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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
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RESIDENTIAL TENANCIES (MISCELLANEOUS) AMENDMENT BILL

Committee Stage

In committee.

(Continued from 5 March 2013.)

Clause 40.

The Hon. G.E. GAGO: A couple of questions were asked previously in committee, which I took on notice and agreed to bring back a response. I have answers to those questions, so at this point I will give those responses. There was a question from the Hon. Kelly Vincent as to whether the pet bond would apply to assistance animals, such as guide dogs and hearing dogs. The honourable member stated that, if it did, it would breach the Disability Discrimination Act. I was advised that it was arguable that the proposed pet bond may apply to all animals, including assistance animals. We were confident that the antidiscrimination legislation dealt with this issue. After further consideration, it appears that it is arguable that, in some instances, a request for a pet bond for an assistance animal may breach the antidiscrimination legislation, therefore, when clause 35 is recommitted, the government will look to amend that provision to provide certainty that the pet bond cannot apply to assistance animals.

There was also a question asked by the Hon. Ann Bressington about who suggested the introduction of a pet bond. I am advised that the concept was suggested by respondents during the public consultation process, including the Real Institute of South Australia and the Landlords' Association of South Australia. All submissions referring to a pet bond are publicly available on the AGD website. The flavour of the submissions on this issue was that landlords and agents would be more inclined to keep pets if the pet bond was able to be requested; however, this matter may be discussed in further detail when clause 35 is recommitted.

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

Page 19—

Line 19 [clause 40(2), inserted subsection (1a)]—Delete 'The obligation' and substitute:

Subject to subsection (1b), the obligation

After line 20 [clause 40(2)]—After inserted subsection (1a) insert:

(1b) The obligation to repair does not apply if the tenant has agreed in writing that he or she does not require the state of disrepair to be remedied (but this subsection does not derogate from the operation of subsection (3)).

The first is a fairly simple amendment. The second amendment seeks to insert (1b) after (1a) in the bill. If I read from section (1a) of the bill, it makes it fairly obvious:

The obligation to repair—

that is the landlord's obligation to repair—

applies even though the tenant had notice of the state of disrepair before entering into occupation.

What this requires is that a landlord is compelled to repair a particular item in the home, even though that landlord may have advised the tenant, 'Look, the dishwasher does not work, are you okay with that?' and the tenant presumably would then say, 'Well, yes, I am okay with that if you would lower the rent by 20 bucks a week', or whatever it may be. I see no reason why the tenant and the landlord should not be able to agree on that. The bill means that they will not be able to agree on that if it is not amended.

My amendment says that, as long as the tenant and the landlord have an agreement in writing about this particular item—that is, in this case, the dishwasher not working—that does not need to be repaired during the term of that tenancy. That is the effect of the amendment.

I think that it is a sensible amendment. There are plenty of items in homes that tenants may not need and would seek to lower the rent as a result. I think that it is a win for landlords and tenants, so I would hope to get the support of the chamber.

The Hon. G.E. GAGO: The government rises to oppose this amendment. It is understood that the amendment seeks to address the situation where a landlord and tenant agree that a broken appliance does not have to be repaired in exchange for a discounted rent. If the tenant later changes their mind and requests the landlord to fix the appliance, the landlord is then obliged to do so but is prevented from increasing the rent as a consequence.

It is queried whether it is appropriate for a landlord to contract out of their statutory obligation under section 68 of the act. However, it is understood that domestic items that are not prescribed by the Housing Improvement (Standards) Regulation 2007 as being required to be provided in a house may be expressly excluded from a tenancy agreement so that, if the item breaks down, the landlord is not obliged to repair it. So, that provision exists.

Section 68 of the act exists to protect tenants by requiring landlords to keep the premises in a reasonable state of repair. It would be highly undesirable to reduce this protection, particularly for a minority of cases that may arise from time to time. Most importantly, it is crucial that vulnerable and disadvantaged tenants are protected from landlords who may abuse the situation created by the proposed amendment, and for this reason the government opposes this amendment.

The CHAIR: The Hon. Mr Hood, do you want to respond to that?

The Hon. D.G.E. HOOD: Perhaps I will respond to the minister quickly, for the benefit of other members, sir. My response is that I was told beforehand that the government would not support the amendment—so be it. I simply do not agree that this in any way puts undue pressure on tenants because specifically in (1b), which I seek to insert into the bill, it says that there has to be an agreement in writing. So, the tenant has to physically sign that they agree with that. However, if they are coerced into doing it, there are other protections available to them. That is what I am seeking to insert, and I believe that is the right thing to do.

The Hon. J.A. DARLEY: Can the minister confirm that the government amendment at clause 29 would apply equally to this clause; that is, if a non-essential item has been excluded from a lease agreement, both parties can come to a mutually agreeable arrangement to have it included, and the rent payable could then be adjusted accordingly? If this is the case, does it not make the Hon. Dennis Hood's amendment unnecessary, especially in light of concerns about trying to overcome statutory obligations?

The Hon. G.E. GAGO: The Hon. John Darley is correct in his summation; that is, if the landlord and tenant agree to exclude items that are not prescribed, they are not required to repair those and they have the ability to negotiate a rental price they can mutually agree. The government finds it completely unacceptable that we would create a situation where the landlord would be able to contract out of their statutory obligations. That is a very important principle, and it is a principle that is there to protect particularly the tenant. It does not take a great deal of imagination to see situations where vulnerable tenants could quite easily be talked into basically contracting away a whole range of repair obligations for a pittance of a rental benefit.

The Hon. A. BRESSINGTON: I am just wondering if the minister can clarify whether this particular piece of legislation also applies to Housing Trust and its agreements with its tenants?

The Hon. G.E. GAGO: We do not have that information. Housing Trust has separate legislation and we do not have that particular detail with us today.

The Hon. A. BRESSINGTON: Would the minister be able to provide that information before we finish this debate? I think it is very important that the laws that are being placed on private rental are also a standard that is required of the state.

The Hon. G.E. GAGO: Certainly.

The Hon. M. PARNELL: I understand where the Hon. Dennis Hood is coming from in terms of examples of non-essential items, where it might seem reasonable for the landlord and tenant to agree, 'We all agree the dishwasher does not work and we're not going to insist on you fixing it' but as the minister has pointed out with reference to housing improvement regulations, we could replace the word 'dishwasher' with 'cooker' or 'bath' or a whole range of things that are more important.

I know the Hon. Dennis Hood did in his contribution say they need to sign an agreement. It comes down to that question of undue pressure. The relationship we are talking about, between landlords and tenants, is not an equal relationship when you have low vacancy rates and tenants are desperate to secure whatever property they can. To be honest, they would sign whatever they could.

The other pressure tool that landlords can use—I will not agitate it now, because we get to it later—is the landlord can always say (and they will deny they said it), 'You know I can just give you three months and you're out.' When you have that hanging over your head, people will sign whatever, they will agree to whatever, and there is a risk that they will actually sign away some of the key elements that make for a really habitable, pleasant and safe living environment.

Amendments negatived; clause passed.

Clause 41 passed.

Clause 42.

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

Page 20, lines 40 and 41 [clause 42(1)]—Delete subclause (1)

This clause proposes to introduce a new phrase into the act which says that the consent for alterations to premises by tenants must not be reasonably withheld. The problem with that particular clause is that it refers to alterations or additions, and they are not defined and in our view could potentially encompass a wide range of actions, from minor matters to structural work. The government is insisting that this would only be for run-of-the-mill changes and would only apply to a small number of instances where a landlord unreasonably rejected minor alterations that the tenant reasonably needed, yet that is not what has been drafted and it is not what we are here debating today.

We need to respect the fact that landlords bring their private property to the table in a tenancy agreement. A landlord who rents their property to tenants does so through mutual agreement. The property they provide is not always simply an investment they hope to make a return on; it can also be a property they have received through a relative's estate or purchased to later reside in themselves. Needless to say, a landlord may be quite attached to the property in its current form.

