Fighting the System: Going to Tribunal

'Really the troops...we’re going to court!' Or tribunal, as the case may be. This is what a small number of tenants do. The ones that choose to fight for their rights, rather than put up with privacy violations, dangerous and unsafe premises, or failed promises to undertake repairs.

So Matt did the right thing. He submitted an application to the Director of Consumer Affairs Victoria for an inspector to investigate the need for non-urgent repairs. This was in June 2012. The stove amongst other things had still not been fixed. He said, ‘We hope the document will enable you to come and make inspection, and help my family’. This is about 7-8 months after the landlord was originally notified of the property fault. Still not resolved.

I went poking around the Residential Tenancies Act 1997 (Vic) looking for time frames. And there are no time frames in Victoria. The legislation makes a distinction between urgent and non-urgent repairs. That is it. A tenant has to submit an application to the tribunal which can then issue an order stating that repairs are to be carried out by a certain date. So landlords and agents can drag things out and dither around.

Matt then lodged an application with the Victorian Civil and Administrative Tribunal (VCAT). In June 2012, the tribunal found in Matt’s favour and ordered that the landlord carry out all necessary repairs. But in late July, Matt had to write to the tribunal again to request that the order be renewed in relation to the oven. Seriously, the things are not that hard to fix.

In August 2012, the matter came before the tribunal again. Matt says, 'We were unable to check the stove and gutters during inspection and the agent didn't note these issues as well. This is their mistake and either the landlord or the agent should be responsible for it'.The tribunal ordered that the landlord pay compensation amounting to $800 and that Matt's family were entitled to vacate without penalty. I can understand but do not condone why tenants with limited legal understanding and communication skills get fed up and engage in inappropriate behaviour.

To start off with, I would question the adequacy of the amount of compensation awarded. Matt claimed about $2000 for loss of amenity associated with each problem but the tribunal only awarded $800. The tribunal can only award compensation for loss or damage. See sections 209 and 210 of the Residential Tenancies Act 1997 (Vic). Renting out a property is a business and landlords employ a cost-effective strategy. I would think that some unscrupulous landlords would weigh up the costs involved in quickly carrying out urgent and non-urgent repairs as opposed to not doing so and waiting until the tenant gives up and moves out. This is a simple cost/benefit analysis. No wonder landlords treat tribunal orders like they are toilet paper and don’t take responsibility for their properties. 

Paltry awards given out by the tribunal such as the one in this case do not reflect the costs involved in making applications to the tribunal, and costs involved in relocating to another property. Such awards do not reflect time spent liaising with property manager or owner, time taken off work to attend tribunal hearings, time taken off work to be home when a trades person attends the premises, time involved in preparing and gathering materials for tribunal, time taken to research the law and obtain advice from tenancy services.

So we can see that the existing system has inbuilt disincentives deterring tenants from enforcing their rights. It’s a win for the government as pressure on the system is alleviated.

A person’s time has value. I don’t see why time spent by an ordinary person enforcing rights through the tribunal system can’t be taken into account. A court can award costs so that the losing party pays for the legal costs of the other. I’m drawing an analogy here.

Also think about the tribunal's discretion handling repairs as opposed to rent arrears. If a tenant does not pay rent, the tribunal takes this very seriously. This might have something to do with the ease of calculating loss for failure to pay rent as opposed to losses associated with lack of amenity.

Another issue is that the tribunal cannot hear claims for death, personal injury, or pain and suffering. See section 447. Matt had actually slipped and twisted his ankle. The front decking had become slippery because of the leaking gutters after continued rain.  So the tribunal could not take this into account when calculating damages. Landlords owe a duty of care to their tenants to provide safe premises. But tenants have to pursue compensation for personal injury through the court system. Unless the accident is severe, it’s really not worth doing (so the system wins again).

Tenants are encouraged to appear in tribunal without a lawyer. This means tenants are disadvantaged. Landlords are represented by their property managers. As property managers appear in tribunal on a regular basis, they understand the system and its processes better than tenants. This comes down to experience. In this situation, Matt’s friend helped him with tribunal paperwork and appearances. But what if you don’t have a clever friend? Can ordinary people effectively represent themselves in a semi-legal setting? After all, lawyers study and train for many years. Yet we expect ordinary people to exercise advanced skills in negotiation, analysis and advocacy. The system is simply stacked against tenants.

Just because people give up doesn’t mean just and fair outcomes are achieved. The stress involved in tenancy disputes can be very taxing. It’s a bit different to other consumer disputes because property rental is ongoing. I think many people faced with similar situations just give up. Matt’s tenacity is admirable.

I think the iconic Aussie movie, the Castle, has some relevance here. Federal Court Judge: 'And what law are you basing this argument on?' Darryl Kerrigan: The law of bloody common sense!'

 

Fighting the System: The Landlord’s Minions?

Despite Matt’s best efforts, problems with Wantirna 'Professionals' continued two and a half months after the original complaint was submitted to Ms Hunter. As I have discussed previously, Matt and his family had experienced major problems with the property they were renting. There were numerous issues including leaking gutters, broken stove, dripping taps, and broken fly screens.

Despite numerous phone calls and emails, repairs had still not been carried out. At this point, I think we can see that Ms Hunter is employing a deliberate strategy. Matt says, ‘Some repair issues have been solved after we repeatedly requesting the agent, but some are still remaining or suspending. The agent just simply sent their tradesman to check and then no follow-up, no result, and no feedback like the fly-screens (finally fixed). They also sent someone to do some tiny repair which doesn't really fix the problem like the gutters’.

