RESIDENTIAL TENANCIES (MISCELLANEOUS) AMENDMENT BILL

Committee Stage

In committee.

(Continued from 7 March 2013.)

Schedule.

The Hon. G.E. GAGO: I have some answers to questions that would probably be good to put on the record at this point in time, if I may. In answer to a question from the Hon. Ann Bressington, the honourable member queried whether a landlord's obligation to keep rental premises in a reasonable state of repair pursuant to section 68 of the act applies to the Housing Trust and its tenancy agreements. As I advised the honourable member, the Housing Trust is regulated under separate legislation. Pursuant to section 5(2) of the Residential Tenancies Act, only certain provisions apply to Housing Trust tenancy agreements. Section 68 of the act is not one of them.

Under the South Australian Housing Trust Act 1995, the Housing Trust is required to ensure that properties are well located, of adequate size and condition and meet reasonable standards of health, safety and security. In addition, the Housing Trust's conditions of tenancy require it to provide premises in a reasonable state of cleanliness and comply with all legal requirements in respect to building health and safety in relation to the premises and to keep the premises in suitable repair.

Housing SA administers maintenance accommodation standards on behalf of the Housing Trust which set out acceptable maintenance standards for accommodation under the Department for Communities and Social Inclusion housing group. The accommodation standards are aligned to the minimum housing standards within the Housing Improvement Act 1940, which covers all housing, including social housing.

The Hon. John Darley raised some questions in relation to the Hon. Stephen Wade's amendment to section 80 of the act, which was carried, to enable landlords to obtain compensation for losses flowing from an eviction. The honourable member queried the feedback received on the proposal during consultation, particularly the feedback of the Real Estate Institute of South Australia. I understand that there was a strong response in favour of the proposal during consultation and that the Real Estate Institute was one of the respondents that strongly supported it.

Additionally, the honourable member queried whether, in determining whether or not a landlord is entitled to compensation for any loss caused by the early termination of the tenancy, the tribunal will consider issues of financial hardship. I am advised that the tribunal will not be required to consider issues of financial hardship when determining an application for compensation under the amendment. The amendment moved by the Hon. Stephen Wade and supported by the government is clearly a protection for landlords; however, landlords will be required to take reasonable steps to mitigate any loss and it is important to note that the tribunal determines all applications and tenancy disputes on a case-by-case basis.

Schedule passed.

Title passed.

Bill reported with amendment.

Bill recommitted.

Clause 23.

The Hon. S.G. WADE: I move:

Page 12, lines 24 to 37 and page 13, lines 1 to 9 [inserted section 49]—Delete inserted section 49 and substitute:

49—Residential tenancy agreements

(1) A written residential tenancy agreement entered into after the commencement of this section must—

(a) state clearly in a prominent position at the beginning of the agreement that—

(i) the agreement is a residential tenancy agreement; and

(ii) the parties to the agreement should consider obtaining legal advice about their rights and obligations under the agreement; and

(b) set out—

(i) if an agent is acting for the landlord—the agent's name, address and telephone number, and, if the agent is registered as an agent under the Land Agents Act 1994, his or her registration number under that Act; and

(ii) the landlord's full name and address for service of documents (which must not be the agent's address for service); and

(iii) if no agent is acting for the landlord—the landlord's telephone number; and

(iv) the tenant's name; and

(v) the address of the residential premises; and

(vi) the terms of the agreement, including—

(A) the amount of rent payable; and

(B) the interval between rental payment times; and

(C) the method by which rent is to be paid; and

(D) the amount of the bond; and

(E) any agreement reached as to responsibility for rates and charges for water supply; and

(F) responsibility for insurance of the premises and the contents of the premises; and

(G) any other terms of the agreement (including, for example, terms in relation to pets or responsibility for repairs); and

(c) be dated and signed by the parties to the agreement; and

(d) comply with any other requirements prescribed by the regulations.

(2) A provision of a residential tenancy agreement that does not comply with subsection (1) that requires the tenant to pay a bond is unenforceable.

(3) A landlord must not enter into a residential tenancy agreement unless the landlord or an agent acting for the landlord has first given the tenant a written guide that explains the tenant's rights and obligations under such an agreement and is in the form approved by the Commissioner for the purposes of this section.

Maximum penalty: $2,500.

Expiation fee: $210.

(4) The matters specified or agreed in a written residential tenancy agreement entered into after the commencement of this section may not be varied unless the variation is in writing and dated and signed by the landlord and tenant.

(5) A landlord under a written residential tenancy agreement must keep a copy of the agreement, and any variation of the agreement, whether in paper or electronic form, for at least 2 years following termination of the agreement.

Maximum penalty: $2,500.