When a tenant moves to a property and signs a tenancy agreement, they take the property as it is, not as the property they wish it to be. They should not be entering the premises with an intention of playing home renovator or of radically changing the premises without the agreement of the landlord, yet the government's amendment seeks to put the presumption towards allowing the change, rather than towards the reasonable maintenance or habitation of the premises in keeping with the landlord's wishes. If a landlord had suspected that a prospective tenant wanted to play home renovator, they might never have let the property in the first place.

The government's amendment gives no regard to the future use of the property, whether by another tenant or by the landlord themselves. As such, the Liberal Party is proposing that this section of the act remain as it is. I commend the amendment to the committee.

The Hon. G.E. GAGO: The government opposes this amendment. The proposal, under clause 42 of the bill, is based on feedback received from respondents during consultation which highlighted the fact that some landlords unreasonably withhold consent in relation to alterations or additions to the premises. An example may be the refusal of a request from an elderly person to install handrails and the like in a bathroom in response to a fall.

Additionally, the Department of Broadband, Communications and the Digital Economy suggested the amendment in relation to the rollout of the National Broadband Network. The department was concerned that some landlords might not agree to having fibre, wireless or satellite services connected to their properties during the free rollout, meaning that their tenants would miss out on access to the National Broadband Network.

The Hon. S.G. WADE: I find it interesting that the minister has raised the NBN at this point. It is also raised in an amendment by the Hon. Mark Parnell. The Liberal Party has been in discussions with the Greens, and we support their desire that tenants have access to basic infrastructure; in the modern world, communications infrastructure is essential to a decent life.

The minister has raised the response of the Department of Broadband, Communications and the Digital Economy to consultation. I do not think it would be accurate to say that the department has suggested it; the department suggested that there was a need for change and provided an attachment which detailed a wide range of alternative provisions in other states and territories. A number of those specifically limit the unreasonable element to minor changes; as I have said in my contribution, the government makes no such limitation.

We urge the committee to maintain the basic integrity of the landlord-tenant relationship and then, through further work that the Hon Mark Parnell is suggesting later in the clause, ensuring that tenants get access to basic infrastructure.

The Hon. M. PARNELL: The Greens will not be supporting the Liberal amendment. We support the government's position, which is to include the words 'which must not be unreasonably withheld'. I make that statement of position and also want to refer to what the Hon. Stephen Wade said in terms of tenants playing home renovator. The scope of the amended clause, the government's position, is that it does include picture hooks, which is probably the most common issue people have found. However, similarly, and as the Hon. Stephen Wade pointed out, it might be major structural alterations.

Of course, the key to it is 'unreasonably', and the arbiter of a dispute would be the Residential Tenancies Tribunal. Members have to remember that these are additions or changes that are made at the tenant's expense. For example, a tenant may want flywire on the doors or the windows to keep out the mosquitoes. It would be a matter of fact and degree about whether that was unreasonable or not. If it was a heritage building, where it was going to be impossible to install flywire in a way that was consistent with the heritage values, then maybe the landlord is not being unreasonable by saying no, but if it was any other house, then I would suggest that for something like the tenant wanting to put some flywire on the windows, it would be unreasonable for the landlord to say no.

We need to go one step further and think, 'What are the consequences of a finding of whether something is reasonable or unreasonable?' My understanding is that if the landlord is behaving unreasonably then that is likely to result in the tenant having a very good case to say, 'Well, I do want to live in a house that has these facilities. I was prepared to pay for it but because the landlord is saying no, I want out of this agreement.' If they get a finding that it was unreasonable for the landlord to agree, then perhaps that would be the best option, that maybe the tenant can give notice and break their one-year lease or whatever they have and find somewhere else. That is, as I understand it, a consequence of a finding of unreasonableness.

Certainly, I think including the words that the government proposes is going to redress some of the problems that people have had; for example, they do not want to be home renovators but they want to hang a picture and it can be fixed afterwards. They can put in a picture hook and remediate it afterwards, because that is their obligation—to put it back to the same condition. It is not that hard and the landlord should not be able to say no in those circumstances.

The Hon. S.G. WADE: I am happy to defer to the Hon. Mr Hood if he would prefer but if I may by way of partial response, as we progress this item, let us remember that what might be minor to all of us might be very significant to the landlord. A lot of people inherit estates and, for a period, they may have no intention of occupying it but that place means an awful lot to them and they intend to take it. It is a family home, perhaps, that they grew up in; they do not want it transformed.

For example, the carpet that was on the bedroom floor when they grew up might be a minor matter to a residential tenancies tribunal, it might be a minor matter to the tenant, but for that person, that might be the most important object in the whole house. This is private property. If the person who comes to tenant a property can object after the event—not even say when they come in, 'I hate this carpet; I am not going to take it with it,' but object after the event—how can we say, 'No, the Residential Tenancies Tribunal thinks that carpet is minor.'

We have to remember that this is private property. This parliament has a duty to protect not only, shall we say, the private property rights of individuals but also their aesthetic and virtue values, if you like. That includes family heritage, not just whether a tribunal thinks a carpet matters.

The Hon. D.G.E. HOOD: I think the Hon. Mr Wade has put it very succinctly. Family First will be supporting the opposition amendment.

The Hon. A. BRESSINGTON: I will also be supporting the Liberal Party amendment. I think we are treading on very dangerous ground here, where we start prescribing to people who own a property and who, in many cases, are basically doing a community service by making houses available for people to rent and have a roof over their head. For those landlords now to lose control of what decisions they can and cannot make about their own property, I think, is treading on very dangerous ground, so I will support the amendment.

The Hon. J.A. DARLEY: I would like to ask a question. If the Hon. Stephen Wade's amendment gets up, does that have any impact on the Hon. Mark Parnell's amendment? The other thing is that I have to disclose that I have an interest: I do have rental properties and, touch wood, I have never experienced that sort of problem in all the time that I have been renting properties, so I will not be supporting the Hon. Stephen Wade's amendment.

The Hon. S.G. WADE: If I can be so daring as to respond on behalf of perhaps the Hon. Mark Parnell; I am not sure where the question was directed. The fact is that the Hon. Mark Parnell's amendment subsequently does rely on this clause but, as I will say in the context of the Hon. Mark Parnell's amendment—and I am happy to say it now if it will facilitate the committee—my view is that, whilst the Liberal Party shares the commitment of the Hon. Mark Parnell and Greens SA to ensure that people have access to the NBN, we do not believe that his amendment will do that.

We will be supporting the amendment at the appropriate point not because we think it works but because we want to put a stake in the ground. There are recommittal matters that we will be coming back to later, and I think the NBN amendment is one such amendment. We will be seeking the support of the committee to maintain the private property and other rights of South Australians. After all, why should the tenant have the right to access the NBN but the landholder does not have the right to control their own property? Let's have a balance of interests here.

Let me say again that I think the government has basically given us a very good bill. This is a good balance of the interests of landlords and tenants. I think this is one where we are going completely out of whack. I appreciate that the amendments are in opposition to the government at this point and that our support for the Parnell amendment at a subsequent point is not sustainable before we put this bill through the third reading, but as we often do—I often ask the council to put a stake in the ground so the government knows what interest this council is willing to stand up for—I urge the committee at this point to stand up for the rights of landlords to maintain their own property.

We hope that the whole committee will be standing together at the Greens' amendment to stand up for the rights of tenants to have access to basic infrastructure.

The Hon. M. PARNELL: I do want to address a little of what the Hon. John Darley said as well. We need to keep this in some perspective. The first thing to notice is that the status quo is that a tenant must not, without the landlord's written consent, make an alteration or addition. That is your starting point; there are no ifs or buts. The landlord has an unfettered ability to say no, they can refuse to sign any piece of paper.

What the government is proposing is just to add some words, 'which must not be unreasonably withheld'; that means that if the tenant puts in what they consider to be a reasonable request. Bear in mind that there are subsequent parts of section 70 which say that the tenant has to fix up any damage—for example, if you put a hole in the wall that it has to be repaired or you have to compensate the landlord for the cost of repairing it if you do not do it yourself. I just raise the picture hook because I think that for all of us who have ever rented it has always been an issue that has been raised and does cause tension.

