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RESIDENTIAL TENANCIES BILL
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30 October 1997
Second Reading
TEHAN
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RESIDENTIAL TENANCIES BILL
Second reading
Mrs TEHAN (Minister for Conservation and Land Management) -- I move:
That this bill be now read a second time.
The Residential Tenancies Bill is a significant piece of legislation which
continues the process of tenancy reform in this state. For the first time
legislation affecting residential tenancies, the occupation of caravan parks and
rooming house residency has been brought together into one single act written in
plain English.
On its introduction in 1980 the Residential Tenancies Act represented a major
overhaul of the arrangements governing private and public rental housing in
Victoria. In 1988 the Caravan Parks and Movable Dwellings Act was introduced to
ensure that appropriate rights and responsibilities were provided for long-term
residents in caravan parks, as well as clarifying the terms and conditions of
such tenure arrangements. In 1990, the Rooming Houses Act was introduced to
recognise the particular housing arrangements that apply between owners/managers
of rooming houses and their residents.
The Residential Tenancies Bill 1997 now provides clear and comprehensive
legislation for these three categories of housing tenure, with common provisions
where possible and separate provisions where they are required to preserve those
aspects specific to a particular tenure type. This bill outlines procedural
requirements for those seeking to understand their rights and responsibilities
or resolve disputes.
According to the 1996 federal census, there were 389 000 Victorian households in
rental accommodation, or about 25 per cent of all Victorian households. The
rental sector included some 290 000 households renting privately, about 68 000
households in public rental and 5200 persons living in boarding houses. In
addition, the Australian Bureau of Statistics tourist accommodation survey in
June 1995 identified some 6300 households who were living as long-term residents
in Victorian caravan parks.
Given these numbers, residential tenancies legislation is vital in striking a
balance between the interests, rights and responsibilities of those who own or
invest in a property which they make available on a leasehold basis for
accommodation for others and the interests of those who make such accommodation
an appropriate home for themselves and their families.
This bill is the product of extensive consultation and consideration of a wide
range of views. It improves the clarity of the existing legislation, streamlines
dispute resolution mechanisms through the Residential Tenancies Tribunal and
introduces some important reforms and initiatives that will benefit all
Victorians.
There are a number of key issues that are addressed and resolved in this bill.
The differences between tenure types are reflected in the bill. A residential
tenant has exclusive possession of the entire rented premises which the landlord
may not disturb without cause. Rooming house and caravan park residents have
shared use of communal facilities and the owner or manager is often also living
on the site. Residency rights in caravan parks do not usually
Page 870
arise until a person has occupied a caravan in the park for at least 90
consecutive days or where the caravan park owner has expressly consented to the
caravan being occupied as a person's only or main residence. Caravan park
provisions reflect the fact that caravan residents often need to deal with both
the owner of the caravan and the owner of the caravan park, and the bill
reflects the separate responsibilities of each of the parties in such cases.
Other factors specific to caravan parks and rooming houses include the wider
range and variety of shared or communal services and facilities provided to
residents. Such services and facilities can include the provision of meals,
shared cooking facilities, communal bathrooms and communal living and recreation
areas. The duties and obligations of rooming house and caravan park residents
and owners reflect the specific nature of this type of accommodation, namely
shared facilities and increased potential for interference or disturbance of an
individual's quiet enjoyment or use of their room or van.
Conversely, there are other duties and obligations imposed on residential
tenants and their landlords which reflect the fact that the landlord and the
landlord's agents are not usually present on the site.
Notice periods for remedy of breaches and for termination are generally shorter
for rooming houses and caravan parks in recognition of the greater mobility of
residents of such accommodation and the greater accessibility of the owner or
manager. For a very small but important sector of our community the bill
continues the security accorded to protected tenants, who are now quite elderly,
in terms of part 5 of the Landlord and Tenant Act 1958. The bill provides for a
number of important improvements which extend the coverage of the legislation
and better define prevailing tenancy roles and responsibilities.
The bill introduces new provisions dealing with violence by tenants and
residents of rooming houses, caravan parks and certain managed high-density
residential developments. The new provisions permit the manager or owner of a
rooming house or a caravan park or the manager of a managed high-density
building to require a tenant or resident to leave the premises if a serious act
of violence by the resident or tenant has occurred on the premises.
A request to leave, which must be in a prescribed form, has the effect of
suspending the resident's or tenant's right to remain on or return to the
premises until the end of two business days. If the landlord or owner makes
application to the tribunal for an order of possession within this time, the
suspension is automatically extended until the tribunal makes its determination.
If the landlord or owner fails to make an application by the end of the second
business day, the suspension is automatically lifted and the resident or tenant
may return to the premises.
A resident or tenant who remains on or returns to the premises during the period
of suspension commits an offence and faces a penalty of 10 penalty units for
each offence.
A resident or tenant who the tribunal determines has been wrongly requested to
leave may claim compensation from the landlord for any loss suffered. This
compensation would be in the form of the rent or hiring charges for the period
of the suspension.
The bill resolves difficulties currently experienced in determining whether
goods left behind by a tenant after termination of a tenancy should be stored.
The existing provisions had been interpreted to require an assessment of the
relative value and storage cost of each good of value left behind. Consultation
revealed that this often resulted in tenants' household furniture being
destroyed, as each item was of little value.
This provision now requires consideration of the combined value of all goods
left behind and the total removal, storage and sale cost of such goods. The new
provisions will protect all of a tenant's goods up to a combined value of those
goods.
The bill also introduces new provisions to protect a tenant's personal documents
from destruction if left behind at the end of a tenancy. In the past, personal
documents were sometimes destroyed by landlords, as being of no monetary value.