Minor repairs are carried out so it looks like action is being taken to keep the property in working order. Or band-aid solutions are applied to major faults which don’t fix the fundamental problem. Or tradespeople are sent to obtain quotes for repairs with no real intention of following through. Or cheap and useless alternatives are offered so it looks like efforts are being made to negotiate a compromise.

I think I have a fairly good understanding of human nature. If you put enough roadblocks on someone’s path, most will simply give up. But Matt didn’t give up. He sought advice from the Tenants Union of Victoria and served the real estate agency with a Notice for Breach of Duty. Ms Hunter finally got her act together and sent a repairman to fix the flyscreens and gutters. But the burners were not fixed. And the gutters continued to leak.

And then the truth came out sometime mid-March. The property manager actually admits that the landlord does not want to carry out repairs because she is going to demolish the house and build an apartment block. Accordingly, the repair of the automatic ignition is an ‘unnecessary expense’. First of all, I can’t believe she actually puts this in writing. And secondly, it shows the level of respect this property manager has for tenancy law.

 

So I looked at section 68(1) of the Residential Tenancies Act 1997 (Vic). It clearly states, ‘A landlord must ensure that the premises are maintained in good repair’. I can’t believe I have to say this. A landlord should still comply with legal obligations despite commercial rationale. So in this situation, we can see that business considerations are at play. If premises are unfit for human habitation, then they should not be made available for lease in the first place. Tenancy is a business, and landlords should be held accountable.

In other situations, sometimes landlords say they can’t afford to carry out repairs. The rental market is dominated by ‘mum and pop’ investors but this doesn’t make tenancy any less of a business. Renting should not just be an easy way to make cash, it’s a responsibility. And quite frankly, if you can’t afford to comply with legislative requirements, then you should find somewhere else to invest. Attitudes need to change, and the law has a role to play.

The other day, I popped into my local council to apply for a parking permit. By the time I returned to my car, I had received a parking fine. I bitched and moaned. I said to the parking inspector, ‘Look, I can’t afford this'. And you know what. He didn’t care and I still have to pay for the damn fine. When it comes to tenancy law, if a landlord says they’re broke, they can get away with not maintaining properties. But if you get a parking fine, you know you have to come up with the money, or you will be penalised.

After Matt and his family vacated the property, he submitted a complaint about Ms Hunter to Victoria Consumer Affairs. He said the property was ‘not fit for human habitation’ and the agent had ‘engaged in misleading and deceptive conduct’. The problem is that Consumer Affairs Victoria encourages voluntary resolution of a dispute and does not possess the power to make binding resolutions under law. The process is redundant when tenants give up and move out. There is nothing to stop real estate agencies from repeatedly facilitating breaches of residential tenancies laws.

 

Property managers and real estate agencies should be subject to enforceable duties under the Residential Tenancies Act 1997 (Vic). A central regulatory body should have the power to impose fines to punish and deter unethical conduct. So in this situation, Ms Hunter would be deterred from simply renting out the property again to someone else in the same condition.
 

The prevailing public perception of tenants is that of a ‘dead-beat’ with no job or prospects for the future. Clearly, Matt does not fit this stereotype. He is a dedicated IT professional with a young family. As the law stands, property managers and real estate agencies are mere minions. This needs to change. Mr Burns: 'Fly my pretties, fly!'

 

 

A Tenant’s Right to Pets

A friend of mine had to move from one rental property to another. As her new landlord didn’t allow pets, she had to find a new home for her beloved cat Moxie. So she started looking for a new home for Moxie on Facebook. Moxie was lucky and found a new home and loving family. But sometimes pets are not so lucky. And the worst happens. It breaks my heart, it really does. For this reason, I volunteer as a foster carer for abandoned cats.

It is common practice for landlords and real estate agencies to include no-pets clauses in lease agreements. According to the RSPCA, the most stated reason for surrendering pets is the owner is moving house and cannot find pet-friendly accommodation. Some tenants approach rescue groups to have their pet re-homed while others are put down. Also know that most people adopt cute and cuddly kittens over senior pre-loved cats.

The concern is that pets might cause property damage. Landlords and agencies usually impose a blanket ban on pets. The reasoning is completely flawed. They could reject applications from parents with young children on the same basis. Some would say children are more destructive than pets. This tenant comments:

I find it insulting that every study shows that the average child causes more damage to a house than the average pet, yet pet owners are consistently turned down or forced to give up their pet. The number of animals in the RSPCA that are there purely because their owners couldn't find a rental property that would take them are horrific.

But we don’t outlaw children and in some jurisdictions families are protected from discrimination. It is also unfair tenants are judged on the behaviour of others. Research shows pet owners have made clear progress in socially responsible pet ownership.

I am concerned the prohibition on pets affects some groups in society more than others. Low income earners are effectively precluded from having pets while those on higher incomes can. Something this simple has created a capital divisions in society between the haves and have-nots. Kathryn comments, "I’m so thankful I have my own home as I think it is shocking the way rental agents state no pets a lot of the time…I for one would live in a tent in the country, rather than part with my beloved pets".

Some rescue groups recommend a pet resume and references. We have seen the development of pet-friendly real estate search engines with "pets permitted" options. As recently as 2009, a frustrated pet owner introduced Pet Friendly Rentals. Tenants can use a simple search to find pet friendly rental properties. But it is still very difficult for tenants to find appropriate accommodation. And this is so despite research showing pet-friendly properties increase in value because tenants are usually prepared to pay more to keep their beloved pets.

 

Research shows pets have numerous physical and psychological benefits. Research has shown that pet ownership reduces risk of cardiovascular disease. Dog owners tend to get outside more and get more exercise. Studies have also shown infants with access to furry pets are less likely to develop allergies. Pets also help people struggling with depression, anxiety, and other kinds of mental illness. Pet companionship is an important support for those coping with the grief of the loss of a loved one. Elderly people, especially those with dementia, benefit greatly from pet companionship. I am not going to list all the studies. They are too numerous to count.

