Rent law revamp to lure investors
22 September 2007
TENANTS face swift eviction if they fall behind in their rent and many will have to pay water charges currently borne by landlords, under the first big overhaul of NSW's tenancy laws in 20 years.
But tenants' rights will also be boosted. If landlords default on their mortgages and their properties are repossessed, tenants will be guaranteed at least 30 days' notice to move out.
And for the first time, renters who need to move out of a share house or a relationship will be able to be apply to have liability on their part of the lease waived.
The changes are partly about "encouraging investment and people back into the property market", the Fair Trading Minister, Linda Burney, told the Herald.
"At the moment it can take three months to [evict tenants] and that's a long time." That will be about halved under the new legislation to cut the "red tape".
"Encouraging investors back into the market should help to reduce Sydney's rental squeeze," Ms Burney said. The rental vacancy rate in Sydney is just 1.5 per cent, and this adds to the housing affordability crisis.
The State Government will release its plans for public comment today - after several years of reviews - before introducing legislation early next year.
The tenancy tribunal now confronts more than 20,000 cases involving rent arrears every year, and the Government wants to cut its workload.
Under the changes, tenants who fall behind in rent would have "the onus placed on them to apply to the tribunal" if they wished to contest their eviction - rather than landlords having to justify their case. The tribunal could make a decision on the application swiftly without need for a hearing.
But the laws will also protect tenants who become victims when landlords default on their mortgages. The planned 30-day eviction warning follows horror stories of tenants arriving home to find the locks changed.
On the rights of renters leaving a shared tenancy, Ms Burney said: "The issues of co-tenancy are really important - particularly where you might have a domestic violence situation."
Other planned changes include:
■ A right to a reduced rent if a landlord puts the property up for sale and prospective buyers traipse through;
■ Greater rights for tenants to put up pictures or paint properties;
■ Water charges to be levied on all tenants in properties with separate meters to provide "uniformity". A similar move in public housing resulted in a 29 per cent cut in water use;
■ Powers for the tenancy tribunal to remove tenants from databases that real estate agents use to reject applicants;
■ Cancelling eviction notices if a tenant can pay their rent arrears before the eviction date.
The Government plans to stop the payment of interest to tenants on their bond money. Currently the rental bond board returns the money after tenants move out of a property, with an interest payment of 0.01 per cent. That is just $80,000 a year on the $650 million in bonds that it holds.
The principal solicitor for the tenants' union, Grant Arbruthnot, said it was "retrograde" to put the onus on tenants when they fall behind in rent. It would hurt people with low literacy and of non-English speaking background the most. The Government says those people would receive special consideration.
Ms Burney, a former chairwoman of the Council for Aboriginal Reconciliation, said it was about achieving a "balance" and she stood on her record of "protecting the rights of the vulnerable".
The Real Estate Institute of NSW welcomed the quicker dispute resolution but said it needed a closer look at the detail.