Residential Tenancies (Protection of Prospective Tenants) Amendment Bill

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (16:42): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation and explanation of clauses inserted in Hansard without my reading them.

Leave granted.

I am pleased to introduce the Residential Tenancies (Protection of Prospective Tenants) Amendment Bill 2023. This Bill proposes to amend the Residential Tenancies Act 1995 to introduce some immediate protections for tenants.

South Australia's residential vacancy rates remain at historically low levels. The supply shortage of rental properties has caused rents to increase substantially and has created an environment where renters are struggling to find rental properties in an increasingly competitive market.

The Government is committed to improving the housing outcomes for people in South Australia through our recently announced housing package. As part of this package, the Government is reforming the Act to better meet the needs of today's rental housing market, improve protections for renters and ensure landlords can continue to manage their properties effectively.

On 3 August 2022, the Minister for Consumer and Business Affairs hosted the Residential Tenancies Act Review Forum with the Commissioner for Consumer Affairs to hear first-hand about issues currently impacting the sector and any potential solutions or remedies offered by the sector. Key stakeholders from the forum included Shelter SA, the South Australian Council of Social Service, Uniting Communities, Aboriginal Housing, Disability Housing, the Real Estate Institute of South Australia, the Landlords Association of South Australia, the South Australian Housing Authority, the Department of Human Services and the University of South Australia.

Broad public consultation on the review of the Act was then undertaken between 15 November 2022 and 16 December 2022. More than 5,000 people completed the YourSAy survey and over 150 submissions were received from key stakeholders and members of the public.

The Government has identified four immediate priorities to progress ahead of broader reforms being presented to Parliament arising out of the review.

This Bill aims to deliver on three of these immediate priorities, being banning rent bidding, considering information on the rental application form, and protecting tenant information. The fourth immediate priority relates to more affordable residential tenancy bonds, which was progressed by amendments to the Residential Tenancies Regulations 2010 (Regulations) and commenced on 1 April 2023.

Improving the affordability of residential bonds has provided some immediate relief for tenants who are already experiencing the pressures of increased costs of living.

At present, there are a significant number of applicants for rental properties due to the low vacancy rate. There are reports of prospective tenants being requested to provide personal information that should not be required for a rental application. This may relate to the prospective tenant's rental bond history, financial records and other information protected under equal opportunity legislation.

Prospective tenants may also be required to complete numerous applications across various platforms, which in some cases are hosted by third parties to the landlord or agent. Prospective tenants may be advised that this is compulsory and have little choice but to provide personal information to third parties with little transparency on whether their information will be kept confidential, used for any other purposes or shared.

As a first step towards standardising rental application forms, this Bill proposes to insert new section 47B to prohibit a landlord (or agent) from requesting prescribed information from a prospective tenant and provide for other requirements to be prescribed relating to the provision of information to or by a prospective tenant. This change proposes to reduce the amount of information a prospective tenant can be asked to provide in a rental application, relieving some of the administrative burden involved and protecting the privacy of prospective tenants where information is not reasonably necessary.

Prohibiting the disclosure of certain information will also reduce opportunities for discrimination to occur in the tenant selection process. Under the Equal Opportunity Act 1984, it is illegal for a landlord (or agent) to discriminate against a tenant based on certain personal characteristics. The insertion of section 47B allows an avenue for the disclosure of this information to be restricted, reducing opportunities for prospective tenants to be discriminated against on these grounds.

Section 47B(2) provides an exemption to allow a landlord (or agent) to request prescribed information for the purposes of determining their eligibility for a housing assistance program or an entity, or a class of entities, prescribed by the regulations. This exemption does not relate to a landlord (or agent) requesting a prospective tenant to disclose if they receive housing assistance but aims to ensure that a provider of a housing assistance program that is also a landlord (or agent), can ask for the necessary information they need to determine whether the prospective tenant is eligible to receive assistance.

It is proposed to exempt the South Australian Housing Trust (SAHT) and registered Community Housing Providers (CHPs) from these provisions. Section 5(2) of the Act specifies the provisions (and only those provisions) which apply to tenancy agreements under which the SAHT or a subsidiary of the SAHT is the landlord. However, as the Bill regulates matters prior to the forming of a residential tenancy agreement, to remove any doubt, it is proposed to exempt the SAHT and Community Housing Providers engaged by the SAHT.