But the right to keep a pet on residential premises is not guaranteed in any state or territory in Australia. This seems incongruous when we consider Australia has one of the highest rates of pet ownership in the world. We only have to watch the Aussie film Red Dog too see Aussies love their pets. Perhaps I am naïve but I thought the law was supposed to be a reflection of community attitudes. Not so. It's all about protecting property ownership.

A trend for pet bonds or agreements to be used is developing. In Western Australia, a landlord can ask for a pet bond if they allow a tenant to keep a cat or a dog. The pet bond can only be used to fumigate premises at the end of the tenancy. It can be no more than $260 (there are some exceptions). In other jurisdictions, pet bonds or agreements are being used informal basis. So who determines if fumigation is needed? The landlord? Clearly, a vested interest clearly exists there. This could be an opportunity for unscrupulous landlords to make some extra cash at the expense of pet owners. And how do we even know that the landlord will use the pet bond for fumigation?

The issue came up in Queensland when there was a review of tenancy laws in 2007. The Committee decided the maximum bond of four weeks was sufficient. This definitely reflects my view. These kind of bonds create an additional barrier to renters with pets trying to enter the private rental market. I do not think other states and territories should follow in the steps of Western Australia. Pet ownership is a normal incident of living. It should fall within a permitted zone of tenant activities. It is a right to be protected, not taken away.

I must admit that I am biased. I have a much-loved black Persian cat Mojo. I used to live in a flat and the landlord did not allow pets. Almost everyone in the block had a cat. Pets would be hidden at a friend’s place come inspection time. If the law was amended to protect pet ownership, tenants could finally stop hiding their pets. We just need someone with leadership to stand up for pets.

See More:
  

• Dan Nancarrow, 'Vet pleads for landlords to allow pets', Domain, 11 January 2012
• Melbourne Institute of Applied Economic and Social Research, Socially Responsible Pet Ownership in Australia: A decade of progress (2006)

 

 

Fighting the System: My toaster has more rights!

Matt was a frustrated and fed-up tenant. Matt and his family moved into a rental property in Victoria. Be warned if this property is still being rented out. The address is 20 Orange Grove of Bayswater.

They realised after they moved in that the property needed serious repairs. Some of the problems made their lives absolutely ‘miserable’. Water from leaking gutters splashed into the rooms during heavy rains and damaged the wooden floors. They had to put newspaper and clothes under the doormat to absorb the water. This is a serious problem. We’re talking Melbourne here. The city of four seasons in one day.

There were several leaking points under the eaves. The stove had three defect burners and they had to use a match to light the oven every time they used it. From what I understand, the automatic ignition was broken. As anyone would, Matt and his family found this pretty annoying. The fly screen nets in the lounge room didn’t fit properly which meant they couldn’t keep the mosquitoes out. Matt couldn’t sleep because the little bastards kept biting him.

Then there was the three taps dripping throughout the night. Drip, drip, drip!!! The taps could not tighten properly so Matt would get up in the night and tighten them again. Matt and his family used containers to catch the drops. Then there was the bedroom doors which could not be closed, a heater which did not work, faulty power points, missing outside light switch and broken kitchen light switch, as well as defective and missing florescent garage lamps.

Matt did what anyone would do in his situation. He emailed the property manager, Danielle Hunter, and informed her that the property had a number of faults. This was at the end of November 2011. He then filled out a repair form listing each fault. This was at the beginning of December 2011. And Ms Hunter responded shortly after. She flat out said, ‘In regards to the gutters, these will not be repaired or replaced. You took the property as inspected. We are willing to fix issues that affect you living in the property but the guttering does not’.

My mouth dropped when I saw this. Ms Hunter is a Senior Property Manager at Wantirna Professionals and agent of Dawne Hedges. Is she not aware that a landlord is responsible for maintaining rented premises in good repair under section 68 of the Residential Tenancies Act 1997 (Vic)?

Ms Hunter actually refers to the historical concept of caveat emptor or ‘let the buyer beware’ when she says, ‘You took the property as inspected’. But this an out-dated concept. And I don’t see how an ordinary person could possibly notice the need for gutter repairs at a property inspection on a sunny day...unless of course you’re super-psychic or superman.
In the olden days, buyers did not have recourse against sellers for faulty products unfit for ordinary purposes. The prevailing theory of laissez faire was that market forces of supply and demand would regulate the quality of goods in a fair way. The government intervened in the 19th century and introduced consumer legislation because the free market economy produced unfair outcomes.

This history lesson comes with a point. To illustrate, I will use a simple toaster. Today, if I buy a toaster and it doesn’t work, I can take it back to the store tomorrow and get a refund or exchange. This is simple and easy in most cases. And if doesn’t work, you call Consumer Affairs Victoria, and they hassle the business. But if you rent a house, and it turns out to be faulty, then it’s a lot more complicated, and significantly different to the purchase of a product. A renter has expended money, time and effort moving into a house. It’s not that simple and easy to get a refund or exchange.

So I think we have the situation where the government has intervened with residential tenancies legislation to prevent unfair outcomes. But I think it’s a failed experiment. The current construct does not work. The market forces of supply and demand still operate. In most cases, if a renter moves into a house and it is unliveable they simply move out, find another place, hope for the best, and incur additional costs. A consumer with a broken toaster has more rights than a renter.

 

Matt actually responded to this letter more politely than what I would have. He pointed out that the leaking gutter affected his living because the rain splashed into the lounge room and the water needed to be mopped up constantly. So basically, Ms Hunter’s attitude is about two centuries out. I almost feel guilty picking on poor Ms Hunter. Actually no, I’m just joking. But I am very concerned about the attitudes of some property managers.

