Rental Laws

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GUEST OBSERVER
For renting to become a truly viable, long-term alternative to home ownership, greater rental affordability and security is needed.
Deloitte Access Economics’ Chris Richardson recently suggested that young Australians would be better off renting than trying to buy a house. He argued:
… rents today make a lot more sense than housing prices.
This may be true. However, the situation for renters is far from clear-cut. Rents continue to increase in Australian cities, and are out of reach for low- and very-low-income earners.
Renters also face substantial housing insecurity. In Australia, 50% of renters are on a fixed-term one-year lease; 20% are on a month-to-month “rolling” lease. 
For renting to become a truly viable, long-term alternative to home ownership, greater rental affordability and security is needed.
Rental affordability
Longer-term structural changes to tackle housing affordability, including boosting the supply of social housing and increasing tenure diversity, will be essential. There are some promising moves, including the recently announced proposal for a bond aggregator model to fund social and affordable housing.
Failing a substantial increase in affordable housing, there will be a need to increase rent assistance payments, particularly in high-cost regions. 
This acknowledges that housing costs differ across the country and that many low-income earners need to remain in high-cost regions. This includes older people whose social and family networks are in these regions, and people who work in these areas.
Many industries in high-cost cities are dependent on people who earn low and very-low incomes. These people have a right – and need – for affordable, secure housing – and a house that is a home.
Affordability is the thin end of the wedge
For renting to become a true alternative to home ownership, greater rental security is needed. 
To move toward secure rentals we need to reward long-term investment. One example might include encouraging institutional investors, including superannuation companies and other businesses that invest in large amounts of rental housing, who are in it for the long haul.
However, there is no reason to assume that institutional investors will offer more affordable rental properties, or be any better landlords than so-called “mum and dad” investors. We therefore need to pursue changes to rental laws to ensure renters, including the growing generation of long-term renters, can experience a secure sense of home. Specific changes include:
Removing no-grounds eviction. The perceived risk of eviction leads to stress for renters. And the right to no-grounds eviction can lead to retaliatory eviction by landlords when tenants exercise their rights, including rights to maintenance and repairs.
The Tenants’ Union of NSW has called for a balancing of landlord and tenant interests through tenancy laws that specify reasonable grounds for termination.
Such laws could follow the German example. In Germany, rental laws ensure security of tenancy while retaining the right of landlords to terminate a lease in certain circumstances, such as if a tenant violates the lease agreement (for example, by not paying rent) or if the landlord requires the property for personal use. 
Rent increases are sometimes a “backdoor” way of evicting tenants. In a recent survey, 11% of renters reported receiving a “rent hike after requesting a repair and 10 percent said that their landlord or agent became angry”. We need stronger regulation of rent increases and stronger penalties for unreasonable increases.
There are precedents for this in other jurisdictions. Germany again provides a great example. There, rent increases are allowed less frequently. And they:
… must be based in the rents of three similar dwellings or a database of local reference rents and rents may not increase more than 20 percent over three years. 
Ensuring the right to make a home. Rental laws need to ensure the right of tenants to make their house into a home, including making cosmetic changes to a property, ability to keep pets, and allowing alterations that would allow an older person or person with a disability to live there.
Some older renters I have interviewed recently have had to move after these types of adjustments were rejected by landlords who thought age-related modifications were not attractive.
In New South Wales, the right to make changes that would ensure a property is liveable for people with different housing needs is being considered as part of the current residential tenancy law review. However, the right to make cosmetic changes is excluded.
Popular wisdom often suggests that tenants and landlords have different interests. In fact, they have very similar interests. Both benefit from secure tenancies and a property that is well maintained and cared for.
Failure to ensure rental affordability and security will require a raft of policy changes in other areas, including pension income calculations that assume home ownership. It will also condemn a generation of long-term renters to increasingly unaffordable and insecure housing.
Emma Power is an ARC DECRA fellow based in the Institute for Culture and Society at Western Sydney University. She can be contacted <a href="https://theconversation.com/profiles/emma-power-250930">here</a>.
