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Residential Tenancy (Rental Market Reform) Amendment Bill 2021

Vica Bayley MP

Vica Bayley MP  -  Wednesday, 18 October 2023

Tags: Tenant Rights, Housing Crisis, Legislation

Mr BAYLEY (Clark) - Mr Speaker, I am pleased to resume debate on the bill. Straight off the bat I thank the Independent member for Clark, Ms Johnston, for indicating support for the bill and acknowledge the efforts of my predecessor, Cassy O'Connor, for developing and presenting this bill to the House in 2022.

For the purposes of refreshing the memories of members, I will provide a recap on what this bill does. As this has already been canvassed by Ms O'Connor in her second reading contribution, this will be brief and non-exhaustive.

The bill makes four reforms to the Residential Tenancy Act 1997. The bill replaces the current unworkable rent control provisions in the principle act with rent control provisions similar to the model introduced by a Labor government and now in use in the Australian Capital Territory.

Under existing provisions, a tenant can be evicted solely on the basis that their lease has expired, commonly known as 'no cause evictions'. This provides a clear and obvious disincentive for tenants to assert their rights as once the lease expires the tenant can easily be removed, with no recourse available to them. Our bill removes this ground for eviction.

We also introduced provisions that reflect the recent Victorian standards for energy efficiency. These standards apply to the replacement of any appliance, fitting or fixture that uses or supplies water, electricity or gas.

Finally, our bill requires an owner to acquire permission from the Tenancy Commissioner to refuse to allow a pet to be kept on the premises. This is also similar to provisions in the ACT legislation. I will quickly step through each of these provisions.

Rent Controls: as we are all aware, rents are currently a significant cause of stress for families and unmanageable rent increases make a contribution towards forcing some people into homelessness. As it currently stands, a tenant may apply to the commissioner for an order that a rent increase is unreasonable. Our proposed new framework has similar provisions so it is not altogether a new approach. The commissioner still has a role in determining an outcome when there is a conflict over a rent increase.

The recent Muddyman v Nest Property decision of the Magistrates Court of Tasmania makes it clear that under the current system, the burden is on the tenant to establish that a rent control is unreasonable. The court noted that while neither the act nor the minor civil regulations expressly allocate any burden of proof, legal or evidential, to the tenant, it was common ground that it is for the tenant to establish that the rent increase is excessive. Again, the burden of proof is on the tenant.

The model proposed by this bill provides a fairer and more considered allocation of the burden of proof, with the commissioner retaining a determining role. The bill sets a rent increase limit of CPI plus 10 per cent of CPI. If the rent increase is below CPI plus the 10 per cent limit then the burden of proof is on the tenant to prove that the increase is unreasonable. If the rent increase is above this limit then the burden of proof is on the owner. This offers a fair and balanced opportunity for rental increases but levels the playing field when it comes to conflict over a proposed increase.

One of the current issues with the principle act is highlighted by the Muddyman v Nest Property decision which notes, and I quote:

Section 23 (1) makes it clear that the issue is not whether the rent increase is unreasonable.

Our bill, consistent with provisions in the ACT act, allows for consideration of the amount of rent payable before the proposed rent increase. This will in effect allow the question of the reasonableness of the rent after the proposed rent increase to be considered.

The bill also allows for the commissioner on application from a tenant to issue or refuse to issue a rent reduction order. A rent reduction order must be issued if the tenant's use or enjoyment of the premises has diminished significantly as a result of:

(1) the loss or diminished utility of a feature of the property service supplied by the owner;

(2) the loss of the use of all or part of the premises; or

(3) interference with the tenant's quiet enjoyment of the premises or the tenant's ability to use the premises caused by the owner.

This order can also be appealed for a fresh decision.

Following national discussions about reforms in particular, some commentators have pointed to the ACT's rent control measures as evidence of failure of these policies. These commentators often make assertions and anecdotal observations that do not draw on any actual data or evidence. In Ms O'Connor's second reading she referred to claims from the CEO of the Real Estate Institute of Tasmania that similar changes in residential tenancy legislation in Victoria and the ACT had 'seen investors not only walk but run from their investments in those areas'. Ms O'Connor outlined that, in fact, residential property investment increased by 50 per cent in Victoria in this period and that the proportion and gross number of those in the private rental market has increased in the ACT. It is typical of the property lobby to make prophetic doomsday claims that are not only without evidence but are often outright contradicted by the evidence.

Nationally, this type of rhetoric has sadly continued with vague claims of investors fleeing the ACT and rents increasing. The reality is that rents in the ACT experienced a 1.9 per cent decrease in the year to June, according to CoreLogic data. The proportion of properties available for rent since rental reforms commenced a decade ago have also increased from 26 per cent to 31 per cent, and the total volume has increased by 50 per cent.