The Hon. Stephen Wade talked about the carpet. Let's test that a bit more. Let's say the tenant decides that they want to, at their own expense, replace the carpet and the landlord says, 'No, that has great sentimental value. I want that carpet to be there. It's my house. I want to perhaps move back in at some stage and make it my home.' If the tenant did not accept that they were not going to be allowed to replace the carpet, it could end up at the Residential Tenancies Tribunal, which would then make a judgement about what was reasonable. I would be quite amazed if, having put the position the Hon. Stephen Wade put—in terms of the house, their future plans for it, the sentimental value—the tribunal said, 'No, we are going to force you to agree to the replacement of the carpet.' I just do not see it working like that.

I think that what the government is proposing is sensible and does actually say to landlords, 'Yes, it's your property. Yes, it's your house, but it is someone else's home for the time that they are renting it and they should be allowed at least to ask for permission to fix something up,' such as in the example of the handrail or whatever, bearing in mind that they have to remedy any damage they cause—they have to plug the holes, repaint and do all that sort of stuff. If the landlord ultimately takes possession back and does not want the handrail in the bathroom, well, it will have to be reinstated, it will have to be fixed and it will be at the tenant's expense. So, I think this is a reasonable amendment.

In relation to broadband, which we will get onto soon, my amendment does cross-reference the words 'unreasonably withheld', but I do take the Hon. Stephen Wade's point, that if his amendment is successful now we are going to have to revisit the broadband issue later. But I think we can have both: I think we can have the new provision that the government is proposing, I think that makes sense, and we can strengthen it with my broadband amendment to follow.

The Hon. J.A. DARLEY: I would like to thank the Hon. Stephen Wade for his clarification and, on the basis of that, I will be supporting the amendment.

The Hon. S.G. WADE: I thank the honourable member for his support, and I will very briefly respond to the Hon. Mark Parnell's comments. We are trying to make the residential tenancy jurisdiction work for landlords and tenants; why would we load it up with ongoing debates about matters of degree? Why would we put landlords at huge risk to try to recover costs to make properties right after a tenant left? I seek the support of the council for this amendment.

Amendment carried.

The Hon. M. PARNELL: I move:

Page 20, after line 41—After subclause (1) insert:

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

(1a) A landlord will be taken to have unreasonably withheld his or her consent to an alteration or addition to the premises if he or she does not consent to an alteration or addition that is necessary to enable connection of the premises to the National Broadband Network.

I took the opportunity late last night after we had risen to email all members with some additional information because, when I originally had this amendment drafted, I did so on the basis of interstate experience where it was found that landlords were refusing—or neglecting, it is probably fair to say—to sign the NBN sign-up forms as the NBN was being rolled out through their areas. If you look at some of the interstate media, you see that areas that had a very high proportion of home ownership had a very high uptake of the NBN; in those that had a higher proportion of rental properties it was lower. I think it was Brunswick, from memory, where it was only about 50 per cent and part of the problem was landlords not signing the form.

The way the NBN works, as members would know, is that it is a free service. Well, it is not free to taxpayers—it is a very expensive service overall, but it is free when it comes past your house. There is a small white box which is installed, usually where the phone comes into the house but I think in other circumstances you would want to put it around the side. If it is a heritage property, you would not want it on the front. In some situations undergrounding is possible.

Basically the idea behind my amendment was to use those words which we have now removed about 'unreasonably withheld' and to say it is unreasonable for a landlord to say no to the free broadband connection. As I pointed out to members in my email, this was in fact the submission that was made to the state government by the commonwealth department of broadband communications and the digital economy. The words—and the Hon. Stephen Wade referred to this—in the action component of the commonwealth department's letter to the state government are:

To help tenants to access the NBN (and other telecommunications services), South Australia may wish to consider including similar provisions in the Act, at least when it comes to telecommunications facilities.

By 'similar provisions' they refer to a chart in an attachment which talks about the different approaches that have been taken to it, but what they have in common is the idea that it would be unreasonable for a landlord to say no to the NBN connection.

The other bit of information that I wanted to point out to members is that when the NBN is rolled out, ultimately the copper wires are going. Whether they are physically removed or just turned off at the exchange, you lose your phone. If you do not connect to the NBN, if you do not have those fibre optic cables coming to your house and connect up, you eventually will lose your phone. We can talk about what are the essential elements of a liveable home, and we can talk about hot water and we can talk about a flushing toilet, but I have to say that these days being connected to the world through either internet or even more basically than that through telephone is pretty fundamental.

So, what my amendment would do is attach connection to the broadband to this concept of the landlord not unreasonably withholding permission to connect and it would give the tenant the ability if a landlord says no to ultimately end the lease and find somewhere to rent that does have the NBN connection if that is important to them. That was the thinking behind my amendment. I appreciate the Liberal position is to support this concept but we may now need to revisit the words because my amendment does cross-reference words that we have just removed from the legislation, so I ask the government to commit to recommitting this clause in the event that my amendment is successful.

The Hon. S.G. WADE: Thank you for the opportunity to speak after Mr Parnell, because I would like to flag that I do not think we have one problem but two. The Hon. Mark Parnell is rightly highlighting the point that his amendment was on the assumption that the government's previous amendment would get up. I do not think that is insurmountable at all: I have great confidence in parliamentary counsel. To say that subsection (1) does not apply in relation to the NBN I am sure is quite possible, but to problem two.

Let me restate up-front, because I do not want the government to continue to misrepresent the Liberal position, as they have previously: the Liberal Party is very supportive of the principle of the amendment, but it is not convinced that the amendment, as currently drafted, will provide any additional support for residents hoping to be connected to the NBN. This amendment aims to allow tenants to access the NBN if they want to, regardless of the wishes of the landlord.

In practical terms there are very few reasons why a landlord would not want their house connected to the NBN as it adds value for no extra cost. Under the NBN neighbourhoods that have NBN infrastructure installed will have the old technology, such as copper cabling, removed within 18 months, effectively meaning that, if households do not opt into the NBN, they will have to rely on wireless mobile technologies. So it is in the landlord's direct interest to arrange for the installation of the NBN and, as I said earlier, I believe that tenants have the right to the tools of a modern life, and that includes assess to communications technology.

I have been advised by the office of the federal shadow minister for communications that they are unaware of any instances where a landlord has refused to have the NBN installed for their tenants. But, in practical terms, neither the Greens' amendment nor the government's 'reasonableness' amendment would have given the tenant any further rights to access to the NBN in our view. This is because our understanding is that the NBN in South Australia is an opt-in scheme: it requires the owner of the property to request it, but neither the government's nor the Greens' amendments compels the landlord to do anything.

The amendment proposed by the government simply puts a reasonableness test on what the landlord can stop the tenant doing. This is evident from the other provisions in the section which are all to do with a tenant taking action to make an alteration to the premises. There is nothing in these provisions that compels the landlord to make the alteration or do anything other than say yes or no. The paperwork to connect could still sit on the landlord's desk gathering dust: consent is not the same as compulsion.

The Greens' amendment would also mean that a landlord is breaking the tenancy agreement if they did not consent, allowing the tenant to take the matter to the tribunal or leave the property without the cost of a tenancy break. The Liberal Party agrees that tenants should have access to what is essentially a public amenity, funded by taxpayers and functioning in much the same way as a drain pipe, a sewer or electricity. However, this amendment does not treat it like that: it asks for lip service from the landlord.

We are open to continuing to work—and I thank the Hon. Mark Parnell for a stimulating exchange about how these provisions would work. Clearly we believe further work is to be done. I appreciate that the Hon. Mark Parnell does not interpret the operation of the NBN in South Australia in quite the same way, but these are matters in which we should engage the NBN. To cut and paste a couple of phrases from an attachment from a letter, in our view, will not make South Australian landlords respond to the needs of the tenants. We will support this amendment, but we believe that at a recommittal stage it will need to be redrafted.