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For renters, making housing more affordable is just the start: Emma Power

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EXPERT OBSERVER
RE/MAX Australia Managing Director Michael Davoren puts his network’s support behind the Real Estate Institute of Queensland’s call to the Queensland Premier to reconsider proposed measures relating to tenancy.
Mr Davoren vehemently agrees with the REIQ that a more balanced and fairer framework providing equal protection for renters and owners of investment properties is needed.
The REIQ has taken the fight to the state government because the right of the landlords has been completely eroded – and the pervading perception of landlords as wealthy landowners is false. Fact is that 77 per cent of singe-property landlords are ‘ordinary people’ earning less than $100,000 a year.
Mr Davoren’s concern is that the current ‘protections’ are potentially devastating to a much broad sector of the population.
I have grave concerns about the information the Queensland Government is basing its decisions on.
People in the real estate industry – residential and commercial - have access to possibly more sectors of the population than any other, and certainly at the grass roots level.
This is about shelter… and when you talk about shelter – whether for residential or commercial premises, for owner occupiers, for tenants, for businesses – all roads lead to real estate.
We in the real estate industry are the experts in our field, just as those in the medical profession are the experts. Stop listening to people who are not the experts.
Mr Davoren agrees that governments have to lean towards the tough side when it comes to COVID-19, the virus itself, because it involves saving lives but he suggests what the Queensland government is doing in relation to landlords and tenants goes beyond dealing with the virus.
It’s a short-sighted vision. If the proposed measures go through, large numbers of landlords will divest themselves of their investment property as soon as they can. The tenant becomes the real loser. With fewer properties to rent, rents will go through the roof.
He said leadership particularly now, needed to demonstrate confidence, strength and sensitivity, and such leadership was drawing the real estate industry together, on its own behalf and on that of real estate consumers, to address how COVID-19 affects the population.
REIP (Real Estate Industry Partners), a group of the largest real estate brands and independents in Australia, is across state boundaries and engages all levels of government. At the state level, all the institutes are stepping up.
Chairman Peter Brewer and CEO Antonia Mercorella have stood up as leaders in a time when good leadership is needed like never before.
He said the Palaszczuk Government was quick to respond to the thousands of letters it received in a day from landlords, following the launch of the REIQ’s ‘Everybody Matters’ campaign.
It was pleasing to read that the Queensland government promised to consult more widely on its proposed rental protections but I sincerely hope this happens in time to prevent  the initially proposed measures being passed when Parliament sits on Wednesday 22 Apri.
MICHAEL DAVOREN is the RE/MAX Australia Managing Director 
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j.ballantyne1990-6AQqhLzZaK

RE/MAX head calls for Queensland to rethink COVID-19 rental rules

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Rules for keeping a pet in a rental property and the rights of landlords to enter rented premises are among topics Victorians are being asked to have a say on, as part of a Victorian Government review of the state’s rental laws.
Public consultation is underway on the third in a series of issues papers as part of the review.
Rights and Responsibilities of Landlords and Tenants considers how the Residential Tenancies Act 1997 (the Act) sets boundaries around what tenants and landlords can and cannot do throughout the tenancy.
Issues up for discussion include all aspects of letting out a property, from the first application and screening process, to moving in and compensation for ending a lease early.
Director of Consumer Affairs Victoria Simon Cohen said the review is calling for people’s views on matters such as tenants' rights to keep pets and to sub-let a property, tenant privacy and notices to end tenancies.
“The review forms part of the Victorian Government’s Plan for Fairer Safer Housing, and aims to ensure rental laws strike a fair balance between the rights and responsibilities of tenants and landlords across all forms of rental accommodation,” Mr Cohen said.
“We want to hear people’s views on the issues raised by landlords and tenants, as they exercise their rights and responsibilities during the various stages of a tenancy.
“Make a submission by sharing your story, participating in polls, blogs and discussions through the Fairer Safer Housing website."
Feedback on these issues will help identify how the needs and preferences of Victorian landlords and tenants have changed since the legislation came into effect almost 20 years ago, and indicate areas that should be a priority for reform.
Three more issues papers are scheduled for release in the first half of 2016.
“We want to hear from renters and rental property owners from all corners of the state,” Mr Cohen said.