Expiation fee: $210.

(6) If a landlord (or an agent acting for a landlord) invites or requires a tenant or prospective tenant to sign a written residential tenancy agreement, the landlord must ensure that—

(a) the tenant receives a copy of the residential tenancy agreement when the tenant signs it; and

(b) if the agreement has not then been signed by the landlord, a copy of the agreement, as executed by all parties, is delivered to the tenant within 21 days after the tenant gives the agreement back to the landlord or the landlord's agent to complete its execution.

Maximum penalty: $5,000.

Expiation fee: $315.

(7) Subject to subsection (2), a failure to comply with this section does not make the residential tenancy agreement illegal, invalid or unenforceable.

By way of preface to my remarks, could I thank the council for its consideration in terms of allowing this amendment to be considered so soon after it was filed. As I will explain in my remarks, it was the result of significant consultation between stakeholders, the government and the opposition, and I appreciate the indication of members that they are happy to consider the amendments as tabled.

During the period since the bill was last debated the opposition has appreciated constructive discussions with the government and stakeholders, particularly in relation to this standard agreement. As members will recall, the government proposed that the standard tenancy agreement form be prescribed by the commissioner and the opposition proposed that the form instead be prescribed by regulation. This council supported that approach. I should remind members that the standard forms in question related only to written agreements and such a form did not apply to oral agreements.

It was put to the government and the opposition by the Real Estate Institute of South Australia that perhaps an alternative approach, rather than having a prescribed form—prescribed by either regulation or by the commissioner—was to have guaranteed criteria which an agreement must satisfy and for those criteria to be listed in the act. REISA sees this as a means of providing flexibility whilst guaranteeing protection.

I would like to thank the government and REISA for constructive discussions towards this amendment. To be fair to REISA I understand it has not seen the amendment in its final form but that it has seen iterations, and as I understand it the amendment before you today is supported by both the government and the opposition.

As is often the case in this place, the intent of the changes was not in dispute but the means by which they were to be achieved was subject to discussion. We understand that the amendment would address the mischief where some landlords snare tenants into tenancy agreements where the tenant made an application for a property at an inspection, which is then mischievously used to bind the tenant into a tenancy agreement, rather than another agreement being signed following an offer from the landlord.

The amendment specifies in proposed section 49(1) the criteria that must be met by a written agreement. A tenant is not liable to pay the bond for an agreement that does not meet these criteria. Once an agreement does comply, the tenant is then required to pay the usual amount of bond. Members might ask: why are we using the bond as a lever? It is out of respect for the view of this committee, in a number of its earlier discussions, that it does not want to criminalise the tenant-landlord relationship but lets you use appropriate incentives for both parties to respect each others interests. We believe that this is another way to promote compliance without what might be seen as criminalising behaviour.

The landlord or agent must also provide a written guide that explains tenants' rights and obligations under such an agreement in the form approved by the commissioner. The amendment retains the right proposed in the bill that requires a tenant to be provided with a copy of the agreement within 21 days and would include a requirement for records to be kept for up to two years after the agreement. I commend the amendment to the committee.

The Hon. G.E. GAGO: The government rises to support this amendment. The Hon. Stephen Wade's amendment to prescribe the form was carried by a majority of members during the debate. The government opposed the amendment on the basis that a prescribed form would not enable the flexibility required for such a document. This was a key issue identified by respondents during consultation when the government had originally proposed to prescribe the form. I commend the honourable member for acknowledging the issue.

The honourable member's amendment does not provide for a standard form agreement; rather, it prescribes standard terms that must be included in a written residential tenancy agreement. The purpose of the introduction of a standard form agreement was to create a protection for tenants who unwittingly locked themselves into a tenancy agreement through Application to Rent forms. Many of these Application to Rent forms, which are generally required to be filled out by a prospective tenant to be considered for a property, contain fine print clauses that are designed to create a binding agreement in times of low vacancy. People may sign a few of these forms in one weekend and find themselves locked into multiple tenancies and therefore potentially subject to break-lease costs. This is why the government proposed the introduction of a standard form agreement, pursuant to section 23 of the bill.

The honourable member's amendment will protect prospective tenants by requiring a written residential tenancy agreement to state clearly, in a prominent position, that it is an agreement and that parties should consider obtaining advice about their rights and obligations under the agreement. It appears that the amendment will also provide the flexibility required for written agreements. It is noted that the Real Estate Institute of South Australia supports the proposal to prescribed terms rather than a form. For these reasons, the government is happy to support this amendment.

The Hon. D.G.E. HOOD: Briefly, I would like to put on the record that Family First also supports the amendment. We met with Greg Troughton from the Real Estate Institute of South Australia last week and he expressed that this would be the position should an amendment come forth. We support the Hon. Mr Wade's amendment.