The Hon. G.E. GAGO: The government has two issues of concern with this amendment and we therefore oppose it. First, the amendment seeks to define 'unreasonably withheld', and those words no longer exist in the act because members have just voted down our amendment that would have dealt with that issue. Secondly, no-one is obliged to connect their house to the national broadband network; therefore it is not considered appropriate to oblige landlords to consent to this, despite the rollout being free. In fact, such a connection would presumably increase the value of the property, so it is hard to imagine a landlord who would not avail themselves of this opportunity. Nevertheless, no-one is obliged to connect.

It is noted that in future the national broadband network is likely to be the only fixed line telephone option available. This is because Telstra will be decommissioning the existing copper network once the fibre network has been deployed. However, a landlord is not necessarily required to provide a telephone line to a rental property. People who do not connect to the National Broadband Network obviously can avail themselves of wireless connection.

However, it is noted that a landlord may be obliged to provide a fixed telephone line as part of an agreement, particularly if that agreement is already in place, and therefore the landlord may be required by that agreement to connect the property to the National Broadband Network.

The Hon. M. PARNELL: I would like to comment on what the minister has just said and then propose a way forward. The minister rightly said that there is no law which obliges a landlord to provide a fixed-line telephone service to a property. Of course, that is correct, but should there not be a law to prevent them pulling one out that is there? That is effectively the result if the landlord does not accept the broadband connection and the tenant ends up with something less than they had before.

My suggestion to honourable members as to the way forward—and, as the Hon. Stephen Wade has pointed out, we have some difficulties and the government has some concerns—is that if members support this amendment now, that is the trigger for recommittal. If we do not support the amendment now, there will be nothing much to bring back. So, I think we should, and Stephen Wade uses the words 'a stake in the sand—'

The Hon. S.G. Wade: No, just 'a stake'.

The Hon. M. PARNELL: Just a stake. It is not in the sand; his stakes are always in firmer foundation than sand, we would hope. If we can support this amendment now, we will come back with a different form of words that achieves what I think everyone is agreeing we want, that is, for tenants to be able to access the NBN.

Whilst we might not want to go as far as forcing a landlord to have that white box on the side of their house, we would at least need, I would suggest, to give the tenant the ability to bail out of that arrangement and go somewhere where they can get a service that is essential for their life. I urge all members to continue to support this amendment, and let's come back later and finetune it.

The Hon. G.E. GAGO: One of the points I was trying to make was that if a fixed line is pre-existing, that does in fact oblige the landlord to continue to provide a fixed line. What the Hon. Mark Parnell says is incorrect, and that is that we remove a pre-existing entitlement. In fact, that cannot happen under the current arrangements. If a fixed line is pre-existing, and the rollout comes and removes the copper wire and there is no longer a fixed line, the landlord, because it is pre-existing, is obliged to provide a fixed line. Therefore, they would be required to use the NBN.

I need to make sure that the record reflects what the current arrangements are and the current protections that are in place that entitle a person to pre-existing amenities.

The Hon. S.G. WADE: I appreciate the government does not want to accept the amendment of Mr Parnell because as it has concerns, as we have too. To avoid putting the stake in the ground, I wonder if we might make people feel more comfortable if the minister might be willing to agree that if the Hon. Mark Parnell was willing to seek leave to withdraw his amendment, on the understanding that we would recommit the clause, the government might put an amendment at that time and hopefully we will get the support of the council.

The Hon. G.E. GAGO: I think the honourable member is entitled to recommit anyway; the honourable member is entitled to do that of his own accord.

The Hon. S.G. WADE: Can I indicate on behalf of the opposition that we will be seeking to recommit this clause at a later date. To try to express goodwill (which apparently the minister is having trouble comprehending), I would suggest that we do not go to the point of putting a stake in the ground. Let's just understand that we are going to recommit this clause and discuss these issues further.

The Hon. M. PARNELL: In terms of the efficient use of the committee's time, the Hon. Stephen Wade has said that he wants to recommit it, I clearly want to recommit it, the government needs to recommit it. Let us not vote on it now. I will withdraw the amendment for now, and we will recommit and we will come back and debate it again.

The CHAIR: The Hon. Mr Parnell has sought leave to withdraw his amendment on the understanding that the amendment will be revisited.

Leave granted; amendment withdrawn.

Clause as amended passed.

Clauses 43 to 45 passed.

Clause 46.

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

Page 24, line 1 [clause 46(2)—Delete 'Section 73(2)—delete subsection (2)' and substitute:

Section 73(2) and (3)—delete subsections (2) and (3)

This is a simple drafting amendment.

The Hon. S.G. WADE: On that understanding, the opposition supports the amendment.

Amendment carried.

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

Page 24—

Line 2 [clause 46(2), inserted subsection (2)]—Delete 'subject to subsection (3)' and substitute:

in relation to rates and charges for water supply

Lines 11 to 19 [clause 46(2), inserted subsection (3)]—Delete subsection (3)

Amendment [Hood-1] 7 is the operative amendment, and amendment [Hood-1] 6 is consequential on [Hood-1] 7. This is a simple amendment in terms of what it does to the bill. It simply removes subsection (3), lines 11 to 19, from the bill. Subsection (3) provides:

(3) A tenant is not required to pay rates and charges for water supply if—

(a) the landlord fails to request payment from the tenant within 3 months of the issue of the bill for those rates and charges by the water supply authority; or

(b) the tenant has requested from the landlord a copy of the account for the rates and charges and the landlord has failed to provide the copy to the tenant within 14 days of the request and at no cost.

At first reading, that probably sounds reasonable, but you can imagine various circumstances. When I took these issues to the various landlord bodies, they raised a couple of issues that I thought legitimate and therefore required further examination of this issue.

Paragraph (a) talks about the fact that requests need to be asked for within three months. I guess that, in a philosophical sense, I object to penalties applying for what is a relatively short time. Someone could be overseas for three months, and there could be other arrangements in place for that period of time.

If that were the case—if someone was overseas for three months and one day, or something like that—that landlord would then cease to have the ability to charge the tenant at all for their water bill during that period, and it may be a very substantial bill. We could be talking about a property with very large grounds that required frequent watering or something of that nature, and the bill may be very substantial. I do not see why we would create loopholes for people to avoid these things. I am not suggesting that anyone would misuse that, but I think that we are creating a potentially disadvantageous situation for the landlord unnecessarily. That is the paragraph (a).

Paragraph (b) is, I think, even more difficult to justify, and that is that the landlord has 14 days to provide a copy of the bill, upon request from the tenant. Fourteen days is a very short time indeed. Someone could be overseas or sick in hospital, or someone could have potentially misplaced the bill for a couple of weeks. These things happen in the real world. I think that to take away the capacity of that landlord to have any claim on that amount whatsoever for what may be a period of 14 days is not right, and my amendment simply removes that.

The question is: if the amendment passes, what is the situation? The situation then is that those issues are removed from this bill and we revert to the current situation, which is that common sense applies and there are none of these time limits put in place. I do not support having that in the bill, and my amendments take them out.

The CHAIR: I advise the committee that we have a number of amendments standing in the name of the Hon. Mr Hood and the minister, so we are going to have to be a bit careful about working through them.

The Hon. G.E. GAGO: Thank you, Chair. The purpose of clause 46(3) is to ensure that tenants are billed quarterly, rather than, say, a very large lump sum annual payment, which can be a huge impost on a household; that is what can occur at the moment. That is what this is trying to do: it is trying to ensure that tenants are billed quarterly. We think that is fairer, less onerous and creates less of an impost.

It also means that the tenants are able to verify the charges by being able to request a copy of the original bill, which is fair enough. Removing the right to recover the water charges is considered reasonable to ensure compliance by landlords. Landlords have to pay their bills as well, and we do not believe that three months is unreasonable. Therefore, we oppose the amendment.

The Hon. D.G.E. HOOD: I do not object to what the minister has just said, but what she did not say was that the penalty for not providing a bill on a quarterly basis is the lack of ability to charge that bill at all.

The Hon. M. Parnell: Yes, that's the whole point.

The Hon. D.G.E. HOOD: Well, if somebody happens to be overseas for a period of time, or whatever it may be, why should they lose the right to forward that bill on? Why should they lose that right? That is the point I want to make.