Details about how you can have your say, including information for culturally and linguistically diverse communities, are available on the <a href="https://fairersaferhousing.vic.gov.au/renting" target="_blank">Fairer Safer Housing website</a>.
Issues for public consultation include:
<ul>
<li>the tenancy application process and appropriate screening practices</li>
<li>information that should be disclosed to a tenant at the start of a tenancy</li>
<li>digital technology and the form and service of documents and notices</li>
<li>the process to be followed when a landlord or tenant breaches a duty under the Act</li>
<li>enforcing additional terms in the tenancy agreement, including rules about pets</li>
<li>balancing the right of tenants to quiet enjoyment and the right of landlords to enter premises, particularly where the premises are being sold</li>
<li>balancing the interests of landlords and tenants in respect of sub-letting and lease assignments</li>
<li>reasons a landlord or tenant can terminate a lease, and rules around compensation for lease breaking</li>
<li>what arrangements should apply to goods left behind by a tenant at the end of a tenancy</li>
<li>increasing protections for tenants experiencing family violence</li>
<li>the conduct of agents acting on behalf of landlords.</li>
</ul>
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Property 101: Victoria reviews rules about pets and tenancy

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When a tenant goes bust, there’s a big impact on the landlord. 
The insolvency practitioner appointed to the tenant has rights and powers under the Corporations Act 2001 (Cth) while the landlord has rights and powers under the lease with the tenant.
Here’s a run-down of who can do what.
Start at the beginning and look at the lease 
The lease is a binding contract between the tenant and landlord, so it’s the first thing to read when the tenant becomes insolvent.
For example, the lease might say that any insolvency event of the tenant constitutes such a breach that the lease is immediately terminated.  Otherwise, the insolvency event may be a breach and the lease stays on-foot at the option of the landlord.
In any event, the appointment of an insolvency practitioner to the tenant doesn’t waive the tenant’s liability to any rent or other amounts outstanding under the lease.
What happens when a receiver is appointed to the tenant? 
A company typically goes into receivership when a secured creditor appoints a receiver to those assets of the company over which the creditor has security. The receiver’s role is to collect and sell enough of the company’s charged assets to pay back the debt owed by the company to the secured creditor.
If a receiver is appointed to a tenant company:
• Within the first 7 days after the appointment, the receiver can give the landlord notice that the receiver doesn’t intend to exercise any rights in relation to the landlord’s property, which means the receiver isn’t personally liable for rent or other amounts payable under the lease during their occupation of the landlord’s premises.  
• If no notice is given, the receiver is personally liable for rent and other amounts payable under the lease from 7 days after the receiver’s appointment until:  
the receiver retires from their appointment; or the company ceases to occupy the landlord’s premises.  
• The receivership doesn’t affect the rights of creditors, which means the landlord can move to take possession of the premises, or enforce the terms of the lease, or commence legal action against the tenant (eg to recover rent arrears).  
• The company does remain liable for rent and other amounts owing under the lease before the receiver’s appointment.  
• Personal guarantees under the lease can be enforced by the landlord during the receivership.
What happens when an administrator is appointed to the tenant? 
An administrator is usually appointed by a company’s directors after they decide the company is insolvent or likely to become insolvent.  The effect of the appointment of an administrator is to provide the company with “breathing space” while the company’s future is contemplated and resolved.
If an administrator is appointed to a tenant company:
• Within the first 5 days after the appointment, the administrator can give the landlord notice that the administrator doesn’t intend to exercise any rights in relation to the landlord’s property, which means the administrator isn’t personally liable for rent or other amounts payable under the lease during their occupation of the landlord’s premises.  
• A notice will cease to have effect if: the administrator revokes the notice in writing; or the company exercises, or purports to exercise rights in relation to the landlord’s property (eg continues to trade from the premises).  
• If no notice is given, the administrator is personally liable for rent or other amounts payable under the lease from 5 days after the administrator’s appointment for so long as: the company continues to use, occupy or be in possession of the premises; and the administration continues.  
