Rabu, 05 Agustus 2009

The Landlord and Tenant (Amendment) Act 1948

Submissions have just closed on the proposed Landlord and Tenant Regulation 2009. It sounds grand, but neither the Regulation nor its parent, the Landlord and Tenant (Amendment) Act 1948, will ever touch the very great majority of landlords or tenants in New South Wales.

The 1948 Act is the last remaining piece of rent control legislation in the State. Most people are aware of 'rent control' only through American TV shows, and over the past few years of painfully high rents I received numerous calls for journalists and others wondering if we too should implement such a system. In fact, New South Wales has had rent control, on and off, since 1912. The 1948 Act still stands, but over the years it has been amended to progressively limit its application, so that only a relative few long-standing 'protected tenancies' (no-one knows how many, maybe a couple of hundred) are still subject to its provisions. No new protected tenancies have been created since 1986.

The 1948 Act is based on national rent and price controls implemented in the Second World War, and for 'controlled premises' (strictly speaking, the Act applies to premises, not persons or tenancies), rents are limited to 'fair rents', as determined by a Fair Rents Board, which may be considerably less than the market rent. (It might be noted that this is much tougher on landlords than the rent increase reforms proposed by the Tenants' Union in relation to the Residential Tenancies Act 1987.)

The corollary of rent control is, so to speak, eviction control, which is another purpose of the Act (they go together: you can't keep rents down if landlords can readily replace a tenant with someone who'll pay more, and you can't keep tenants in place if landlords can increase the rent prohibitively). Protected tenants can be evicted only on certain prescribed grounds (again, this is generally much more restrictive on landlords than the reasonable grounds for termination proposed by the TU). The 1948 Act also provides additional protections for certain classes of protected tenants ('protected persons' – mostly persons with a connection to the armed forces, reflecting the wartime origins of the Act), who are even more difficult to dislodge than other protected tenants.

Landlords, of course, hate the 1948 Act. (In fact, the policy behind the Act is not so much pro-tenant as pro-owner-occupier: it was one factor – along with war service home loans, subsidies to building societies and public housing sales – for the strong increase in the rate of owner-occupation through the 1950s and 1960s.) And it's not entirely a picnic for tenants either. It's very difficult for protected tenants to get repairs done, and many landlords deliberately let their controlled properties go to ruin in order to establish one of the grounds for eviction (if the tenant has not moved out along the way). Protected tenants also often have to put up with landlords' attempts to oust them from the protection of the Act by trickery (eg getting the tenant to give possession back to the landlord on the pretext of having repairs done) or outright harassment (eg cutting off the power).

And anyone who cherishes clarity of legal drafting is going to have trouble with the 1948 Act too. Have a read of it, if you dare – it can permanently change you. The litigious landlord and outlaw lawyer Peter Clyne, having 'worked with it, sneered at it, ranted about it and begged a succession of governments to give it the coup de grace', confessed to having grown to like 'this exciting and damnable statute':

Like the dark lady of one's dreams, it is a stimulating statute, full of warm little corners of dark mystery where no amount of illumination will ever spread light – pulsating with mini-wars, an intellectual challenge to the confident, and a source of comfort to the underconfident. They can sharpen their teeth on the orgies of obscurity with which the courts, attempting to interpret my friend, occasionally enlighten us. After all, if you can understand the High Court's decision in Allen v Belmore Property Co Pty Ltd (114 CLR 454), you have passed your baptism of fire, and should be able to understand anything.

We don't hold it out as a model for contemporary tenancy law, but the TU likes having the 1948 Act on the books too, and for a proper reason. The persons to whom it applies made their housing arrangements on the basis of the Act long ago. They should not be disturbed now.

Anyway, back to the proposed Regulation. It's basically an update of the previous Regulation, so the TU supports it... except in one respect. The proposed Regulation omits a definition from the previous Regulations, and the effect of the omission is to remove from the status of 'protected persons' (ie those with additional protections against eviction) veterans of the Malayan Emergency of the 1950s, and their dependents. The TU, therefore, submitted that the definition should be retained, and any protected tenants who are veterans of the Malayan Emergency, or who are the dependents of Malayan Emergency veterans, should keep their status as 'protected persons' under the Act.

(As I said, the Act has a way of getting to you.)