 

In Australia, consumers have more rights than tenants under the law. This must change.

 

 

 

 

Threats and Intimidation: Fail!

Surprise, surprise...tenants are failed again. Threats, intimidation, and harassment can occur in tenancy disputes. But you wouldn’t know it looking at housing laws.

 

Daniela is an amazing young woman. Highly educated, highly motivated, and hard-working. She moved into a new place in Sydney under an arrangement with the head tenant. The head tenant was so abusive Daniela stayed in her room and could not use the kitchen or lounge room. If Daniela left a toilet roll in the toilet, the head tenant would send her abusive text messages. Daniela was so scared of the head tenant she let her have her underground car space. The head tenant screamed abuse at her if she accidentally splashed water on the glass shelf. The head tenant decided to evict Daniela giving her only 14 days notice. The head tenant should have given her 60 days notice.

The head tenant also withheld Daniela’s bond because she didn’t wash the bedroom window and the toilet seat was broken. Even though Daniela was scared of this woman, she offered to pay for the toilet seat and clean the window. This offer was refused. The head tenant did not lodge Daniela’s bond with the Rental Bond Board. So Daniela lost her rental bond of $450. I don’t see how the two claimed items add up to this amount. Daniela was so anxious she decided to move out a week early. So she lost $250 in rent. The landlord said Daniela could talk to him about the situation, but Daniela just wanted to move on. For this reason, Daniela did not access other remedies available to her under the Residential Tenancies Act 2010. All up, Daniela lost $700. In my view, Daniela has been subjected to a kind of economic violence.

If you don’t think tenancy disputes arouse heated emotions, check out this video from the United States. This landlord crashed his Hummer into his own rental property when his tenant got behind in rent.

In Australia, people can obtain protection orders from local courts. They are also known as apprehended violence, intervention, or restraining orders. Protection orders are designed to prevent actual or feared personal violence. They can cover physical, sexual and psychological abuse. Protection orders can address things like threats, stalking, intimidation, harassment, property damage, and assault. Protection orders are pretty flexible and usually tailored for specific situations. They can prohibit a person from approaching, contacting or otherwise acting inappropriately. But specific guidelines tailored for tenancy situations are not available to tribunals and courts. People like Daniela, probably leave and don’t take further action.

The only specific coverage I could find is contained in section 70 of the Residential Tenancies Act 2010 (NSW). The provision does not have broad-ranging application and only deals with domestic spousal violence. If a protection order is made preventing access to residential premises, a victim of violence can change the locks and take over the lease agreement. No other kind of violence is addressed in the context of tenancy. The only other section you could use is section 206, where a tribunal can appoint a property manager if a landlord has seriously or persistently violated the Act. Obviously, one could only use this mechanism in extreme cases.

The state should intervene to protect tenants in situations of violence, harassment and intimidation. State and territory governments need to consider the relationship between residential tenancy laws and other laws. If a protection order is necessary, it should take into account the unique relationship of a landlord and tenant.

If a tenant wants to leave, they should be able to vacate the residential property without notice without paying rent for that period or other financial penalty. They should be compensated for costs incurred in moving and relocating to safety, and should be provided with a reference so their prospects of renting again are not jeopardised. If they don't want to leave, a property manager should be appointed to handle the tenancy and mediate with the landlord. Landlord should be prevented from using existing law to further harass and intimidate, such as, baseless referrals to blacklisting databases. Tenants should be protected from retaliatory evictions and repeat appearances defending such applications.

Tenants in vulnerable and potentially volatile situations need practical protection. No one should live in fear. And that’s why I say...fail.

 

The Invisible Problem

If so much inequity exists in tenancy regimes, why don’t we hear more about it? My educated guess puts it down to implicit and systemised coercion. This is just a bunch of fancy words that means a landlord can do what they like with little impunity.

Everyone who rents knows landlords and real estate agencies can impact on future prospects of renting in the private market. Landlords and real estate agencies do not have to provide rental references and can actually give bad references. Landlords and real estate agencies can refer tenants to blacklisting databases. This power is particularly important at the moment given the current state of the housing market. The end result is no home.

Say we have a situation where a good tenant has a bad landlord. The landlord refuses to undertake and pay for repairs. Let’s look at the options open to a tenant. A tenant can do nothing and just put up with it. A tenant can organise and pay for repairs. Or the tenant can take the landlord to tribunal. It’s a safe bet that a landlord won’t give the tenant a good rental reference. If the landlord is particularly nasty, the tenant can be referred to a blacklisting database. So the lesson is tenants can end up in situations where they are penalised for fighting for their rights. We can’t assume that all tenants are skilled in dispute resolution. Tenants are just ordinary people – cleaners, labourers, teachers, etc. I think many tenants adopt the ‘don’t rock the boat’ approach.

Landlords and agencies can exploit existing mechanisms. They can delay bond payments which may be needed for the next rental property. They can make unreasonable but successful claims against bond moneys. Claims can be difficult to dispute in situations like when a tenant moves interstate or overseas. A tenant may not be aware of a claim if the bond authority is not given their forwarding address. A centralised system should be electronic and online. In this computer age, and given the mobility of tenants, email should be the primary mode of communication, and online deposits rather than cheques should automatically be the method of payment. To my mind, this is just common sense. Come on, guys! So tenants know without being told or threatened, landlords and real estate agencies can make things very difficult for them. In the real world, it is usually better to maintain positive working relationships with landlords and property managers.