• The administration does affect the rights of creditors, which means the landlord can’t move to take possession of the premises, or enforce the terms of the lease, or commence legal action against the tenant (eg to recover rent arrears) without: the administrator’s consent; or leave of a court.  
• The company does remain liable for rent and other amounts owing under the lease before the administrator’s appointment.  
• Personal guarantees under the lease can’t be enforced by the landlord during the administration.
What happens when a liquidator is appointed to the tenant? 
A liquidation brings a complete end to the company. It involves a liquidator realising (selling) the company’s assets, cessation or sale of its operations, distributing the proceeds of realisation among its creditors and distributing any surplus among its shareholders.
If a liquidator is appointed to a tenant company: 
• At any time the liquidator can disclaim the lease and vacate the landlord's premises, which means: the liquidator isn’t personally liable for rent or other amounts payable under the lease and nor is the company during the liquidator’s occupation of the premises; and the landlord can, if permitted by the lease, re-enter and take possession of the premises.  
• If the lease isn’t disclaimed and the liquidator stays in the premises, the liquidator still isn’t personally liable for rent or other amounts payable under the lease although these amounts will be treated as expenses incurred in the liquidation (and therefore paid out of the proceeds of sale of the company’s assets).  
• If the lease hasn’t been disclaimed and the liquidator hasn’t otherwise advised their intentions, the landlord can issue a notice asking the liquidator to confirm their position about the lease and the liquidator has 28 days to respond.  
• The liquidation does affect the rights of creditors, which means the landlord can’t continue or commence legal action against the tenant (eg to recover rent arrears) without leave of a court.  
• The company does remain liable for rent and other amounts owing under the lease before the liquidator’s appointment.  
• Personal guarantees under the lease can be enforced by the landlord during the liquidation. 
What does it all actually mean? 
Our experience of what actually happens and our tips for landlords about how to deal with the situation are these: 
• The insolvency practitioner appointed to the tenant contacts the landlord as soon as possible to say they’ve been appointed and “let’s talk”.  
• The landlord tells the insolvency practitioner the debt currently owing by the tenant under the lease for rent and other amounts, and provides the practitioner with a copy of the lease and proof of the debt. 
• It’s in the landlord’s best interests to work with rather than against the insolvency practitioner to deal with the tenant’s problems, which might include:  
helping the practitioner find a buyer for the tenant’s business in whole or part, and that buyer taking a new lease in the premises;  
if the lease is terminated and disclaimed by the insolvency practitioner, the landlord alone finding a new tenant to go into the premises as quickly as possible; or  
the landlord buying the tenant’s business or assets (eg fit out) from the practitioner and leaving the assets in-situ for a new tenant.  
• Subject to the terms of the lease, the landlord should call upon the tenant’s bank guarantee and take advice on whether any personal guarantee can be pursued as a means to recover the pre-external administration (or any other) debt owing by the tenant under the lease as soon as possible. 
• The landlord has rights as a creditor in the external administration, so should stay engaged and attend creditor meetings with the insolvency practitioner.  
• The landlord should be prepared to have some amount of rent forever unpaid by the insolvent tenant because an insolvent company’s debts are greater than its assets, and there’s only ever a finite amount of money to be split between all the tenant’s creditors.  
This article was produced by <a href="https://www.meyervandenberg.com.au" target="_blank">Meyer Vandenberg lawyers</a>.
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jonathanchancellor-7SQnKwU6yx

Liquidators versus landlords: who wins?

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Despite the popularity of Airbnb, a recent survey reveals that more than 40% of Sydney’s inner-city residents oppose short term renting as a full-time investment and believe strata should be able to ban short-term rentals.
The survey of 1000 residents was commissioned by the City of Sydney Council.
However, the majority of residents supported short-term letting on home sharing platforms such as Airbnb and Stayz if the host stayed in the property or was away on holidays, according to The Australian Financial Review.
But a huge 42% were against short-term letting if it was used as a full-time investment. Only 35% said they are in favour of short-term letting as a full time investment.
The report said 45% only support short-term letting for a limited number of days a year.