I do not disagree with the general principle that someone should provide a quarterly bill but, if that is what the government's aim is, that is what it should say in the bill. That is not what the bill says. The bill says that they have to provide a bill every quarter and if they do not they lose the capacity to charge the bill at all.

The Hon. S.G. WADE: As I said earlier, the opposition basically regards this bill as a good balance between the obligations of landlords and the obligations of tenants. We actually support the government position, and we will be opposing the amendment because we believe that the government's provisions ensure transparency from landlords about the charges being passed on.

I take the Hon. Mr Hood's comments about 'within three months of receiving a bill' but, under these provisions, if a landlord includes a copy of the water bill in the initial request for payment, the 14-day request period provision is redundant. The amendment in the name of the Hon. Dennis Hood is proposing to remove the obligation of the landlords to provide a copy of the water bill in the account and allow the landlords to take longer than three months to pass on the cost of water once they have received the bill.

I agree with the points the honourable minister has made in relation to avoiding onerous 12-monthly piles. As the minister said, that would be a huge impost on tenants. Also I would suggest that it is in the interests of tenants to get regular payments. My memory is not as good as that of other honourable members, and if you were to ask me what happened 12 months ago that might have led to a spike in my water bill I might not be able to tell you. Also, 12 months later, the water company may not be willing to review it.

I also think that in a way this protects the landlord because, for example, it the tenant says, 'No, that wasn't me; it must have been you. There must be a leak in the property somewhere,' it could actually fall back on the landlord. I am not clear on that, but certainly I think the issue of reviewability, together with the point the minister made about the huge cost, and together with the point the minister made about verification, suggests to the Liberal opposition that the bill as it stands, without amendment, is well founded.

The Hon. D.G.E. HOOD: I can see the numbers are not with me on this. That is fine; I seek leave to withdraw the amendment.

Leave granted; amendment withdrawn.

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

Page 24, line 2 [clause 46(2), inserted subsection (2)]—Delete 'subsection (3)' and substitute:

subsections (3) and (4)

I am advised this amendment is consequential to the Statutes Amendment and Repeal (Budget) 2012 Bill in relation to the once-off 2013 water rebate.

Amendment carried.

The Hon. D.G.E. HOOD: All subsequent amendments on my behalf are consequential, and I will not be moving them.

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

Page 24, after line 19—After subsection (2) insert:

(3) Section 73(4)—delete 'must, as soon as is reasonably practicable after obtaining the benefit of the water security rebate amount, ensure that an amount borne by a tenant under an agreement under subsection (2) or under subsection (3)(b)' and substitute:

must ensure that an amount borne by a tenant under an agreement under subsection (2)(a) or under subsection (2)(b)(i)

(4) Section 73(6), definition of water security rebate amount—after 'those rates and charges' insert:

(whether before or after the commencement of this definition)

The Statutes Amendment and Repeal (Budget) 2012 Bill introduced a once-off water rebate, and this amendment seeks to make the rebate provisions retrospective to ensure that tenants obtain the full benefit of the water rebate.

The Hon. M. PARNELL: My question of the minister is: how will tenants be made aware of their right to actually have the rebate returned to them in relation to water bills they have paid or of their entitlement to it? What will be the mechanism for tenants knowing that they have this rebate coming to them?

The Hon. G.E. GAGO: I am advised that CBS conducted an education campaign targeted at tenants advising them and educating them about their right to a rebate.

Amendment carried; clause as amended passed.

Clauses 47 to 51 passed.

New clause 51A.

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

Page 25, after line 38—After clause 51 insert:

51A—Amendment of section 80—Notice of termination by landlord on ground of breach of agreement

Section 80(2)—after paragraph (c) insert:

and

(d) if the tenant gives up possession of the premises—

(i) the landlord is entitled to compensation for any loss (including loss of rent) caused by the termination of the tenancy (but the landlord must take reasonable steps to mitigate any loss and is not entitled to compensation for loss that could have been avoided by those steps); and

(ii) the Tribunal may, on application by the landlord, order the tenant to pay to the landlord compensation to which the landlord is entitled under this paragraph.

I will be brief because I understand that the government is supportive of the amendment. During consultation on this bill, the Liberal Party consulted a number of stakeholders, including the Real Estate Institute of South Australia.

REISA is concerned that the act as it stands allows a tenant to vacate a property without incurring the cost of a leaseback by defaulting on rental payments. This escape clause is clearly unacceptable, and our view is that it should be remedied. While it may be the case that tenants in this predicament might not have the ability to pay, for those who can it is vital that landlords have the means to seek the payments they are entitled to.

We understand that the government has consulted the relevant government agencies, and they have advised that what we propose will address the concerns raised. Our amendment provides for the landlord's reasonable losses to be covered by the tenant. It is fair that tenants who leave the landlord unreasonably out of pocket should have to wear that cost. I commend the amendment to the committee.

The Hon. D.G.E. HOOD: Family First supports the amendment.

The Hon. G.E. GAGO: The government supports this amendment. It has been proposed during consultation that, where a tenant vacates a property after receiving a breach notice, the landlord should be able to be compensated for their reasonable losses due to the early termination of the tenancy agreement. There was a strong response in favour of this recommendation. It was also submitted that, while landlords should be entitled to compensation in these cases, it should be subject to proof that the tenant has actually abandoned the premises.

As a solution, it was decided to amend the existing abandonment provision under the act by introducing criteria to be considered by the tribunal in determining whether a property has been abandoned by the tenant. This is contained within clause 62 of the bill and includes a failure to pay rent and evidence suggesting that the tenant no longer resides in the premises. Section 94 of the act already provides that, if a tenant has abandoned the premises, the landlord is entitled to compensation for any loss, including loss of rent caused by the abandonment.

The amendment proposed by the Hon. Stephen Wade seeks to reintroduce the original proposal released during consultation, that is, to enable landlords to be compensated for their reasonable losses due to the early termination of a tenancy agreement where a tenant vacates after receiving a breach notice. The honourable member's amendment specifically relates to a breach through rent arrears. One problem is that, in many cases where a tenancy has been terminated through a breach notice, it is unlikely that the landlord will be able to recover further compensation from a tenant who has been unable to pay their rent. This is one of the reasons why the proposal had been originally rejected.

Although the proposal does raise concerns about hardship for tenants who are already struggling with their obligations, these can be mitigated through requiring landlords to apply to the tribunal for compensation, thus proving that they are entitled. It is acknowledged that, when a tenant deliberately enters into a rent arrears in order to avoid break lease costs, the landlord suffers a great loss through vacancy and reletting costs, as well as rent arrears, that force the eviction. For this reason the government supports the amendment.

The Hon. J.A. DARLEY: I understand this amendment would address situations whereby tenants intentionally stop paying rent so that the lease can be effectively terminated. Whilst I do not know to what extent this practice occurs, I appreciate that it would have a detrimental impact on landlords and, to that extent, I am certainly sympathetic of this situation. Obviously this could also impact a tenant's ability to rent new premises in terms of being blacklisted.

Can the government advise what feedback it received during its consultation with stakeholders, particularly the Real Estate Institute of South Australia, with respect to this issue generally? Again, whilst I am very sympathetic to this amendment, I would like to know whether it is intended that the tribunal will consider issues of financial hardship in making an order for compensation? We know, for instance, that in minor civil matters, defendants who can establish hardship may be ordered to repay a debt by way of affordable instalments.

New clause inserted.

Clause 52 passed.

Clause 53.

The Hon. M. PARNELL: I move:

Page 26, lines 7 to 19—Delete the clause and substitute:

53—Repeal of section 83

Section 83—delete the section

This is the most significant of the amendments that I will be moving to this bill and it does go to the heart of the fairness of the relationship between landlord and tenant. It goes to security of tenure and in particular the security of tenure of people who are on periodic tenancies, that is those who are not in a one-year tenancy or a two-year tenancy but are simply on a periodic basis. The question that arises is: under what circumstances should the landlord be able to end that arrangement? The act makes it quite clear in section 81 that there is a list of legitimate reasons that a landlord can end the tenancy and I will just go through them.