We are in a cost of-living crisis and for many families rent is an ever-increasing component of the household budget. According to the Census data, the proportion of renting households spending more than 30 per cent of household income on rent has increased from 10.2 per cent in 2016 to 34.2 per cent in 2021. Tasmania has gone from being below the national average on this indicator to above the national average.

Incidentally, the proportion of Tasmanian owners with mortgages paying over 30 per cent of household income on mortgage repayments is 10.1 per cent, which is below the national average of 14.5 per cent.

Something needs to be done to protect renters, to defend thousands of families against the erosion, often rapid and extreme, of their overall budget expended on delivering what is a basic human right - the right to a home. Rent controls are working in other parts of the country and around the world. They are offering relief to renters and levelling a playing field too long tipped in favour of those already in a privileged position - those with the luxury of owning their own home and having one or more spare to put on the rental market.

Before moving on to the next initiative in this bill, I note the strong desire and policy position of the Greens and those advocating for the rights of renters to couple rent controls with action to curb the not so-slow systemic loss of rental properties to short stay accommodation. This phenomenon is impacting on supply, stripping both long term rental properties and potential first home purchases for young people and families from the market. It is a phenomenon that must be addressed. The Greens will continue to raise it and advocate for action.

To no-cause evictions: no-cause or no grounds evictions occur when a tenant is evicted without genuine grounds being provided. In Tasmania this is when an eviction occurs solely on the basis of lease expiration despite the fact that there has been no lease violation and the property has not been put to alternative use.

There are misunderstandings in some quarters of the community about what an end to no cause evictions means. This does not outright prohibit an eviction based on lease expiration. Evictions would still be allowed on lease expiration if the property is being put to another use or the lease has been violated. However, if the landlord wishes to continue to use the property for rental purposes and the tenant has not violated the lease, the tenant would not be able to be evicted. It provides protections for tenants. This is necessary because the current arrangements easily allow for retaliatory evictions if a tenant lawfully exercises their rights - for example, by asking for maintenance for which the landlord is responsible or for challenging a rent increase, they can easily be evicted at end of lease. The effect of this is chilling and many tenants do not pursue their rights.

The recent national Cabinet decision on a better deal for renters has two relevant agreements:

(1) develop a nationally consistent policy to implement a requirement for genuinely reasonable grounds for eviction, having consideration of the current actions of some jurisdictions.

(2) ensure provisions to allow appeals against retaliatory eviction notices are fit for purpose.

I note with some concern that the former attorney-general, in response to a Dorothy Dixer on 7 September this year, claimed:

Tasmania's Residential Tenancy Act 1997 already provides some robust protection for tenants, including in relation to no cause evictions and rent increases.

This is false. I can only read this as an attempt to squib on the agreement. Tasmania does not have robust protections for no cause evictions or rent increases. Ending no cause evictions is a critical reform. No matter what other reforms may be introduced and whatever existing rights are, no cause evictions provide a chilling effect on tenants enforcing their rights or outright punish them for doing so. The status quo is unfair, unequal and untenable.

The third is reasonable grounds for refusing pets. I know this is a component of this bill that does have significant support within this House. The bill introduces a new Part 3C into the act. These provisions effectively require an owner to acquire permission from the Tenancy Commissioner to refuse to allow a pet to be kept on the premises. This can occur if the commissioner is satisfied that one or more conditions apply. They are: that the premises are unsuitable to keep the pet; or keeping the pet on the premises would result in unreasonable damage to the premises; or keeping the pet on the premises would be an unacceptable risk to public health and safety; or the owner would suffer significant hardship; or keeping the pet on the premises would be contrary to a law in the state. The commissioner may also allow for conditions to be placed on the pet being kept on the premises. Proposed new section 36Q makes it clear that the tenant is responsible for any repairs or addition maintenance to the premises required as a consequence of keeping a pet on the premises.

We can all relate to the value of a pet and the evidence demonstrates that a well-kept and properly loved pet delivers a myriad of benefits to us as humans for wellbeing, companionship and sense of value. Facilitating the capacity for tenants to keep a pet in appropriate circumstances is a positive reform that can improve the lives of tenants.

Lastly, energy efficiency standards. The new section 360A proposed by the bill adopts the recent Victorian standards for energy efficiency. These standards apply to the replacement of any appliance, fitting or fixture that uses or supplies water, electricity or gas. These standards are reasonable and, in most cases, a three star rating under the WELS system for water appliances and two star rating under the ASNZS standards for electrical appliances for heating. There also exist a range of exemptions, including if circumstances make costs prohibitive. I trust the House can agree that anything we do to improve energy efficiency is a good thing. Not only can this help with the cost of-living pressures facing so many tenants; it saves resources and increases sustainability in an increasingly out of control world.