We see the occasional shock story on shows like Current Affairs and Today Tonight. Frank Cassar was Australia’s slum lord from hell. He was a multi-millionaire property owner and developer in Melbourne. He did not repay rental bonds, failed to perform essential repairs, entered premises unlawfully, and threatened and intimidated tenants.

Tenants had complained about Frank Cassar for at least twenty-five years. He had been take to the Victorian Civil and Administrative Tribunal (VCAT) over sixty times. In 2006, the Minister for Consumer Affairs took him to the Supreme Court and obtained an order for him to manage residential premises through a licensed real estate agent. Sometime after, a protest was organised at his place of business.

After some googling, I realised Frank Cassar had passed away in 2011. He owed tenants over $40,000 in compensation. I don't know whether the tenants were ultimately successful in obtaining moneys owed. What can we take away from this tale? This is obviously an extreme case but it demonstrates landlords can easily circumvent existing legal protection. So basically this landlord had to die for tenants to be protected. Is it just me that sees a problem with this picture?

If you still don’t think there’s a problem, turn to a friend and ask. Almost everyone has a story, or knows someone who does. I guess some people just accept the status quo. I think the prevailing sentiment is that this is just life, this is just the way things are. But to my mind, we need a new way of thinking. If tenancy law has so many problems, why hasn’t someone done something about it? We have bureaucrats, politicians, and lawyers. These individuals usually move in a circle of homeowners rather than renters. Gripes about tenants are more explicit to people in power.

Public dialogue is very much about the rights of the landlord and real estate agencies. We can see that with the Queensland Government’s targeted review of tenancy laws. In Queensland, a landlord or real estate agency can nominate a two-hour window for inspections. They want to increase this window to three hours. This is just ridiculous. Basically, we have a situation that the law actually encourages incompetence and poor time management. In any other professional context, you don’t make an appointment for a window of time. You make a time for a meeting and you stick to it. And what about working tenants who need to take time off work and lose income to attend inspections?

What kind of Australia do we want to be? A country that doesn’t care? Doesn’t take initiative? Merely follows and does not lead? If Australia was a character on the Simpsons, who would Australia be? Lisa – smart and motivated? Mr Burns – evil and calculating? Homer – dim-witted and accident prone? In my view, considering the current state of tenancy laws, Australia is Homer. And that makes me very sad.

See more:

• Andrea Petrie and Ben Butler, ‘Frank Cassar, Australia's worst landlord, has his day in court’, The Age, 3 August 2011
• Denis Napthine, ‘Supreme Court orders injunction against Frank Cassar’, media release, 8 August 2011

 

 

Bond Interest: Final Comments

Now comes the fun part. There’s enough holes here to sink a leaking ship. I almost feel like running for political office. 

Tenants are expected to pay for law reform, dispute resolution, information services, and administrative management. Why isn’t a tax imposed on real estate agencies? They are a business and landlords pay for their so-called expert services. Some landlords make a business out of the investment in residential properties. This is substantively different to the provision of goods and services. Why isn’t a tax or levy imposed on landlords for the use of advisory services?

I don’t have any particular knowledge of the intricacies of government funding so I will talk in loose terms. Say we have a workers compensation authority that is funded by premiums. Premiums are used to influence the behaviour of employers so they provide a safe working environment for their employees. Say we have a local council that fines car owners for parking infringements. Car owners are penalised if they don't pay for parking. I won’t get into how many parking fines I have been given!

When it comes to interest accrued from residential bonds, tenants have not done anything wrong. They have not violated a law or committed an unlawful act. The accrual of interest from tenant bonds is substantively different. I’m going to pretend to be a government administrator. I understand the need to pay for programs and services. But this must be done in a structurally fair and just manner. In some states and territories, landlords can be investigated and fines can be imposed. I would be interested in figures which show the breakdown of interest compared to penalties. What would this show?

 

Institutionalised, legalised and systemised bullying is no worse than a child beating up peers on the playground. Who is the bigger bully? The landlord or the government? Have we merely swapped one for the other? Clearly it is better for a statutory authority to hold onto bonds rather than landlords. Before the reform in Tasmania, some landlords were treating bond money like it was their own money for personal use. But if the money is managed by a statutory authority, and landlords exploit loopholes and unfairly claim bond moneys anyway, what is the point of another level of bureaucracy which tenants pay for anyway. Sorry if I sound a bit harsh but good intentions don't translate to results on the ground.

I would also ask why tenants should pay for a system that is legislatively and administratively biased in favour of landlords. Tenants are paying for a system that does not effectively enforce their rights. If we take a birds-eye view of tenancy laws, we can see the significant impact of landlord lobby groups and the somewhat tortured attempts of hamstrung tenant advocacy groups.

The use of tenant bond interest also raises a few questions. Why should tenants in the private sector forego advice and advocacy to provide for public housing they don't use? Why should a government have access to tenant interest for general governmental purposes? Funding is important. As everyone knows, money is power. Tenant services have done the absolute best they can do with the funding they have been provided by respective governments. When the same body makes decisions about funding of tenant services, but also provides public housing, there is a conflict of interest.

States and territories permit the allocation of funds for the purposes of research and education. Education is great. I’m all for it. Whether this happens is another matter. But I’m looking at the bigger picture here. What is the point of tenants knowing their rights when their rights are not that great to start off with? What is the point when landlords have better rights, and more loopholes to exploit?

Turning to the funding of tenancy tribunals from residential bond interest. Let’s use Victoria as an example. From figures provided by VCAT, roughly 95% of applications are lodged by landlords. Surprise, surprise. I have even heard VCAT referred to as a kangaroo court. I don’t believe for one second this figure accurately reflects the division of fault between tenants and landlords.