The landlord requires possession of the premises for demolition.

That can give rise to an ending of the residential tenancy such that the tenant has to move out—they want to demolish it. Secondly:

The landlord requires possession of the premises for repairs or renovations that cannot be carried out conveniently while the tenant remains in possession.

So that makes sense as well. Thirdly:

The landlord requires possession of the premises for the landlord's own occupation.

in other words they want to move back in themselves or even move in for the first time themselves, maybe that is the inherited property situation. The list continues:

The landlord requires possession for occupation by the landlord's spouse, child, parent or the spouse of the landlord's child or parent.

They are all legitimate reasons. Section 81(1)(d) states:

The landlord has entered into a contract for the sale of the premises under which the landlord is required to give vacant possession of the premises.

So if you are selling the property, that is a good reason. And the last one is:

The landlord requires possession of the premises for a purpose prescribed by regulation.

Now, that is a catch-all provision which says that the government can, in regulation, prescribe any good reason that it wants to allow a landlord to end a tenancy agreement, so a list of all the reasons. As if that list I read out is not enough, the government can add to the list of reasons that a landlord can use for ending an agreement.

If that was the situation, that would be fine if the law of South Australia said that landlords have to have a reason to be able to end a tenancy agreement, but that is not what the law of our state says. What the law of our state says in section 83 is that a landlord can give notice of termination to the tenant without specifying grounds of termination. In other words, you are out and we are not going to give you any reason and we are not obliged to give you any reason. The only thing we have to tell you is that you have three months to move out.

I can tell you as a fact that, having worked in this field for some time, that is the clause that is used for retaliatory evictions. The landlord does not like you for whatever reason, they can give you three months' notice and you are out. It does not matter that there is no reason and it does not stop them reletting the premises once you are gone. Three months' notice, you are out, no reason need be given.

In my second reading contribution I referred to the submission of Shelter SA. They want to see this clause gone. The case for removing section 83 is even stronger than that because the government is calling for it. The government's own agencies are calling for the deletion of section 83. You go onto the Attorney-General's website (the minister referred to that before), look at the government of South Australia Department for Communities and Social Inclusion's submission. What that submission says on page 4 under the heading 'Termination of agreement' and keep in mind this is the government's submission to the government:

The discussion paper is silent on s83 of the Act which currently allows landlords to evict tenants without a cause, provided they give at least 90 days' notice. However, Housing SA would like to see this provision abolished to remove the potential for 'no cause evictions'—in the interests of providing better security of tenure and the potential for long term tenancies.

Here we have a situation where the government agency responsible for housing, Housing SA, under the auspices of this submission from the Department for Communities and Social Inclusion—another part of government—where you have the government telling the Attorney-General to get rid of section 83 because it leads to unfair outcomes. It is not as if a landlord having rented a premises out is obliged to keep renting it out forever and ever. There needs to be a list of circumstances that give the landlord the right to end the agreement, and that is the list that I have read out which includes the catch-all provision of whatever else the government thinks is a good reason. Add it to the regulations.

However, the idea that a landlord can simply say to a tenant who had paid their rent punctually, they have paid all their bills and they have not caused one iota of damage, they have not caused any inconvenience to any of the neighbours, they have done absolutely nothing wrong, and the law of South Australia says give them 90 days' notice and you can get rid of them. I say it is used for retaliatory purposes because I know it is. The tenant starts talking about the repairs—and we have had a debate about the repairs—that the dishwasher is not working, the stove is not working, the hot water is leaking, and the landlord can form a view that 'I reckon I can find someone out there who is not going to harass me for repairs, they are not going to harass me to keep the place liveable. I am going to send these people packing and I don't have to give them any reason. They might complain that it is retaliatory but they cannot prove anything. I am within my rights to end the tenancy agreement after three months and that is what I am going to do.'

This goes to the heart of security of tenure. There has been discussion already about why we don't have a culture of long-term renting in this country. In European countries they rent from generation to generation, the same house for 100 years I have heard about, but in South Australia we have this ability for the landlord after three months to say, 'You are out and I am not going to give you a reason.' If members are looking for a reason why they should support this amendment, look at the submission from the Department for Communities and Social Inclusion and they cross-reference Housing SA who also want this to go, and that is on top of the other submission, Shelter SA, various academics who work in this field.

This is an appalling provision in South Australian legislation. It is time for it to go and, just for the benefit of members, I will be dividing if I do not get the call on this one.

The Hon. G.E. GAGO: The government opposes this amendment for very good reason. It is quite clear that this amendment seeks to protect tenants on periodic agreements from being evicted for no reason. However, it is most likely that most parties who actually enter these periodic agreements, rather than a fixed-term agreement, do so because they require flexibility over accommodation arrangements. We are a very mobile workforce: there may be family commitments that may not be able to be foreseen, so people would choose a periodic arrangement so that they have more flexibility in their work arrangements, and so on.

These arrangements are often sought out by tenants and something they prefer over a fixed arrangement. If the Hon. Mark Parnell's amendment is carried, it is doubtful that landlords would agree at all to enter into periodic agreements with a tenant if section 83 were to be repealed. It is likely that it would be withdrawn as an option in most cases. What landlord would want to go down that path if they did not benefit from flexibility as well? I is a flexibility that exists for both parties.

It is considered important for landlords to be able to retain the means to end a periodic agreement, and therefore the government opposes this amendment. Tenants are able to choose what sort of lease arrangements they want to enter. In our culture, people do not choose to have long leases; tenants generally do not favour them for personal reasons and because of the flexibility afforded to them with shorter or periodic leases. The likely outcome would be that this option being withdrawn altogether if the Hon. Mark Parnell's amendment succeeded.

The Hon. M. PARNELL: I will respond to what the minister says, and I know the Hon. Stephen Wade wants to put his party's position. I reject the minister's analysis. A more typical scenario is a situation where a tenant may enter into a fixed-term tenancy. My first tenancy was for a six-month period when I first moved to Adelaide. We wanted longer, but they only gave us the six months. When the six months expires, the landlord does not want to commit and they say, 'Okay, you can just do it month to month,' and the tenant might want security of tenure.

This is not a simple contractual arrangement, where you go to the shop next door and buy it from someone who is going to give you a better deal. You have moved in, you are in the house, your kids are at the local school, you are established in that area, but the landlord says, 'No, I want to keep open my flexibility. I'm not going to give you another six months, another year or another two years; you're doing it month to month.' Will the landlord say, 'Oh, no, I'll move out then'? Of course they will not. Moving house is a significant issue for most people; it is an inconvenience for anyone who has ever had to do it.

As to getting rid of 'no cause' eviction, bear in mind that if the landlord has a good reason for ending the agreement, there are a list of reasons. If the government thinks the list is not big enough, add to the list in the regulations. The idea that, by passing my amendment, suddenly landlords will never again enter periodic tenancies is rubbish. I refer to academic studies that have been done based on real life examples that say that the decision about how landlords behave, in terms of whether or not they will be in the rental market, is all about negative gearing and returns on your investment much more than it is about the balance of rights and responsibilities between landlords and tenants.

It is very hard to see what disadvantage is caused to a landlord by making them have a reason before a tenant can be evicted. If you do not have a reason, then the suspicion (and it is very likely to be the truth, in most cases) is that your reason is an unacceptable one: it is to do with prejudice, it is to do with bias. It is not to do with anything about breaching the tenancy agreement; not paying rent, causing damage, or whatever. Does the minister have confidence in the Department for Communities and Social Inclusion; does she have confidence in Housing SA that they know what they are talking about when it comes to housing policy in this state?

The Hon. G.E. GAGO: We are an open government and different agencies have the right and responsibility to express their point of view. We are an open government and there are a range of views that are often expressed in these matters and we embrace that and try to balance the different points of view.

The Hon. S.G. WADE: The Liberal Party does not believe that the case for change has been made and we will not be supporting the amendment.

