Minggu, 31 Mei 2009

Better protection for tenants when landlords default on mortgages

Some much-welcome news: the NSW State Government has announced that it will introduce legislation this week to better protect tenants when landlords default on their mortgages and the mortgagee (usually a bank) takes possession of the premises – and evicts the tenant.

(Well done!)

We don't yet have the detail of the legislation, but the Minister for Fair Trading, Virginia Judge, says that it will provide:

    • Immediate introduction of a 30 day notice to vacate once a mortgagee is entitled to possession of rented premises
    • Permit a mortgagee who becomes entitled to possession of a premises to authorise the release of the tenant’s rental bond
    • Relief for relocation expenses, with tenants who receive an eviction notice to withhold all future rent and / or recoup advance payments – i.e. a rent holiday, or compensation from the mortgagee.

    All of which represents a massive improvement on the current law, under which tenants have been evicted by mortgagees with little or no notice, and no real prospect of compensation. (Click here to download a briefing paper by the Tenants' Union on the problems with the current law.)

    The TU has previously asked the Government to deal with the mortgagee eviction problem as a matter of urgency, so we are very pleased that action is being taken now.

    The TU and the Tenants Advice and Advocacy Services saw a wave of these cases a couple of years ago, when interest rates were rising. We expect to see another wave in the coming months, as unemployment rises. This time, it looks like the law will better protect tenants.

    Well done, Minister Judge.