Statistics only take us so far. But I think it shows the current system is biased in favour of landlords. We can’t draw this conclusion in relation to all states and territories, but I wouldn’t be surprised if figures were similar. I think the tribunal system has failed when it comes to tenants. Whether it comes down to legislative instruments or judicial discretion is anyone’s guess. 

My brain hurts now as I’m sure yours does. So I am going to end this post on a light note. View animation below for a few laughs.

Bond Interest: The Rest of Australia

As promised, I have looked into what happens to interest accrued from residential bonds in states and territories other than Queensland. This is a departure from my usual approach but the question  is obviously very pertinent to tenants. So here is my tedium alert.

In New South Wales, rental bonds are pooled to earn the maximum amount of interest. Tenants are paid a small amount of interest provided the bond is returned. The rate at which interest is payable is determined by the Commonwealth Bank on a balance of $1000. See section 173 of the Residential Tenancies Act 2010 (NSW). How did they arrive at this figure? I would think that the average bond amount is significantly more. From the start of this year, the average rent per week is about $500. Creativity rather than mathematics is my forte, but this seems decidedly odd to me. The majority of income earned from the collective pool is allocated to the Consumer, Trader and Tenancy Tribunal and the Tenants Advice and Advocacy Program.

In Victoria, tenants are not paid any interest earned on their bond whether it is returned or not. See section 436 of the Residential Tenancies Act 1997 (Vic). From what I understand, the interest goes towards funding the Victorian Civil and Administrative Tribunal. Apparently it used to fund tenants’ advice and advocacy services but this is no longer the case. The Tenants Union of Victoria is dependent on the Office of Housing, Victoria Legal Aid and Consumer Affairs Victoria.

In Western Australia, tenants are not paid any interest at all. I could not locate much information. But I think interest is earned from a collective pool of bonds from which investments are made. Some of the income is given to the Department of Commerce Bond Administration Section as reimbursement for costs and expenses. The WA Magistrates Court can also clawback some funding relative to the number of minor tenancy matters.

The WA Department of Housing also gets a bite of the cherry and can access funds for any public housing purpose if available. If there are any funds left over, the WA Government can step in and allocate funds to the consolidated revenue account.  Check out the schedule to the Residential Tenancies Act 1987 (WA).

I would be interested in figures which indicate how much money the WA Government takes from tenants. Apparently, grants can be applied to WA tenants’ advice and advocacy service. But this is the notice I found when I looked at the website of the Tenants Advice Service - 'Due to unforseen circumstances, Tenants Advice Service is unable to give advice for the foreseeable future and apologise for this inconvenience. If you are in need of urgent assistance, please contact either Department of Commerce or Community Legal Centre'. All telephone and email advice services are not available. What’s going on here?

Turning to South Australia, things get a little better. Interest is accrued from a collective pool of bonds and invested like in Western Australia. The Commissioner for Consumer Affairs and the Residential Tenancies Tribunal are reimbursed for the administrative burden of handling tenancy services and matters. Unlike Western Australia, however, tenants are entitled to some interest from their rental bond. The interest is calculated under a formula released by the Minister for Business Services and Consumer. The interest calculated depends on the amount of bond returned to the tenant. It accrues from the date the tenant paid the bond to the date the tenant is reimbursed. Look at section 63 of the Residential Tenancies Act 1995 (SA). This process seems to be a lot fairer than what we have seen in other states and territories.

It gets somewhat better when we head north to Australia’s famous Uluru. In the Northern Territory, there is no bond authority like other states and territories. A tenant is entitled to interest if the bond money is kept in an interest-bearing trust account. This is so except when the bond amount is held by a real estate agent. For some reason, and I don’t know why, real estate agencies are entitled to the interest. See section 114 of the Residential Tenancies Act 2012 (NT). They’re laughing all the way to the bank. They collect their fee from the landlord and obtain interest from tenants on top of this. Clearly, the downside to this approach is that not as much interest accrues but there is no need to pay for the operation of a statutory body.

Turning to the home of Lack Burley Griffin. The way interest is managed in the Australian Capital Territory is similar to most other jurisdictions. Bond money is kept on trust and interest is kept in a special account. The interest is put towards the operation of the Office of Rental Bonds and the ACT Civil and Administrative Tribunal. The Tenants Union ACT is allocated funding for some of its services. See section 28 of the Residential Tenancies Act 1997 (ACT).

If we look south to the island state, Tasmania is in a period of transition. In 2009, the Rental Bond Authority was introduced along with the Residential Tenancy Commissioner. In 2009/2014 period the new scheme is expected to cost $1.5 million. Apparently, it will be run on a cost-recovery basis until managed bonds start to bear interest.

I will make my conclusions in the next instalment...

 

See more:

'Rental squeeze hits in Australian capital cities', News.com, 20 January 2012

 
 

Bond Interest: The Queensland Experience

The state and territory governments deal with interest accrued from residential rental bonds in different ways. I have developed an interest in this issue because of the recent events that have taken place in Queensland. This is what happened...

The QLD Tenants Advice and Advocacy Service (TAAS) is funded at state level by the Queensland Government. Or rather, it was. QLD Housing Minister, Bruce Flegg, decided to discontinue tenant advice services and reallocate funds towards social housing.
The 20-something affected services quickly swung into action and created a powerful grass-roots movement. The Commonwealth Government, through Housing Minister Brendan O'Connor, stepped in with emergency funding taking tenants’ services through until June 2013. At this stage, we don’t know what happens after that.

At first glance, you might think Mr Dis-Honourable made the right decision. After all, people are homeless...right? But think again. It is patently clear he does not understand push factors into government housing, for example, mental health issues. Tenant advice services help vulnerable and marginalised individuals with problems that might result in their removal from existing housing onto the streets. 