The Hon. M. PARNELL: The Greens are supporting this amendment. We think that it is very unfair for tenants to be locked into a binding agreement on the basis of what is effectively an application; this amendment, I think, clarifies that. We are pleased that the Legislative Council has again shown that, when given time to have a good look at provisions that have gone through the lower house, we can usually make them better.

Amendment carried; clause as further amended passed.

Clause 35.

The Hon. G.E. GAGO: I move:

Page 16, lines 31 to 39 and page 17, lines 1 to 10 [clause 35(9)]—Delete subclause (9) and substitute:

(9) Section 61(3)(a)—delete '$150' and substitute '$250'

It was proposed to enable a landlord to be able to request an additional week's rent in bond if an animal is permitted at the request of the tenant to be kept on the premises. The amendment seeks to remove the subclause from the bill. The government had proposed to introduce a pet bond for the benefit of tenants who may now be prevented from keeping a beloved pet with them on their rented property, as previously advised.

Feedback during consultation highlighted the fact that landlords and agents would be more willing to allow a tenant to keep a pet if they were able to take an additional bond to alleviate their concerns about potential damage to the property that might be caused by the pet. While the concept of the pet bond had generally been well received, the application causes a number of unintended negative consequences. Notably, it raises genuine issues of hardship for people who may have been renting with a pet for some time, the requirement to find the additional week's rent up-front would be difficult for many leading to hardship or the possibility that animals may need to be abandoned. Therefore, I move that amendment.

The CHAIR: The Hon. Ms Vincent, you have a number of amendments standing in your name.

The Hon. K.L. VINCENT: Given that the pet bond clause will now be removed, they will not be necessary, but I would like to say that I think this is a very good compromise. Dignity for Disability, of course, had some very serious concerns around the fact that the pet bond could possibly have been charged to people with disabilities who required assistance animals. I was, in fact, quite surprised that the government seemed perfectly unaware that that could have been in contrast to the Disability Discrimination Act so I was prepared to move an amendment to exempt people with assistance animals from paying that bond and rightly so, I believe.

It is no secret that people with disabilities are more likely to be on fixed and low incomes making it difficult enough for them to find private rental properties and increasing their dependence on government-funded housing. Anything that can make it more possible for people with disabilities to get out of that cycle is a welcome change, and to that end, whilst I was prepared to move my amendment, I think this is a worthy compromise and I will support the amendment.

The Hon. M. PARNELL: I too had a number of amendments to clause 35 and I have to say I have mixed feelings about abandoning the pet bond. I think it generally received support but I think that possibly the lesson to have been learnt from this exercise is that the evidence base on which decisions were being made was perhaps not ideal. We have certainly had anecdotal evidence from animal welfare groups who felt that a pet bond may have been the deal clincher, if you like, that enabled people to keep pets, and we know that pets have a very positive impact on people's mental health. We also had other submissions from groups like Shelter who were concerned at the considerable extra impost that would have fallen on largely low income people.

The other bit of information I think is that I certainly base some of my analysis on the Western Australian experience and I understand that they are now revisiting their pet bonds and how they are configured. I would like to see us revisit this at some stage; it would be good for there to be a deal more evidence and I would urge the government to talk to groups like the RSPCA and to find out to what extent we do have a problem with animal dumping when people have to leave or change residential premises. If we could come back and revisit this some time in the future then I think that would be a worthwhile exercise.

Given for now that the government's amendment is that pet bonds are off the table for the time being, then those amendments that I had which were to limit the operation of the bond to cats and dogs and also to limit how the bond could be used are now effectively redundant if the will of the council is to dispense with pet bonds altogether.

The Hon. D.G.E. HOOD: I rise to indicate that Family First is also somewhat disappointed that we have decided to walk away from the concept of a pet bond, but it seems that the practicalities were too difficult for a number of the issues we debated last sitting week, so we will support the amendment.

Amendment carried; clause as further amended passed.

Clause 42.

The Hon. G.E. GAGO: I move:

Page 20, after line 39—Before subclause (2) insert:

(1) Section 70—after subsection (1) insert:

(1a) It is a term of a residential tenancy agreement that a landlord will not unreasonably withhold his or her consent to an alteration or addition to the premises that is necessary to ensure the provision of infrastructure or a service of a prescribed kind.

This relates to clause 42(1) of the bill which proposed to amend this provision to require that a landlord may not unreasonably withhold their consent.