Earlier this year, Sydney was ranked the <a href="https://www.urban.com.au/expert-insights/71600-sydney-perth-top-10-worldwide-to-make-an-income-using-services-like-airbnb" target="_blank">second highest city to recoup investment</a> on a home using a peer to peer rental service like Homeaway or Airbnb with an expected yearly return of 11.96% by peer-to-peer motorhome rental platform SHAREaCAMPER.
The new survey’s finding comes as cities get increasingly tough on Airbnb as a full-time investment tool. Both London and Paris each have 90 day and 120-day limits on entire home rentals on Airbnb.
The survey has sparked off a debate.
Airbnb's head of public policy ANZ Brent Thomas said "one small survey in one corner of inner-city Sydney is hardly a representative or robust basis for policy making right across NSW" and the majority of Airbnb hosts are people who rent out their home, rather than property investors.
Sydney is one of Airbnb's top ten cities globally, with over 22,000 listings.
"The vast majority of our hosts in Australia share their primary residence - the home they live in - for an average of just 30 nights per year," Thomas said.
Airbnb is running an "Airbnb Citizen" campaign asking hosts to fight for "fair home sharing rules" in NSW.
Stayz advisor Richard Colbeck said the short-term letting platform supports a "reasonable framework" to address "genuine amenity concerns" in cities, particular strata blocks.
But Stephen Goddard of Owners Corporation Network, which represents strata, said the survey results show there should be "sensible regulation" of short-term letting.
"We don't want to ban short-term lets, we just want to give apartment owners a say on whether or not it occurs in their respective buildings," Goddard said.
Carol Giuseppi of Tourism Accommodation Australia, which represents the hotels industry, said the survey results show residents support "sensible caps" on the number of nights an entire property could be short term-let.
An NSW parliamentary inquiry had previously recommended Airbnb operators should only be subject to "light regulation".
But in an options paper released in July, the NSW government said it was considering a range of options, from industry self-regulation to giving strata the power to put restrict or prohibit apartment short term letting.
It is also considering putting a restriction on the total days per year that a place can be used for short-term letting. The consultation is ongoing and submissions are due close on October 31.
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Many Sydney inner city residents against Airbnb letting as 'full-time investment': Survey

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<div>The Victorian Parliament has passed the Residential Tenancies Amendment Bill 2018, which includes more than 130 reforms providing increased protections for renters, while ensuring rental housing providers can still effectively manage their properties.</div>
<div> </div>
<div>When the new laws come into effect, renters will be able to: </div>
<ul>
<li>have a pet with the written consent of their residential rental provider. Consent can only be reasonably refused through a Victorian Civil and Administrative Tribunal (VCAT) order </li>
<li>make certain modifications without first obtaining the residential rental provider's consent, such as installing picture hooks, and furniture anchors to stop televisions and other heavy items falling on children.</li>
</ul>
<div> Other key changes will: </div>
<ul>
<li>require every rental home to meet basic minimum standards, to be set out in regulations, such as providing functioning stoves, heating and toilets</li>
<li>require residential rental providers to undertake mandatory safety maintenance for gas, electricity, smoke alarms and pool fences</li>
<li>implement the recommendations of the Royal Commission into Family Violence that relate to rental housing. These include: </li>
</ul>
<ul>
<li>allowing victims to end a lease in family violence situations without first needing a final intervention order, and</li>
<li>ensuring victims are not held unfairly liable for debts created by perpetrators of the violence  </li>
</ul>
<ul>
<li>allow caravan and residential park residents to seek compensation if their park closes</li>
<li>clarify rights of entry and photography when a landlord needs to sell a rental property, and</li>
<li>streamline the rules dealing with goods left behind at the end of a tenancy. </li>
</ul>
<div>Work will continue next year on complementary reforms to provide easily accessible and informal dispute resolution through VCAT. </div>
<div> </div>
<div>The reforms respond to extensive community feedback during the Victorian Government’s Fairer Safer Housing consultation to review the Residential Tenancies Act 1997. More than 4,800 public comments were received from a wide range of people and organisations. </div>
<div> </div>
<div>The changes will come into force progressively, and further consultation will be undertaken where necessary to develop guidelines around the new laws. We will provide updates on the new laws as implementation progresses.</div>
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