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Retail Leases Bill 2022

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Thursday, 8 September 2022

Tags: Legislation

Dr WOODRUFF (Franklin) - Mr Speaker, the Greens have a number of comments to make about this bill. In the first place, we have no truck with the bill -

Ms Archer - You have what, sorry?

Dr WOODRUFF - Actually, I have that the wrong way around. We have no problems with a bill that sets out as its primary objective, in the second reading speech, to facilitate certainty and fairness of retail premises leasing arrangements between landlords and tenants. That is obviously a good aim. We looked at this bill through that lens.

In the second reading speech the minister talks particularly about protecting businesses during COVID 19, coming out of COVID 19, the current regulation being outdated. In detail, we do not have any concern with what is being proposed in this bill.

I have listened closely to the contribution of Labor, to Ms Butler. She has raised a number of concerns she says have come from the Law Society and also from the Property Council, I understand. We have not been approached by those organisations so I do not know the detail of those concerns. I heard the minister saying she had had a conversation yesterday. Ms Butler has raised some very serious concerns. I am going to listen to the minister's response and consider whether they have been properly addressed. Also, we will go into Committee.

So, I guess what I am saying at this moment is as we have understood the bill and its contents to date, we agree with the approach the Government has taken and I would like to understand the details. We will go into Committee, listen and be involved in those conversations.

I want to talk about the Green lens I used when I was reading this second reading speech. What stood out to me starkly was this Government's priorities. This minister is well known for being a hard worker and there is no doubt that this minister ploughs through legislation in her portfolio. The comments are not about this bill or your work, minister; it is about the priorities of this Government.

What we have here is that the priorities and resources of this Government, and I assume these conversations have been had in Cabinet, are about attending to the fairness and effectiveness of arrangements between landlords and retail tenants. We are concerned about the complete failure to talk about the fairness, effectiveness and reasonableness of the current arrangements between residential landlords and residential tenants.

What we have in Tasmania is an extreme housing crisis, the most extreme housing crisis we have in current records. I do not have information on what happened in the Depression. I am sure it was horrifying. We are in a situation that is horrifying for the people who are experiencing the increases in rents.

From the four years from 2016 to 2020, there was a 34 per cent increase in the weighted median rent in Tasmania. In the two years after that, from 2021 to 2022, there was an 18 per cent increase on top of that. Together, that means that we have a 58 per cent increase in rents, the median weighted rent in Tasmania in the last six years.

This is horrifying for people who are renting properties, horrifying for people who cannot get into properties, and frightening for anybody who needs to move from a property. We have a state of extreme rental insecurity. In that space, we have a Liberal Government that has repeatedly refused to do the things needed to give tenants security in this highly insecure housing market situation.

There are obvious things other jurisdictions are doing that Tasmania must be doing. We have a bill still in the second reading stage. Mr Speaker, I am not going to go into the contents of the bill. That would be pre-empting an order of the day. But I am going to talk about the context because that is the reason we have that bill there, in the hope that the Government will come on board and understand that we must do something about this. We have left the debate open on purpose so we can have the conversation, so the Government can put the resources and energy into the Housing portfolio that Ms Archer has put into retail leases to make them effective and fair. That needs to be done for tenants in residential properties.

We have a residential tenancy act that is utterly unworkable, it is completely unfair in the rent control provisions and there are no rent control measures similar to other jurisdictions, which have brought into place fair and reasonable measures.

We have provisions in the Residential Tenancy Act that might mean a tenant can be evicted solely on the basis that their lease has expired, which is commonly known as no cause evictions. We have a Retail Lease Act that would not allow something like that to happen; it is utterly outrageous for people who are renting residential properties. The property class thinks it is outrageous to be treated that way but for people who are not in the property class, who are the receivers, the beggars, dependent on housing, they do not get to have a say at the moment.

Tenants cannot assert their rights because functionally they have none. Any rights they might have had or do have in legislation, they do not want to speak up because there is the opportunity for no cause evictions. How could you speak up when you are in a property market closed to the majority of Tasmanians who have lost a house. If they lose their rental accommodation, there is almost no opportunity to get another house. It is so tight that people cannot speak up.

We know that there are no standards for energy efficiency. It is a huge problem for people living in properties where there are no standards for the sorts of fittings and fixtures to make them cheap and affordable to live in, to drive down the cost of living for people who are renting properties. There is no possibility for a person to be guaranteed that they can have their pet living in their rental property. They are not necessarily able to do that. At the moment, the Residential Tenancy Commissioner can refuse to allow a pet to be kept on the premises. We think that should be reversed. The onus should be that pets are allowed on a premises, and that there ought to be some conditions applied to how a pet can be kept on a premises.

Mr Deputy Speaker, we have a total lack of fairness in the residential rent setting arena. The mechanism that governs rent increases, the determination of rent increases, is based on unfairness, because it pegs it to the surrounding rental market. The current provisions in the Residential Tenancies Act mean that rents can be increased if a written residential tenancy agreement allows for an increase, or if there is no written residential tenancy agreement.