The amendment of the Hon. Stephen Wade, which was carried, deleted subclause (1) so that landlords may continue to withhold their consent for an alteration or addition to the premises no matter how unreasonable it may be. One of the key matters proposed to be addressed by clause 42 of the bill was to prevent landlords from unreasonably withholding their consent to connect the premises to the National Broadband Network. Following debate on this issue, members agreed to recommit clause 42 of the bill.

This amendment attempts to resolve the issue by providing that a landlord must not unreasonably withhold their consent to an alteration or addition to a premises that is necessary to ensure the provision of infrastructure or a service of the prescribed kind. It is considered more appropriate to prescribe these matters in the regulations rather than set them out within the act. It is envisaged that the kinds of things that may be prescribed would be access to digital television and the National Broadband Network.

The Hon. S.G. WADE: In the original debate, the Hon. Mark Parnell raised the prospect that some tenants may miss out on the NBN connections due to landlords not seeking to have their property connected. The opposition did not support the broadbrush approach of the government in terms of removing landlords' rights over their own property and so we did move to oppose their original amendment to section 70(1). In the debate, though, I did indicate that the opposition does appreciate the need for tenants to have access to infrastructure such as the NBN, so in that sense we are very attracted to the amendment.

The amendment puts a reasonableness test for infrastructure and prescribed services such as the NBN. It seems to be a workable way forward to address the concerns about tenants' access to infrastructure while maintaining the status quo for other non-infrastructure alterations. Normal alterations would not be subject to a reasonableness test as the council determined at its last sitting. Again, I thank the government for its constructive approach during the development of this amendment. I think the amendment goes a significant way to continuing what this bill seeks to achieve, which is a balance between the interests of landlords and those of tenants.

The Hon. M. PARNELL: It is a matter of record that the Greens were happy to support the government's broadbrush approach which provided that the consent of a landlord to a reasonable request for alterations to the premises should not be unreasonably withheld, but that was unsuccessful. We are now at this stage, and I think this is a good compromise. The advantage of this clause now is that the government intends to give itself the power through regulation to decide what forms of alterations to premises fall within the ambit of the subclause, that being, the provision of infrastructure or a service of a prescribed kind.

What this exercise has us reflecting is that, when it comes to modern living, the necessary components of a modern home have gone beyond a cooker, electricity, lights, running water and an operating toilet, and they have now extended to communications. I understand that the government's intention at this stage is to only prescribe the connection to the National Broadband Network which, as we said in debate previously, is also a de facto fixed telephone line, given that the copper is to be withdrawn once the NBN has rolled out, and the government also intends to prescribe some of the television services.

I think this certainly will achieve the objective of the Greens' amendment, which was to put pressure on landlords not to be unreasonable when it comes to the connection of the National Broadband Network to their homes, and the Greens are happy that our amendment has effectively found its way into this legislation, so we will be supporting this amendment.

Amendment carried; clause as further amended passed.

Clause 46.

The Hon. D.G.E. HOOD: I move:

Page 24, line 18 [clause 46(2), inserted subsection (3)(b)]—Delete '14' and substitute '30'

This is a very simple amendment, as members can no doubt see. I will briefly explain it to refresh their memories. I moved an amendment to this clause last sitting week, which was unsuccessful. This is perhaps a more middle ground approach. This section says that a tenant is not required to pay rates and charges for water supply if—and this is the relevant part—'the tenant has requested from the landlord a copy of the account for the rates and charges and the landlord has failed to provide a copy to the tenant within 14 days of the request at no cost.' This amendment simply changes that 14 days to 30 days.

Some people might say that 14 days is enough and I think in most cases it will be, but I think the council should note here that the penalty is a very severe one, that is that the landlord loses the ability absolutely to recover those costs at all. I think this amendment provides a more reasonable time if the person happens to be overseas or ill, for example.

The Hon. G.E. GAGO: The government rises to support this amendment. This amendment seeks to increase the time limit within which the landlord is required to provide a copy of the original bill to the tenant. We think this is a fair and reasonable compromise and a balance between the two sets of interests.

The Hon. S.G. WADE: The opposition will also be supporting this amendment as we consider it provides a little more flexibility for landlords without detracting from the fundamental protections for tenants that the measure provides for.

The Hon. M. PARNELL: The Greens will also be supporting this amendment. We believe that it is very unfair for a tenant to have hanging over their head the potential of being hit with old bills. Certainly the government's amendment dealt with that problem. Whether 14 days was sufficient time—perhaps not, but at the end of the day tenants still now have the comfort that they cannot be taken by surprise with very old bills and being asked to reimburse them. I think this amendment does certainly improve on the status quo, so we will be supporting it.

Amendment carried; clause as further amended passed.

Bill reported with amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for the Status of Women, Minister for State/Local Government Relations) (15:59): I move:

That this bill be now read a third time.

Bill read a third time and passed.