If we understand housing to be a significant yet under-rated human right, how would an action contributing to housing by detracting from it make any sense whatsoever? In any attempt to tackle homelessness, the government needs to understand the social ramifications of its action. We have seen that 1970’s style with the well-intentioned creation of public housing ghettoes. In the ghetto (insert falsetto).

I also understand that the funding allocated to tenant advice services in Queensland is but a small proportion of overall interest generated from tenants’ bonds. So how will its reallocation to the creation of additional public housing stock alleviate the stress placed on housing to any significant degree? Last year, the collective interest earned in Queensland amounted to about $41 million and a mere 12% (about $5 million) was allocated to tenants’ advisory services.

Or does Mr Dis-Honourable have other ulterior motives? I’m a straight shooter and naturally suspicious…but his decision to introduce a three-strike policy sounds ominous. He wants to ‘crack down on unruly tenants’ by evicting them if they receive three strikes for disruptive behaviour like noisy parties, vandalism, or destruction of property. But these kind of social issues are usually managed by other laws. For example, criminal charges can be levied against a person for certain things, like assault and battery. If these deterrents aren't effective, shouldn’t they be reassessed? He is basically saying is law-breakers don’t have a right to housing. I quite agree with measures which encourage respect for government housing and deter property damage. But even prostitutes, junkies, and other degenerates need a place to live. With changes such as this foreshadowed, TAAS will be needed to protect the rights of public housing tenants.

My understanding is that we ('the taxpayers') pay money ('tax') to our governments for community programs and services. Mr Dis-Honourable has presented Queensland with a false dichotomy. Clearly, it’s not a question of one or the other. The provision of public housing for vulnerable and marginalised peoples is a core government service in a wealthy country like Australia.

The Queensland Tenants’ Union also makes an interesting comparison between tenants and landlords in the context of government-funded home buying incentives. In Queensland, I understand the government has reintroduced stamp duty concessions for repeat home buyers. Tenants are expected to pay tax and forego interest earned on bonds to support a system that perpetuates injustice while the government actually supports the concentration of wealth in repeat home buyers who become landlords. It is structural inequities such as this that result in the clique - the rich get richer and the poor get poorer.

 

I support the use of economic stimulus provided it is applied in a fair and equitable manner. I guess it is the dream of most Aussies to have a home and a patch of grass to call their own. If the Commonwealth government was to step in and reform the sector, here’s an idea. For tenants who want to own their own home one day, why can’t the interest earned on rental bonds be allocated towards a deposit?

 

In my next instalment, I will look into what happens to bond interest in other state and territories.

See more:

• Penny Carr, ‘Bruce Flegg's decision to stop funding tenants' advisory service will cost all Queenslanders’, The Courier-Mail, 7 September 2012
• Sarah Vogler, ‘Unruly public housing tenants face three strikes home policy’, The Australian, 31 October 2012

Soon, Be Patient

Narelle’s story starts with an interstate move with her two grown-up sons from New South Wales to Victoria. They signed a 12-month lease for a 3-bedroom flat through Oliver Hume in South Bank. But Narelle and the boys had to leave the flat early when the plumbing system ‘crapped itself’. They broke the lease early and did not have to pay rent for a month. The landlord is not the culprit here.

Narelle and the boys moved into their new house straightaway. The property manager informed them the inspection went well, the flat was in great condition, and the bond money would be returned. Fast forward about three months. To this day, the bond money has still not been returned. Narelle has phoned and emailed Oliver Hume constantly. She has been given various excuses. Apparently the general manager is away on holidays. Oh poo. I don’t see how this impacts on Narelle’s situation.

The property manager actually replies to an email and says the paperwork has been processed. So Narelle phones the Residential Tenancies Bond Authority (RTBA). Understandably, she wants to check the status of the application. But for privacy reasons, the RTBA won’t provide her with any information because she doesn’t know the bond number. I really don’t understand why the RTBA can’t verify Narelle’s identity with a few key questions like other government authorities. This is a pet hate of mine. I can't stand bureaucrats who think they understand privacy law. Narelle emails the property manager and requests the bond number. The property manager doesn’t reply because Narelle can then access information about the bond. This might be a case of one person falling through the cracks. But if somebody investigated, I wonder if other issues would surface...

Narelle is in a very fortunate position. Her mother loaned her money to pay for the bond for the new house. Consumer Affairs Victoria say a bond should be returned within two to three business days. I am very curious as to whether this estimate could be backed up by official figures. If everything went according to plan Narelle could have applied the original bond money to the new house. But this did not happen.

If another family was in the same situation, but were unable to come up with the bond, what are they to do? There does not seem to be any statutory time limits when it comes to returning bond money. There is no incentive for owners or real estate agencies to return bond money in a timely fashion. They are not penalised for failing to submit paperwork to the RTBA expeditiously. 

And what happens if a tenant just gives up on reclaiming bond money and later cannot be located because they have moved house a few times? It would be fair if landlords and real estate agencies were given five working days from the date the premises were inspected. That’s more than enough time. Performance has taken place and the contract has come to an end. Moreover, a tenant does not have access to accrued interest even after the premises have been vacated. I don’t understand why a tenant can’t submit a form to the RTBA to request that bond moneys be applied to a new property. Is this too easy? Maybe so. In Canberra, the Office of Rental Bonds can transfer bond moneys to a new address provided the landlord or real estate agent agree to this method of payment.

If Narelle can’t pressure Hume Oliver to liaise with the RTBA, what is the next step? I believe Narelle would have to submit an application to the Victorian Civil and Administrative Tribunal. But why should Narelle have to instigate tribunal proceedings over an undisputed bond amount? This is a minor administrative matter. Some things should be enforced by an administrative government body. 