Supporting amendment regulations will be progressed subject to passage of this Bill through the Parliament. The prescribed information will seek to provide greater consistency with other jurisdictions and will be informed by submissions received as part of the broader review of the Act and further targeted stakeholder consultation. There are also concerns that rental properties are being advertised as a price range and landlords (or agents) may solicit higher rent offers in the current market.

This Bill proposes to insert new section 52A requiring rental properties to be advertised as a fixed amount and bans a landlord (or agent) soliciting or otherwise inviting an offer of higher rent. However, this does not address third parties engaged by landlords or agents to facilitate prospective tenants' applications. Some of these operators are also charging prospective tenants a fee for a background check and providing landlords and agents ratings for prospective tenants.

These operators appear to be unregulated, and I am advised that existing section 53 of the Act prohibiting charging a prospective tenant a fee other than rent or bond for consideration for a tenancy agreement arguably may not apply in these circumstances. It is also unclear whether Part 5A of the Act relating to residential tenancy databases, often referred to as tenant blacklists, applies to these operators.

I understand that this practice is relatively new and is an issue throughout Australia that is yet to be addressed. Reports have been brought to my attention of these operators providing higher ratings for prospective tenants in Victoria who offer higher rent, which seemingly appears to circumvent Victoria's existing laws prohibiting rent bidding.

This Bill proposes to introduce new section 52B to prohibit these operators charging prospective tenants a fee for an assessment or rating and to prohibit providing an assessment or rating where this is based on an offer of higher rent. This aims to protect prospective tenants from being charged a fee for a residential tenancy application and from being enticed to offer higher rent.

The proposed introduction of section 52B will see South Australia leading the nation in the regulation of third-party operators. This measure is a priority for Government, as failing to regulate these third parties undermines important protections to outlaw rent bidding and provide relief for tenants.

It is also proposed to exempt the SAHT (or a subsidiary) and registered CHPs from these provisions. The SAHT's rent policy (available on sa.gov.au) outlines how rent is calculated. CHPs are contractually required to abide by SAHT's rent policy in relation to offering subsidised rent.

Rent charged by SAHA and CHPs according to this policy is set according to a tenant's income before tax, and is reviewed twice yearly or whenever the people in the household or household income changes. This means the property is not offered as a fixed amount – it is offered on a variable basis dependant on household income, up to a maximum of market rent.

Lastly, this Bill also seeks to protect tenants and prospective tenants' personal information. At present, the Commonwealth Privacy Act 1988 does not apply consistently to landlords (or agents) and third-party operators facilitating prospective tenant applications. The requirements are also principles-based and not sector specific. This Bill proposes to introduce new section 76B which specifies obligations to protect tenant information from misuse, interference or loss and from unauthorised access, modification or disclosure.

This Bill will require information provided for the purposes of applying to enter into a tenancy agreement (tenant information) to be destroyed after three years from the tenancy ending. This only applies to successful tenants that have entered into a tenancy agreement and aligns with the period of time information may be kept on a residential tenancy database.

A person, including third party operators facilitating tenant applications, will only be able to keep prospective tenants' (unsuccessful) information for up to 30 days after the date on which a tenancy agreement is entered into (by the successful applicant). However, with the prospective tenants' consent, information may be kept for up to 6 months. This provides for circumstances where the person (or third party) is continuing to assist the prospective tenant to find another tenancy or the agreement with the successful applicant does not proceed or is terminated early.

Tenant and prospective tenant information will also not be able to be disclosed without the consent of the person to whom the information relates, as required by law or the tenancy agreement, or in accordance with an order from a court of tribunal.

It is proposed to exempt the SAHT (or a subsidiary), registered CHPs and any Commonwealth and State Government agency as prescribed by the regulations. I am advised that there is a single application process for public and community housing, which is managed by SAHT. A prospective tenant applies using a registration of interest form. A prospective tenant may remain on the single housing register (public and community housing) for many years until an appropriate property that meets their needs is available. If housed, the information is used to ensure appropriate supports are put in place so that the tenancy is successful.