Personal documents are defined in the bill as official documents, photographs,
correspondence and any other document which it would be reasonable to expect
that a person would want to keep. A former landlord or owner of a rooming house
or caravan park must take reasonable care of such documents for at least 28 days
before they may be disposed of according to law.
This bill specifically addresses deficiencies in the existing rental bond
system. Under the current rental bond system bonds are not held by a party
neutral to the tenancy agreement, returns on the investment of bond moneys are
not maximised and there is a degree of non-compliance with the current bond
lodgment procedures.
The bill replicates much of the existing policy relating to residential bonds,
such as condition report requirements, maximum bond limits and rules relating to
the entitlement to the bond. However, there are changes to these provisions to
accommodate the proposed centralised administration of all residential bonds by
a central bond manager and to streamline the rental bonds lodgment, refund and
entitlement system.
Page 871
The bill provides for a single person body corporate, to be known as the
Residential Tenancies Bond Authority, which will contract the services of a
central bond manager to administer the rental bond system. This contract will be
awarded after a competitive tendering process has been conducted. The central
bond manager will administer the rental bond system on the following basis:
bond moneys and a bond lodgment form will be lodged with the central
bond manager by the landlord or agent;
the bond moneys will be paid into a central trust account by the central
bond manager;
the central bond manager will provide payment acknowledgment to both the
tenant and landlord, or agent;
applications for refunds of bond moneys will be forwarded to the central
bond manager by post or a pre-registered facsimile service with refunds
made in the most cost-effective manner, preferably by electronic funds
transfer; and
investment income earned on moneys standing to the credit of the central
trust account will be utilised for a number of purposes, including
providing income to the Residential Tenancies Fund to discharge
functions under the legislation.
The implementation of a central bond authority will address the key areas of
concern with the current rental bond system by improving compliance with bond
lodging requirements, enhancing interest returns on moneys held and providing
for the neutral holding of the bond moneys.
The bill allows for part of the income earned from the investment of moneys held
to be returned to tenants. The Minister for Fair Trading will specify an
interest rate from time to time if it appears that there is sufficient surplus
available after consideration of market interest rates, the cost of services
under the bill and any other sources of income for the Residential Tenancies
Fund.
A new notice provision has been introduced into the bill to clarify the
procedures for terminating a fixed term tenancy agreement at the end of the term
in an efficient manner. There are also new notice provisions which offer a
balanced requirement for landlords to give tenants adequate notice where they
seek to regain possession of the property at the end of a fixed term.
A notice to vacate must be used by a landlord to advise the tenant that the
fixed term agreement will terminate at the end of the fixed term period.
Specific notice periods apply for tenancies of less than six months duration and
for those of six months or more. A subsequent notice must also be served if the
landlord intends to use the alternative fast-track method at the Residential
Tenancies Tribunal, provided for in the new legislation, to gain possession of a
property should the tenant remain after the end of the fixed term. The tenant
has a number of opportunities in this process to make an objection to the
Residential Tenancies Tribunal.
The new alternative possession method is a fast-track procedure introduced into
this bill. Given that 80 per cent of order of possession cases before the
tribunal are currently undefended, the alternative procedure provides
significant opportunity to streamline the operations of the Residential
Tenancies Tribunal.
The fast-track procedure may only be used where the landlord is applying for an
order or possession based on rental arrears or where appropriate notices to end
a fixed term tenancy have been served. The landlord is required to give or serve
on the tenant a copy of the relevant notices to vacate, a copy of the landlord's
application under the alternative procedure, two blank notice of objection forms
for the tenant to use, and a statement of the tenant's rights.
If the tenant lodges an objection, the alternative procedure cannot be used and
the matter proceeds to a tribunal hearing in the usual way. If the tenant does
not lodge an objection, the application is to be dealt with on the papers by the
registrar of the tribunal. The papers will consist of the landlord's
application, together with a supporting affidavit of evidence, details of the
tenancy, the rent owing and/or other relevant information. Where the fast-track
system is used for rental arrears, the tenant must owe at least 14 days rent to
the landlord.
Page 872
A determination by the registrar in accordance with the alternative procedure
for possession is deemed to be a determination by the tribunal. A tenant may
apply to the tribunal for review of the registrar's decision using existing
provisions which enable a review of other ex parte decisions. Hearing delays
have frustrated both landlords and tenants alike and this bill provides
opportunity for timely hearings for disputes over urgent repairs, resolution of
rental arrears and speedy consideration of issues relating to violence on
certain premises.
Provisions which facilitate the government's reforms in public housing are
contained in the bill. These provisions allow statutory authorities engaged in
the provision of housing to give a tenant a notice to vacate where the tenant is
no longer eligible for housing assistance against eligibility criteria.
A requirement that the eligibility criteria be published in the Government
Gazette provides necessary protections for the tenant that their eligibility is
assessed against defined and available criteria.
The bill has been underpinned by a most comprehensive, open and valuable
consultation process and two important consultant studies. These processes have
all contributed to the final drafting of the bill. Consultants reviewed the
draft provisions in accordance with competition policy and recommended a number
of amendments to ensure that anti-competitive elements were removed. The most
significant of these were:
the removal of any restriction on the period between rent increases,
while maintaining mandatory notice periods; and
the reduction of the notice period for a notice to vacate for no
specified reason from six months to three months.
The bill is extensive, and the provisions aim to substantially improve
residential tenancies legislation in this state. Victoria has been the leader in
fair and effective residential tenancies legislation in this country, and this
bill will further establish such benchmark arrangements in tenancy law.
I commend the bill to the house.
Debate adjourned on motion of Ms KOSKY (Altona).
Debate adjourned until Thursday, 13 November.