As we all know, Australia is a federal constitutional country. The various state and territory governments enact laws with respect to tenancy. In the result, tenancy laws are highly fractured and differ greatly from state to state. Tenants are divided as a result. Not being a cohesive whole, it is much more difficult to mobilise. The Council for Australian Governments (COAG) might be an appropriate vehicle for change. Stage and territory governments can cooperate to achieve consistency. For example, the introduction of near-uniform defamation laws some years ago. 

But I have gotten ahead of myself. I have forgotten that no one really cares about tenancy matters. It’s not pink like breast cancer. It’s not rainbow like gay rights. Political will is merely one barrier on the road to change. 

And this is where my diatribe fizzles out until next time. And Oliver Hume...pull your finger out! Honestly, it’s not hard. 

The Exploitation of Young Women

This dastardly tale of exploitation begins with a young pregnant woman. The lass fell pregnant with her first baby. She started looking for a place and was about to pop when she was approved. The house wasn’t great, but it was a house and a roof over her head.

After she moved in, she realised there was no hot water and the toilets didn’t flush. Obviously things you don’t check in an inspection. So she left the house until the plumbing was fixed a week and a half later. She paid rent up-front and wasn’t reimbursed for time not spent in the house. Pulling out of a lease isn't an option when the rent has been paid in advance and the cost of moving has already been incurred.

The carpeted floor was disgustingly filthy and unclean. The previous tenants did not have the carpets professional cleaned. So she steam-cleaned the carpet at her own expense. The young lass also found a dead rat in her bedroom when she moved in. She was absolutely speechless. A young struggling lass with a new baby comes up with bond and rent in advance. Honestly, you would think that a vermin-free environment would be a pre-requisite. And night after night with a new baby, she hears scurrying in the walls. Rats in the walls. Seriously, puke.

  

Later on, the lass realised that the house came with its very own special swarm of bees. The bees lived in the wall right next to the front door. She asked for the house to be insect-sprayed. This was not done. She was advised to purchase fly spray and use alternative entry. Curtains were not provided with the house. So the young lass requested some. She got what she asked for, but a few inches shorter.

The kitchen tap does not sit properly over the sink, so the lass has to use her hands to funnel water into the sink every time she washes the dishes. The house is impossible to heat because there are gaps in the wall. The gas point had been sawn off for some unknown reason. The real estate agency advised the young lass to fix any problems herself because the landlord was broke. This is a well-known and supposedly reputable real estate agency. The lass is a single working parent. Why should she be responsible for improvements and repairs?

 

The lass raises an interesting point about security. She asked that the landlord pet-proof her backyard so she could keep a dog to deter burglars and home invaders. Pet ownership can be an important home security measure. Nothing says ‘run like the wind’ like a fast dog with big yellow teeth: 'Smithers, release the hounds…' A dog is definitely a cheaper option than an expensive alarm system. As this tenant is a young lady, I think the request is quite reasonable. In New South Wales, landlords are legally obliged to provide security devices to ensure rental properties are safe. So its not really clear whether they have a duty to do things like pet-proof yards.

So what can we take away from this dastardly tale of exploitation? I think it is entirely possible that the lass was approved because she is young and inexperienced when it comes to dealing with tenancy issues. So I asked, why not take the landlord to the tribunal? The lass says she ‘doesn’t want to piss off the landlord’ and ‘doesn’t have enough time to fight’. The lass wanted to stay anonymous because she doesn’t wanted to get bad-mouthed in a small town. She wants to get a decent place and will need a reference from the landlord. She needs a good relationship with the real estate agency because they might help her find a new place. She doesn’t want a reputation for being a bad tenant.

The government should protect renters, such as this young lass. Legislative controls are necessary because the housing market has tightened so dramatically. Basic enforceable standards need to be introduced regarding pest control, plumbing, and heating. Renters should be able to report landlords for failing to meet minimum standards.

Part 2: Bad Landlord's Manifesto

Have the bells started ringing yet? Have you had a bad landlord experience? During my trials and tribulations, I bitched and moaned to all my friends. More often than not, their eyes would glaze over while they politely feigned interest. Did the same happen to you?

But my friends did share a few stories. One friend told me about the time she had a peeking tom for a landlord. He used to peek in her windows at night after she came home from work.
Another friend told me about the time he moved into a house which had a very, very bad mould problem. The landlord had inserted a non-standard clause making mould removal the tenant’s responsibility. The tenants didn’t realise until after they moved in and signed the lease. And then another friend told me a story about the time she lived at university. There were loads of issues, but one issue in particular was a significant rent increase. Most of the students relied on Centrelink payments like youth allowance. The students did not have any recourse because they were not covered under the relevant tenancy law.

A landlord and tenant relationship is not equal. When there is no equality, an imbalance of power exists. Landlords usually have access to things like information, expertise, money. Think Karl Marx if you have heard of him.

Tenancy laws seem to be seriously biased in favour of landlords. Landlord lobby groups seem to be more successful than tenancy services. This seems to be a question of funding. And why are tenancy services poorly funded? Well I suppose this kind of thing isn’t important to governments.

Housing and security is right up there on Maslow’s hierarchy of needs. The stress, the tension, the anger, the anxiety all come from our need for a safe, stable, happy home. To most landlords, a rental property is just a safe investment. But to tenants, a rental property is a home and all that entails. A home means many things to many people, but to me it was a haven from the outside world and all it entailed.

I want to make one more point – not all landlords are bad. But my focus is bad landlords because I don't think the law sufficiently protect tenants.

The important thing is to remain calm, support each other and keep our good humour. If you are having a rough time, please contact Lifeline on 13 11 14.