The Hon. D.G.E. HOOD: I respect the Hon. Mark Parnell's passion on this issue. Obviously, he has had some personal experience on the legal side of the matter, but we will not be supporting the amendment.

My view is this: as a landlord myself who has had a number of properties over the years—some of them quite inexpensive properties, some of them quite expensive properties—my experience has been that when you find a good tenant, you keep them and you do everything to keep them. There will be exceptions, I am sure the Hon. Mr Parnell could relate stories where injustice has been done, but certainly that is my experience on the whole and I think it should be within the landlord's right, within reason, to have the capacity, for whatever reason, as long as it is a decent one, to decide that some other tenant might be more suitable.

The Hon. J.A. DARLEY: I will not be supporting this amendment.

The committee divided on the amendment:

AYES (3)
Franks, T.A. Parnell, M. (teller) Vincent, K.L.
NOES (16)
Bressington, A. Brokenshire, R.L. Darley, J.A.
Dawkins, J.S.L. Finnigan, B.V. Gago, G.E.
Hood, D.G.E. Hunter, I.K. Kandelaars, G.A.
Lensink, J.M.A. Maher, K.J. Ridgway, D.W.
Stephens, T.J. Wade, S.G. Wortley, R.P.
Zollo, C.

Majority of 13 for the noes.

Amendment thus negatived; clause passed.

Clauses 54 to 57 passed.

Clause 58.

The Hon. M. PARNELL: I move:

Page 28, line 27 [clause 58, inserted subsection (1a)(b)]—Delete '2' and substitute '4'

The intent of this amendment is to expand the number of rent defaults that are required before the fast-track eviction process can be instituted. My amendment proposes to increase the number to four. Shelter SA supports the amendment I have moved, and what Shelter SA says in its submission is as follows:

It is acknowledged that tenants who are living with rental stress (that is, paying more than 30% of their household income in rent) and who are required to increase their rental payments a first or second time would potentially find it impossible to further increase their payments by even a small amount. For landlords, a tenant's third experience of rental arrears potentially places them in a position where they will never recover the rent arrears. Anecdotally however, some public and community housing tenants who are in rent arrears have been able to successfully address rental arrears, but only given a much longer time frame.

So, that is what it is about; it is about giving tenants longer to be able to get on top of their rent arrears situation.

I also refer members to the submission from Adjunct Associate Professor Michele Slatter from the Centre for Housing, Urban and Regional Planning at the University of Adelaide. What the professor says in her submission is as follows:

...this accelerated procedure should not be available after only 2 previous delayed payments. In the current (and likely future) employment market the proposed change would be harsh and oppressive. Landlords have the capacity to protect themselves by means of landlords' insurance against losses from tenancies. They can claim the costs of professional assistance as a tax deduction. They may well also enjoy the advantage of negative gearing. In creating a new balance between the parties appropriate to the post-GFC 21st century, these realities of risk must be observed.

It is questionable whether any such accelerated procedure is 'appropriate'. If some change is made, a history of 4 previous Form2 [that is, the default form] in 12 months would be a more reasonable suggestion.

I have moved this on behalf of experts in the field whose intention is to give tenants every possibility to get on top of their rental situation before they face eviction, which is the inevitable consequence, at the end of the day, of not paying your rent. The Greens seek to postpone that end of day situation for a little longer than is proposed in the government's bill.

The Hon. G.E. GAGO: The government opposes this amendment. As the Hon. Mark Parnell has outlined, his amendment seeks to increase the number of breach notices required to be served in the previous 12 months, from two to four. Clause 58 of the bill is aimed at making it easier for landlords to evict tenants who habitually breach their agreement by being behind with their rent payments.

Allowing for the service of two breach notices is considered fair and reasonable in these situations. Often a payment plan remedies the problem, which is an option for the tribunal to set up rather than making it an order for vacant possession. What this bill seeks to do is to balance the interests of both the landlord and the tenant, and we believe that two breach notices is a fair and reasonable position.

The Hon. S.G. WADE: Do the minister's comments suggest that the capacity to pay issue the Hon. Mark Parnell made in relation to community housing and other organisations could be addressed by the tribunal?

The Hon. G.E. GAGO: No.

The Hon. S.G. WADE: The opposition believes that the government's bill is an appropriate balance, and we will not be supporting the amendment.

The Hon. D.G.E. HOOD: Just for the record, Family First will not be supporting the amendment.

The Hon. J.A. DARLEY: I will not be supporting the amendment.

Amendment negatived; clause passed.

Clause 59.

The Hon. M. PARNELL: I move that this clause be opposed. This amendment seeks to restrict the range of people who can bring third-party eviction proceedings against tenants to make sure that the list of those persons is confined to those who are directly affected by the behaviour complained of. In other words, my amendment maintains the status quo.

In my second reading contribution, I made some observations about section 90 and its unique nature in contract law. I think I might have posed the question (I do not recall if it was answered) about whether there is any other example of where third parties can infringe the privity of contract, break into an arrangement between other people and end that contractual relationship. Maybe there are examples out there; I certainly do not know what they are.

We are talking about bad behaviour on the part of tenants. The existing section 90 says that those who are, if you like, the victims of that bad behaviour are able to go to the Residential Tenancies Tribunal and seek an order for eviction. The reason this is unusual is that normally in a contract between two parties either of those parties can seek to end the contract, but it is rare, if not unique, for a third party to come in and say, 'I want that contractual relationship between that tenant and that landlord to end on the basis of the bad behaviour of the tenant.'

We need not debate the scope of that behaviour. I think it is a mainstay of programs like Today Tonight, the 'tenant from hell story'. There are landlords from hell as well, but the tenants from hell story always gets a great run on television, and there are some neighbours you really would hate to live next to, there are some dreadful situations out there.

The position the Greens have taken on this is that, overwhelmingly, behavioural issues that are criminal in nature should be dealt with by the criminal law, and using third-party evictions as a tool often does no more than move the problem somewhere else. So rather than dealing with the bad behaviour for what it is, the tenant is evicted and ends up becoming a problem to someone else in a different neighbourhood. That is problematic.

However, whilst I have serious concerns, fundamentally, about section 90 I am not proposing to repeal that section. The section has been there for a while, and I have discussed it with members of the Residential Tenancies Tribunal. They assure me that they have very strict standards and requirements for proving the case, making sure that it is not just trivial neighbourhood disputes that end up in having someone evicted. So I will accept, for now, that the tribunal is dealing with them as fairly as it can, but do we need to extend it? Do we need to add to that list of people who can bring those third-party proceedings?

I will, again, read very briefly from the submission of Adjunct Associate Professor Michele Slatter from the Centre for Housing, Urban and Regional Planning at the University of Adelaide. She says:

Section 90 is a uniquely South Australian provision that allows third parties with no connection to the tenancy to bring eviction proceedings. It has no precedent, parallel or support in orthodox tenancy or contract law.

She then includes, in brackets, that it was adopted by the Northern Territory in 1999. So perhaps it is not unique, maybe the Northern Territory has taken it on as well; however, it is unique for South Australia and the Northern Territory, which was always part of South Australia, as we know, in earlier days.

The Hon. S.G. Wade interjecting:

The Hon. M. PARNELL: The Hon. Stephen Wade wishes it still was. The submission continues:

The tribunal has given a series of judgements which provide the section with some defining parameters but it remains a potentially abusive provision. Extending s90's availability to 'authorised officers' such as, but clearly not limited to, the police and CBS, is indefensible. Existing third-party status to sue is (very loosely) comparable with an action for nuisance. 'Authorised officers' act on behalf of the state. To include this unspecified and unconnected class of applicants as potential evictors appears [more] to treating housing issues as quasi-criminal. Where criminal issues arise there is plenty of scope for criminal actions. Section 90 should not be extended in this way.

The Greens accept that analysis from the professor. We are not seeking to remove all third-party eviction tools, but we do want to keep the list of people who can bring such action to those who are directly affected, not any other parties, including police and other government officers or even, for example, the body corporate where blocks of flats are involved. Let us keep it to those who are directly and personally affected.

