighed up  the value of their borrowing power, realised that unaffordable home-ownership is not the be-all-and-end-all of existence, and decided to fund the development of a big idea into a business that actually produces something new and valuable instead. Of course, one of the best things that could happen for small business owners across Australia is for their housing to become affordable, and their tenancies to become stable and secure.

With this in mind, we'd like to offer our congratulations to the new Minister for Small Business, Member for Riverina the Hon Michael McCormack, too.
The Hon Michael McCormack MP, Minister for Small Business
Congratulations, Ministers. We look forward to working with you.

Thursday, July 14, 2016

The rent myth: measurement and supply

Domain are running an interesting article today, suggesting it's only a matter of time before apartment rents start to dwindle and we can all live happily ever after.

It starts:
Record high-rise building in Sydney has yet to provide any relief for renters, with apartment rents jumping sharply in the June quarter, data shows. 
The median weekly advertised rent for an apartment in the harbour city is now $520 a week, just $5 cheaper than houses, according to Domain Group’s Rental Market Report released on Thursday. 
But experts are predicting the trend will turn around as a record surge in apartment developments are built, mainly owned by investors looking for tenants.
This raises a couple of points worth exploring.

The first is the way organisations like the Domain Group measure rents - they check the property pages to see how much landlords are asking. This gives a skewed view of rents, as landlords don't always get what they want, and rents are not always quite as high as these reports suggest. Not only can this paint a misleading picture of life on the treadmill, but it can lead to inconsistencies in the reports themselves. For instance, the Domain Group's report from June 2015 had house rents at $530/wk, but by September this had been revised down to $525/wk. The latest report has kept house rents at $525/wk for that period but says they are now at $530/wk, showing an increase of 1% over the year. We're not sure why they do this exactly, but it happens from time to time. No doubt they have their reasons.

A much better way to measure rents is to look at how much tenants are actually paying, and it's possible to do this in New South Wales by checking the bonds that are being lodged with the Rental Bond Board. Our Rent Tracker series does just that - it's worth a look if you're ever wondering how actual rents have been moving in your area.

The second point is that building new blocks of apartments does not automatically reduce the rent - especially not before they're finished. To be fair, the Domain article does acknowledge that the bulk of new building has not yet been finished, with First Home Buyers Australia's Taj Singh saying:
Despite the record levels of apartment building … a lot of the new supply will be coming onto the market later in 2016, with most of the supply to come on the market 2017.
Singh is right - it really is too early to say how "record levels of apartment building" will impact on rents across the board. But we can look at parts of Sydney where the private rental market has grown, and see what the effect has been there. Looking at the number of bonds lodged between 2010 and 2015, as well as how much rents have increased over that time, tells us that a growing rental market does not always bring the rent down:

  • Camden saw a 57% increase in the number of bonds held, and rents went up by 21%
  • Botany Bay saw a 52% increase in the number of bonds held, and rents went up by 45%
  • Auburn saw a 41% increase in the number of bonds held, and rents went up by 20%
  • Maitland saw a 36% increase in the number of bonds held, and rents went up by 9%
  • Blacktown saw a 34% increase in the number of bonds held, and rents went up by 19%

By comparison, the following areas saw much lower growth in the rental market:

  • Blue Mountains saw a 1% decrease in the number of bonds held, and rents went up by 25%
  • Leichhardt saw a 1% increase in the number of bonds held, and rents went up by 20%
  • Waverley saw a 2% increase in the number of bonds held, and rents went up by 21%
  • Mosman saw a 3% increase in the number of bonds held, and rents went up by 23%
  • Manly saw a 3% increase in the number of bonds held, and rents went up by 30%
An article from the AFR earlier this year looked into this in some depth from the perspective of a Chatswood bound house-hunter - it begins: "A long queue is usually a sign something of value is at the end of it. That wasn't the case in Sydney's Chatswood on Saturday". It's worth revisiting.

There are two problems at play here. The first is that it would take even more "record levels of apartment building" to make up the required shortfall, and the second is that new supply is usually dropped into the mid- to high-end of the market, coming at the expense of more affordable homes that have been demolished to make way for something new.

We'll have a closer look at these two problems a little way down the track.

Wednesday, July 13, 2016

Inaccessible justice

As of July 1st, some applications to the New South Wales Civil and Administrative Tribunal became more than twice as expensive. However, if you aren't elderly, disabled or unemployed you might not know this because this only applies to people in receipt of a pension.

The fee change was published and made law on the 1st of July, the same day it was to take effect. To our knowledge, this change came without consultation with the members (including the Tenants' Union) of various consultative committees set up to support the Tribunal. This is a very disappointing omission, as we might have been able to discuss the potential impact on access to justice, and the fairness of the decision in light of the funding arrangements of the Tribunal.