As it stands, under section 23 of that act, a tenant can apply to the commissioner for an order that a rent increase is unreasonable, but there was a recent case in the Magistrates Court, Muddyman v Nest Property, where it was clear that the burden is on the tenant to establish that the rent increase is unreasonable. The court said in that determination:

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 the rent increase is excessive.

In the retail lease setting, all the onus is on the tenant to determine that a rent increase was excessive. Whether it is unreasonable is not the issue. The current act does not consider the amount of rent being paid before the proposed rent increase. It does not consider the reasonableness of the rent after the proposed rent increase.

The current provisions in that act require the commissioner only to consider the general level of rents for comparable residential properties in the locality or a similar locality. Functionally, what that means is that there is no brake on the exploding prices in the rental market. This approach ratchets up the price of rents for everybody, because everything is pegged. A reasonable increase is considered to be relative to the surrounding market.

The fact that the whole market is totally dysfunctional is predicated on causing misery and harm and suffering in people's lives - when governments could intervene and have a number of mechanisms to slow it down. There is not a simple, single-pill solution for the housing crisis, but there are things that can be done to slow it down.

This essentially is what this bill does. It slows down - well, it seeks to cauterise unfairness in retail lease arrangements. There is nothing like that in the Residential Tenancy Act in Tasmania. It is rigged in favour of owners and not renters.

We need to have decisions which consider the current rent and past rent increases, the costs for services and repairs provided by the owner of the property, as well as the works that are being carried out by the tenant, the general state of the property - if it is dishevelled, if it is in good repair. These are the sorts of things that ought to be considered when a rent increase is being determined as reasonable or not by the commissioner.

Rent reductions should be issued if the tenant's use or enjoyment of the premises has been diminished significantly as a result of the loss of utility of a particular feature of the property, the loss of part of the premises. Sometimes owners of properties unreasonably, unfairly park things on the rental property and expect renters to suffer it. They take up space in the garage, they drop around and do the gardening when they feel like it. These are the sorts of things tenants in the current market in Tasmania have no capacity to do anything about for fear of retribution and being evicted.

The sort of fairness that needs to be inserted into the Residential Tenancy Act - as we are seeing in this act for retail leases - would mean that you could only be convicted on good cause, where there were obvious violations of the lease agreement, where it has been demonstrated that a tenant has caused a nuisance to the premise. If the house is being sold, or is not going to be used anymore as a rental premises, or is going to be used by a member of a family - these are the sorts of reasonable reasons that a landlord ought to be able to mount a case to require the ending of a lease with a tenant.

The current situation is manifestly unfair for people who have pets. The Tenancy Commissioner should be enabled to make a decision about whether a pet cannot be kept on the premises. In other words, the right to put the onus in the hands of the tenant, unless the landlord wants to object, and then they need to make the case. Obviously, it is important to make sure premises are protected from damage and that there is not going to be a public health and safety issue.

We are fully cognisant of the concerns that landlords can have, but the fundamental mental health and life joy that pets bring us should not be something that is only within the purview of a property owner. That is manifestly unfair. When you have people who are already in an insecure housing situation, by virtue of being renters, they of all people are the ones who particularly need to have their pets with them and get solace. There is a lot of difficulty and stress.

It would be amazing if other ministers could take a leaf out of minister Archer's book and do the work on their portfolio. Minister Barnett should do the work, fix up the Residential Tenancy Act. It is disgusting, inhumane, embarrassing and shameful that a government, a minister refuses to act when there are solutions on the table.

The Greens have been proposing these solutions for at least five years. In legislative form, they are ready to go. It would be great if the second reading speech comments by minister Archer were the sorts of words we were reading in a speech about the Residential Tenancy Act, where the minister said 'our Government has listened to the views of retail and property management stakeholders and has taken them into account'.

It would be great if they listened to the views of residents of rental properties and took them into account instead of being deaf to them.

I am waiting to hear Labor's specific comments and the minister's response, but we have a bill here that was partly about protecting businesses during COVID-19. We do not have a government that was protecting renters during COVID-19, other than for a very brief time, at the Greens' initiative, to end the no-cause evictions, no people to be evicted during that early period of COVID-19 in 2020. That was such a short period of time. It was an amazing period of time for people who are renters to not have that axe hanging over their heads.

The minister says the purpose of the code of conduct for commercial tenancies during the COVID-19 period was to provide additional protections and rent reductions for tenants experiencing financial hardship. They are still experiencing financial hardship, only it has become worse. It has become a lot worse because since that time, 2020, there has now been an extra nearly 20 per cent on top of the increase people had suffered to that point. An extra 20 per cent of financial hardship on average to people renting in Tasmania.

We will continue to talk about this because people are continuing to suffer and there is a solution on the table. We implore the Government to look into their hearts and be as proactive for the rights of the dependent, the vulnerable, and the poor as they are for the property class. Those of us who own properties are extremely fortunate. Most children in Tasmania, unless they are children of the property class, will not be owning a home. That is a terrible situation. It means they have to live somewhere, we have to protect them, we have to protect their rights in residential properties.