Information on the register is held by SAHT in accordance with the State Records Act. CHPs are contractually required to abide by the SA Information Privacy Principles. This accords with the requirements of s5 of the Information Privacy Principles, which requires agencies to ensure that, where a contract for services necessitates the disclosure of personal information, the contract includes conditions to ensure the Principles are complied with as if the Contracted Service Provider were part of the agency.

There are currently no government agencies or instrumentalities of the Commonwealth or the State proposed to be prescribed. This has been included to ensure these provisions do not interfere with the operation of another Act, such as Commonwealth rental assistance.

These priorities seek to provide some immediate relief to tenants in the current rental market and address some of the issues around applying for and starting a new tenancy.

There are many other important issues that need to be considered and addressed as part of the broader review of the Act, which is continuing to be progressed as a priority.

I look forward to working with Members to progress this Bill and future amendments arising out of the broader review to support our residential tenancy sector.

I commend this Bill to the House and I seek leave to insert the Explanation of Clauses in Hansard without my reading it.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Residential Tenancies Act 1995

3—Insertion of section 47B

New section 47B is inserted:

47B—Prospective tenant—requirements relating to provision of information

An offence is provided for a landlord, or an agent of a landlord, if they request a prospective tenant to disclose prescribed information. Subsection (1) does not apply to certain prescribed entities. Provision is made for regulations to impose requirements relating to the provision of information to or by a prospective tenant in connection with applying to enter into a residential tenancy agreement. It is an offence to breach such a requirement.

4—Insertion of sections 52A and 52B

New sections 52A and 52B are inserted

52A—Premises to be offered for rent at fixed amount

An offence is provided for a landlord, or an agent of a landlord, to advertise or otherwise offer premises for rent under a residential tenancy agreement unless the rent under the agreement is advertised or offered as a fixed amount. The offence does not apply to certain signs at or near premises.

An offence is also provided for a landlord, or an agent of a landlord, to solicit or otherwise invite an offer of an amount of rent under a residential tenancy agreement that is higher than the advertised amount of rent for the premises.

The section does not apply to certain entities.

52B—Special provision relating to assessments etc of prospective tenants

An offence is provided for a person acting in trade or commerce (other than an agent of a landlord) to provide an assessment or rating of the suitability of a prospective tenant to enter into a residential tenancy agreement if a basis of the assessment or rating relates to—

in the case of premises advertised or otherwise offered for rent as a fixed amount under the residential tenancy agreement—the fact that the amount of rent that the prospective tenant is willing to pay under the residential tenancy agreement is higher than the fixed amount; or

in any other case—the amount of rent that the prospective tenant is willing to pay under the residential tenancy agreement.

An offence is also provided for a person, except in prescribed circumstances, to require or receive from a prospective tenant a payment for the provision of an assessment or rating of the suitability of the prospective tenant to enter into a residential tenancy agreement.

5—Insertion of Part 4 Division 14A

New Division 14A is inserted into Part 4:

Division 14A—Tenant information

76A—Preliminary

Terms are defined for the purposes of the Division. The interaction of the Division with Part 5A and the national privacy principles is provided for. The Division does not apply to certain entities.

76B—Dealing with tenant information

A person who holds personal information provided for the purposes of applying to enter into a residential tenancy agreement (tenant information) must take such steps as are reasonable in the circumstances to protect the tenant information—

from misuse, interference or loss; and

from unauthorised access, modification or disclosure.

Requirements relating to destroying tenant information are also imposed.

An offence is also provided for a person who holds tenant information to ensure that it is not disclosed except in accordance with the provision.

76C—Powers of Tribunal

The South Australian Civil and Administrative Tribunal is authorised to make orders necessary or expedient in the opinion of the Tribunal to ensure compliance with the Division or any provision of the Division. The Tribunal is also authorised to make an order requiring a person who has committed an offence against the Division to comply with conditions specified in the order in relation to tenant information held by the person.

Schedule 1—Transitional provisions

1—Transitional provisions

Transitional provisions are inserted for the purposes of the measure.

Debate adjourned on motion of Hon. L.A. Henderson.