Prior to July, pensioners could seek a reduction in fees, down to $5 for the basic application. $5 had been the level for concession card holders for many years, and reflected a commitment to ensuring that vulnerable people could still access the justice system when they were mistreated.

Now the calculation is that concession fees will be 25% of whatever application the person is making. It will now cost a pensioner $12 to make a regular application. This may not sound like much if you are a wage earner, but it will begin to bite concession card holders hard enough that they may not apply to the Tribunal at all.

It also means the concession fee will continue to increase when other fees do. Consider how quickly pensions are rising compared to wages below, and consider the fairness of this proposition.

Changes in income types over the last 20 years
Tenants are the people most likely to apply as concession holders, and we already fund nearly a third of the entire expenditure of the Tribunal. More than $14 million a year is provided to the Tribunal from the interest earned on tenants bonds.

Most of the funding NCAT receives from tenants' money is actually already spent subsidising landlord applications, so vulnerable tenants being asked to pay more than twice as much for their application really does seem a bit much.

And since tenant applications at NCAT are already dwarfed by landlord applications, there is no good reason to tip that balance further towards landlords by discouraging tenant applications.

Finally, something to consider about how we encourage access to justice for some of our most vulnerable members of society. In both Victoria and the ACT, their Tribunals also recently updated their fee structures. The cost to concession card holders to make a tenancy application? $0.

Monday, July 4, 2016

Australia can't decide - or can we?

In years to come, we might think back on the 2016 federal election with the fondest of memories. How we all rolled up to our local meeting points, grabbed a sausage or haloumi roll and a pastry, posted a quick selfie and took a cheeky punt on whether Malcolm or Bill would win the day. Waved a few pleasant hellos to neighbours and friends as we made our way back home again. Then quietly went on with our business, on a glorious winters' day.

Has the 2016 federal election offered up a treat?
Then came the surreal finish - no clear result, and nothing for the politicians or journalists to talk about for the rest of the weekend, other than themselves. Of course, they diligently set about doing that, with much early commentary focusing on the major parties' low primary count amid the seemingly relentless rise of minors, micros and independents. What does this mean for the future of Australia's democracy? Who could have seen it coming? Who's to blame? What will happen next?

It makes sense for the media to spend all its time looking at the parties and the politicians, because that's where the personalities are. That's the drama. That's what makes federal election coverage such wonderful entertainment. But we grow a little tired of it here on the Brown Couch, so we've decided to look at some of the policy implications of the election instead. And we think there are two take-home messages that, if read correctly, could mark the 2016 federal election as an extremely important moment in whatever's currently left of Australia's housing policy landscape.

The first is that Australians were asked to run screaming from changes to negative gearing and the capital gains tax discount, and we did not. The time, effort and expense put in by several real estate agents and other interested groups, who sought to paint a picture of certain disaster if tax breaks for landlords are wound back, has gone unrewarded. This is a good sign. Politicians and policy-makers of all persuasions should take note - Australians have swung towards housing affordability instead.

The second key message is that Australians were expected to turn their backs on higher budget deficits to pay for health and education over the next few years, and we did not. Perhaps there is recognition across Australia, after all, that economic growth can come from putting money into services that matter, rather than another tax cut. Of course tax cuts would result in growth for some, but there's no guarantee it would flow on to much of what the country desperately needs.

This brings us back to affordable housing. Australia needs that as much as everything else right now. And it's been shown, even within the last decade, that government investment in housing creates jobs and growth. When the Rudd Government responded to the Global Financial Crisis with the Nation Building Economic Stimulus plan in 2009, it included the Social Housing Initiative. Under the program, the nation poured more than $5billion into the construction and repair of its social housing portfolios. The program was evaluated by KPMG in 2013, and was found to have a strong economic impact as well as a social one. It resulted in the creation of 9,000 full-time and 14,000 part-time jobs in construction and trades. KPMG estimated that for every one dollar spent in the program, an extra thirty cents in turnover was generated in the economy, amounting to around $1.5billion per year over the course of the program.

While addressing housing advocates about the Social Housing Initiative at its outset, then Minister for Housing Tanya Plibersek hailed it as a "once in a lifetime opportunity" to grow the portfolio. While that may be true of a $5billion+ injection of funds, it needn't be true of the policy in principle.

This election, Australians have demonstrated a tolerance for government spending on key social services and projects. We've also shown the importance of housing affordability as a national goal. Whoever finally wins the day should take note of this, and implement a national housing strategy that includes both tax reform to fix the private rental market, and a plan to invest in new affordable rental housing across Australia.

If the politicians and journalists stop talking about themselves for long enough to notice this, the 2016 federal election might just become the stuff of legend.