People might say, 'Well, the police should be able to bring the action because that will save the neighbours from having to do it.' I can tell the committee that if the police do bring an action the neighbours will have to give evidence. There is no way that the tribunal will accept the police officer's version of the bad behaviour; they will have to hear from the people concerned. So it is not a matter taken lightly by the neighbours. They often need the courage of numbers, they often get together in a group and seek the eviction. If the intention behind this amendment is to have third parties who will not be intimidated by having to bring the action, I do not think it will succeed, because the people who are the actual victims of the bad behaviour will have to front the tribunal and give evidence. I cannot see how any successful application would otherwise work.

The Hon. G.E. GAGO: The government opposes this amendment. During the Hon. Mark Parnell's second reading contribution he argued that the provision is at odds with the doctrine of privity of contract, questioning whether there is any other area in contract law. I was pleased to note he answered his own question; the Northern Territory Residential Tenancies Act contains a provision similar to section 90 of the act.

A privity of contract may be overridden by statute. In this instance parliament has determined to enable interested persons to apply to an independent body for an order that the tenancy agreement be terminated. It is entirely within the powers of parliament to make such laws. It is important to note that section 90 provides a very high threshold before a tenancy may be terminated. It requires the tribunal to give the landlord an opportunity to be heard in relation to the matter and, if the landlord objects to the termination of the tenancy, the tribunal must not make such an order unless it is satisfied that exceptional circumstances exist to justify it.

Tenants behaving badly and abusing neighbours can cause significant problems in neighbourhoods. Those affected are often too afraid to make an application to the tribunal, as they are intimidated by the tenants. Expanding the definition of 'an interested person' would mean that SAPOL could initiate actions where there has been illegal activity and that Consumer and Business Services could act on behalf of neighbours who are too afraid to initiate action for fear of retaliation.

It is acknowledged that there is a need to balance the genuine fear of other residents against the right of a tenant to know who is making allegations against them and to challenge their evidence. Ultimately, the decision as to what action to take lies with the tribunal and it may be assumed that evidence provided to the tribunal would need to be sufficiently compelling to prove that termination of the tenancy is an appropriate order to make.

The Hon. S.G. WADE: The Liberal Party obviously respects privity of contract, but we share the view of the government that this clause as it currently stands in the bill provides a high threshold and only allows that privity of contract to be overridden in exceptional circumstances. Whilst the landlord's right to choose their tenant should be respected, it might also provide an opportunity for landlords who fear retribution to engage police to evict tenants who are using the property for criminal activity. This and other provisions need to be monitored in their operation and we look forward to that happening.

Clause passed.

Clauses 60 to 63 passed.

New clause 63A.

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

Page 30, after line 23—After clause 63 insert:

63A—Amendment of section 96—Forfeiture of head tenancy not to result automatically in destruction of right to possession under residential tenancy agreement

Section 96—after subsection (1) insert:

(1a) An order under subsection (1) must be served on the tenant and takes effect—

(a) in the case of an order made in favour of a mortgagee—30 days after the day on which it is served or at such later time as is specified by the court or the Tribunal; and

(b) in any other case—at such time as is specified by the court or the Tribunal.

(1b) If an order of a kind referred to in subsection (1a)(a) is made, the tenant—

(a) is not required to pay any rent, fee or other charge in respect of his or her occupation of the residential premises in the period following service of the order; and

(b) is entitled to compensation for any rent paid in respect of that period.

(1c) The Tribunal may, on application by the tenant, order a person to whom rent has been paid to pay to the tenant compensation to which the tenant is entitled under subsection (1b).

Section 79D of the act provides that a tenancy terminates if a person having title superior to the landlord's title becomes entitled to possession of the premises under the order of the tribunal or a court.

It was submitted that the existing provisions do not adequately protect a tenant who may be unexpectedly evicted from their home as a result of their landlord defaulting on their mortgage. This is because mortgagees go to the Supreme Court rather than the tribunal to obtain such orders and most tenants are too intimidated to appear in Supreme Court proceedings, even if they have been given notice of the action.

Tenants are therefore generally unaware that orders for possession have been made in favour of the mortgagee and they unexpectedly received a notice to vacate at short notice. Therefore, the amendment proposes that, whilst the tenancy terminates when the mortgagee becomes entitled to possession, the tenant has 30 days to move out upon receipt of the notice to vacate, during which time they are not required to pay rent. This short period of rent-free occupation is a form of compensation for the early termination of the tenancy.

The Hon. S.G. WADE: The Liberal Party supports the amendment as a fair balance of the rights of all parties.

The Hon. M. PARNELL: The Greens also support this amendment, but I just make the observation that, for any law students who are reading Hansard, when you study property law, you cannot possibly conceive of the relevance of the lectures they give you on prior legal and subsequent equitable interests and who has priority, but this is a clear example of where the parliament needs to step in and make sure that the balance is redressed because, simply left to the common law in terms of the priority of legal interests over land, injustice would be the outcome. The Greens are happy to support this amendment.

New clause inserted.

Clauses 64 and 65 passed.

Clause 66.

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

Page 34, after line 25 [clause 66, inserted Part 5A]—After inserted section 99B insert:

99BA—Extra-territorial operation of Part

(1) This section applies if—

(a) a person does an act, or makes an omission, outside the State in relation to personal information—

(i) about a person who resides in the State; or

(ii) relating to, or arising from, the occupation of residential premises in the State; or

(iii) entered into a residential tenancy database for reasons relating to, or arising from, the occupation of residential premises in the State; and

(b) the act or omission would constitute an offence against a provision of this Part if it were done or made by the person within the State.

(2) The person commits an offence of the same kind as that mentioned in subsection (1)(b) and may be charged with and convicted of the offence.

The bill adopts national model provisions for the regulation of residential tenancy databases (RTDs). The model provisions were the result of a national project to develop a harmonised regulatory framework for RTDs. The RTDs are often referred to as 'tenant blacklists' and have the power to affect a person's ability to secure rental accommodation.

The government identified an issue with the model provisions in relation to the enforcement powers of the tribunal against interstate operators. It appears that without the inclusion of an extra-territoriality provision, the offence provisions may only apply to conduct within South Australia. This is a concern because the major national RTDs operate outside this state. The same issue would apply to most other jurisdictions. To remedy this, the South Australian government requested that a national project be reopened with a view to amending the model provisions through the inclusion of an extra-territoriality provision.

The national teleconference was held on Monday 4 March 2013 during which the Queensland Residential Tenancy Authority, which was the original project lead, agreed to circulate a proposed extra-territoriality provision to be considered and adopted by all other jurisdictions. This is why the amendment was only recently finalised and placed on file. The amendment to include the extra-territoriality provision in the bill is important to ensure that the model provisions provide the proper protection that was envisaged for tenants.

The Hon. S.G. WADE: I have a question for the minister. I understood her to say that on Monday 4 March the Queensland authority was asked to distribute the clause for consultation. Is that the case, or was it that on that day agreement was struck on the proposed clause? I suppose another way of putting the question is: is the provision before us a draft provided by Queensland or an agreed clause with other jurisdictions?

The Hon. G.E. GAGO: I have been advised that Queensland drafted the original provisions. They identified this issue, and their drafters then drafted accordingly, distributed it and identified that other jurisdictions would need to adopt this provision.

The Hon. S.G. WADE: Was it agreed by everyone?

The Hon. G.E. GAGO: I am advised that the agreement was that it would be circulated to jurisdictions and it would be up to jurisdictions to decide because some jurisdictions had already put the model through and it might be too late for them.

The Hon. S.G. WADE: I should stress that the opposition supports the amendment. We support the other provisions in the legislation that engage South Australia in the 'national tenant blacklist'. In that regard it makes sense to facilitate the extra territorial operation of the act.

Amendment carried; clause as amended passed.

Clauses 67 to 79 passed.

Clause 80.

The Hon. D.G.E. HOOD: I had prepared two amendments but these are consequential on amendments that were defeated earlier, so I will not be moving them.

Clause passed.

Progress reported; committee to sit again.


[Sitting suspended from 12:58 to 14:15]


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