Tenants in Tasmania, as in many places across the country, are doing it tough. The latest Anglicare Rental Affordability Snapshot found: •

rent in Tasmania is rising up to 10 times faster than income support payments •

eight out of 14 low-income household types can afford less than 0.5 per cent of the properties advertised. •

an increasing number of Tasmanian children are growing up in homelessness. •

there was a 45 per cent growth in the number of homeless Tasmanians between 2016 and 2021. •

no properties advertised in the south were affordable for a range of cohorts.

These statistics are not sustainable. If we are to be a state that looks after our people, we must reform tenancy arrangements. If we are to attract the people that we need to build the state we aspire to be we must make renting more affordable, more secure, more sustainable and more pet friendly.

I thank the stakeholders working to advocate for the rights for tenants and their input into the policy that frames and informs this bill. I also acknowledge, on reading the Hansard of the commencement date on this bill that the Government has flagged a number of reform initiatives in this space and what the former minister, Ms Archer, referred to as 'further improvements to the residential tenancy legislation'. Perhaps we will hear today's minister make the same claim but I point out that those comments from Ms Archer were made well over a year ago and we have heard precious little since.

Ms O'Connor tabled this bill in late August 2022 and the debate commenced. That was when Ms Archer made those statements. Meanwhile, the crisis worsens.

To conclude, I will read into Hansard the opening paragraphs from the August 2023 TasCOSS submission to the federal Senate Standing Committee on Consumer Affairs, an inquiry into the worsening rental crisis in Australia. TasCOSS titled its submission 'The worsening rental crisis in Australia'. A full year has passed between the commitments made by the former attorney-general to deliver further improvements to the act, August 2022, and the publication of this report in August 2023.

That is a year of anxiety, of stress, of insecurity and unaffordability for tenants. To the submission, TasCOSS wrote:

The right to secure, safe and affordable shelter is a basic human right. However, this right is being denied to more and more Tasmanians, particularly, in the context of the twin crises of unaffordable housing and the skyrocketing cost of living. Greater Hobart continues to be Australia's least affordable metropolitan area with the highest proportion of households' income spent on rent. Almost 60 per cent for lower income households. Although affordability is slightly better outside of Hobart, the portion of income needed to service rents across the rest of Tasmania is rising.

Housing is a human right. We must embrace a fairer, more affordable approach to the tenant/landlord relationship. We must look after a cohort of our community that is increasingly doing it tough in an environment of escalating costs of living and lax protections for the interests. I commend the bill to the House.

Mr BAYLEY (Clark) - Madam Deputy Speaker, I seek leave of the House to reply to the debate given the mover is no longer a member of the House and I have taken carriage of the bill.

Leave granted.

Mr BAYLEY (Clark) - Thank you, Madam Deputy Speaker and thank you to the House for this opportunity.

I will be very brief, because I have to be. I express my disappointment that this bill is obviously going to go down. I will not go into detail to Ms Butler's contribution as Dr Woodruff has done that, but noting your strong commitment to a review, we will be watching and participating very closely.

As to the minister's contribution, I will grant you the courtesy of acknowledging you are only two weeks into the job, but obviously we are very disappointed. You say you are deeply concerned. You say you philosophically understand. Renters do not need philosophical understanding. They need action. They need it today. They need action to relieve the pressure on their budgets. You were proud of taking action when it came to COVID-19. What is wrong with today? For renters who are under stress, the situation is similar. A lot of people were under financial stress during COVID-19 and you took action and you are now proud of it. Why not do something today to relieve the pressure for renters and make us all proud and so that people can have the human the rights that they deserve and the stress relieved in relation to the rent that they pay.

I am really concerned with your presentation because you went to issues that we simply were not proposing. We are not proposing a cap on rents. We are proposing controls on rent and that is a very different thing. Our controls, I believe and we have argued, are simple and fair. I do not understand how you can say rent controls are bad for renters. The Tenants' Union is calling for rent controls. The Tasmanian Council of Social Service is calling for rent controls. Here it is:

TasCOSS strongly recommends the introduction of measures to provide greater protection in relation to rent increases. These measures could increase caps on rent, could include caps on rent increases such as in place in the Australian Capital Territory where rent increases 10 per cent above CPI. (TBC)

I do not understand how you can be claiming that this is bad for renters. It is simple and it is abundantly clear that renters are stressed. Renters are losing their homes and they need us collectively who are representing them to stand up and take strong action to protect their interest.