Friday, July 1, 2016

NSW renting laws - change is recommended

Wedged between a state budget and a federal election, the NSW Minister for Innovation and Better Regulation's report on the Residential Tenancies Act 2010 could not have come at a worse time for those of us who love a good old chat about tenancy law reform.

We've all been busy discussing other things - like what will become of the social housing system as more and more government assistance is designed to keep people in the private rental market, or indeed how the market might respond if we change the way negative gearing and capital gains taxes work... Anyway, last Thursday the report was tabled in Parliament, and it's time we gave it another look.

We might have to wait until next week before any of the usual media services pick it up - or indeed before Fair Trading puts the report up on their website. You can find it in the Hansard records until then. In the meantime here's what's going on:

The good
There are a couple of very good recommendations in the report. For instance, it recommends a suite of changes that would improve renting laws for victims of domestic violence, and bring NSW into line with a number of other Australian jurisdictions. These include:
  • allowing victims of domestic violence to end their tenancy immediately by giving notice to the landlord and any co-tenant, along with evidence of domestic violence (such as a provisional, interim or final AVO)
  • allowing a tenant to change locks and security devices where necessary to protect themselves from domestic violence
  • ensuring liability for damage is not attributed to a victim of domestic violence, resting instead with the perpetrator, where the damage is the result of domestic violence
  • ensuring that victims of domestic violence cannot be unjustly listed on a residential tenancy database
Other recommended improvements to the law include preventing tenancy database operators from charging tenants to find out if they have been listed, shifting the "reasonable diligence" defence in repairs and maintenance matters from the question of breach to whether a remedy will be available, ensuring that tenants have some recourse if material facts are not properly disclosed by a landlord prior to entering into a tenancy agreement, coming up with a single method for calculating a lease-break fee, and making it clear what seperately metered premises means when landlords pass water and utility charges on to tenants.

The bad
There are some recommendations in the report that we're less fussed with, such as proposed changes to the way a tenancy that is established as part of an employment contract can be brought to an end, allowing landlords to photograph a tenant's home for use in a sales campaign, and persevering with the "frequently failed to pay" complication to the otherwise useful "pay and stay" rent arrears provisions.

Some much needed changes to the law are missing from the report's recommendations, too. In particular, there's no proposal to fix the way rent increases work, no prohibition on landlords inserting "no pets" clauses into tenancy agreements, no requirement for landlords to occasionally inspect their investment properties and report on prospective maintenance needs, and no mention of increased funding for Tenants' Advice and Advocacy Services.

Most importantly, the report has declined to recommend putting an end to landlords' use of "no grounds" notices of termination, focusing instead on oft-promised, never-delivered "longer fixed-term tenancies". We'll come back to that in a moment.

The curious
The report makes several recommendations that warrant further investigation, and we're doing our best to find out more. These include working out what to do about share-housing tenancy agreements and marginal renters not covered by the Boarding Houses Act, and making minor amendments to the Act that "have merit".

Also in this category are recommendations to use the interest on tenants' bond money to fund "consumer protection more generally" - will this be at the expense of tenants getting More Bang for Your Bond? ; and make Rental Bond Board data available through an "open data project" - but this shouldn't impede the continuation of our new Rent Tracker series.

Unfinished business
Seems it wouldn't be a complete review of the Residential Tenancies Act without putting security of tenure into the "too hard basket". This is very easily done by making recommendations like "the Act's provisions in relation to no grounds terminations should remain unchanged. The Government should consider other ways of improving security of tenure in the rental market, including through facilitating the use of longer fixed term leases".

The thing about this is that landlords don't want to offer long fixed term leases, and tenants don't want to accept them. Not in the current climate, with a rental market driven by gains-motivated investors who'd sooner have vacant possession for a quick sale than a long-term, steady tenancy. The report even notes this, characterising it as the "tax settings in Australia and the tendency to purchase a property to make a capital gain rather than to collect rental income contributing to landlords' reluctance to enter long term leases".

This is interesting in the context of the Federal parties' stated views on those very tax settings. If the NSW Government wants to encourage more long fixed-term tenancies in the private rental market - and this is a long-stated aim that we can trace back to the 2005 review of the Residential Tenancies Act 1987 - they need look no further than the way negative gearing and capital gains tax concessions encourage the wrong kind of investment. They should insist whoever next takes Federal office take the appropriate action and reform these tax concessions. After all, as the saying goes - if you want less of something, you tax it.

The process from here
We expect further consultation to occur on some of these recommendations before any legislation to amend the Residential Tenancies Act is put to Parliament. The report gives no indication of expected timeframes, but even if Government moves quickly it could be several months before we see further details of the proposed changes. Of course, this means Government has plenty of time to consider the report's recommendations, or indeed revisit those important changes that did not make the list.

We'll keep you posted.