Rabu, 10 Februari 2010

NSW State Opposition comments on draft Bill

After consulting with various stakeholders (including the Tenants' Union), the Shadow Minister for Fair Trading, Greg Aplin, has commented on the draft Residential Tenancies Bill.

The comment is interesting not because of what it says about the draft Bill, nor because of what it says about the Opposition's position on tenancy law reform, but rather for what it says about the position of landlords and agents in New South Wales.

Mr Aplin says:

What I am hearing is this:
  1. Tenants could be offered short-term, probationary leases of 3 months duration.
  2. At the end of a fixed term tenancy the tenant might have to sign up immediately for a new fixed term rather than simply hold over under the previous agreement.
  3. In order to secure income to pay their mortgages, landlords might take out insurance for the new risks proposed in the draft bill, and then effectively pass the premium cost onto the tenant.
  4. New clauses will appear in tenancy agreements giving blanket ‘disclosures’ which negate the real purpose of a timely and helpful disclosure.
  5. Greater reliance will be placed on tenancy databases and more detailed inquiries about a prospective tenant’s renting history and commitment to honouring agreements for housing, at the workplace and more.
  6. Leases might only have a single tenant’s name on them.
  7. More tenants will find themselves in the Tribunal more often, facing unnecessary stress and uncertainty over their home. The draft bill has over 60 sections which send the parties to the Tribunal for a decision.
The important thing is that none of these things is mandated by the draft Bill. Not a single one. Every one of them is a hypothetical reaction by agents and landlords.

And by 'hypothetical reaction', I mean 'threat'.

What Mr Aplin is hearing is the sound of the agents and landlords throwing their weight around. The REI has been at this for months, with wild talk about landlords fleeing the State and those staying put jacking up rents by 20 per cent.

The further threats reported by Mr Aplin are just more proof of the asymmetry of the landlord-tenant relationship – as if more proof were needed. We all know this: before a tenancy begins, it is always the prospective tenant who has to prove their credentials (provide references, hand over payslips, get run through a database, etc) to the landlord, never the other way round. And during a tenancy, a tenant who is unhappy with the quality of service they are receiving cannot take their business elsewhere without incurring considerable financial and emotional costs; landlords, on the other hand, feel little difficulty in getting satisfaction by enforcing the tenancy contract, including through termination proceedings.

If it were not for tenancy legislation, landlords and agents would dictate terms to tenants. The threats disclosed by the Shadow Minister show that tenants' interests need to be protected in strong tenancy legislation, and that if the draft Bill is to be changed, it should be to improve its protections of tenants against the abuses of power being threatened by agents and landlords.