RPLT and the Tenancy WA Act

Transcription

1 Submission to the Department of Commerce Response to Statutory Review of Residential Parks (Long- Stay Tenants) Act 2006 September 2014 Page 1 of 12

2 About Tenancy WA Tenancy WA Inc. is an independent not-for-profit specialist community legal centre. We provide free, quality legal services to renters across Western Australia, including long-stay caravan park residents. As the Central Resource Unit of the Tenant Advice and Education Service program, Tenancy WA provides community legal education, professional development for tenant advocates, and law reform advocacy. In formulating policy responses, Tenancy WA undertakes research and consults with key housing stakeholders. Such stakeholders include Community Legal Centres, public sector bodies, Tenant Advocates, renters and other organisations that have an interest in each issue. Executive Summary Tenancy WA welcomes the opportunity to make a submission to the review of the Residential Parks (Long-stay Tenants) Act 2006 (RPLT Act) and acknowledges the substantial research and consultation undertaken by the Department of Commerce in preparing its second consultation paper. In developing this response, Tenancy WA undertook research and was involved in a number of consultation sessions. A joint community consultation session was held with Shelter WA on 31 July This session involved discussion on some of the key issues in the paper and was attended by park residents, operators, tenant advocates, and representatives from the Park Home Owners Association of WA and Caravan Industry Association of WA. Tenancy WA also consulted with members of the Tenancy Network, which include not-for-profit organisations such as community legal centres. We also had brief discussions with the State Administrative Tribunal on their submission to the review. In addition, we consulted with long-stay residents and visited them at their residential parks, in order to gain a practical sense of their issues. Based on our research and the feedback we have received, Tenancy WA provides the following main recommendations: Parties should be prevented from contracting out of fundamental rights and responsibilities within the RPLT Act. Greater security of tenure should be provided to long-stay tenants by removing without grounds provisions and by mandating minimum lease periods (with options) in the legislation. Long-stay tenants with periodic agreements that are being terminated should be entitled to compensation in particular circumstances, particularly owner-renters with a reasonable expectation of long-term tenure. Park operators should be allowed to terminate fixed-term agreements when entering into a contract of sale for the park, but only where long-stay tenants are given substantial notice and claim compensation for their reasonable costs.). Allow mortgagee possession of fixed-term and periodic agreements, provided tenants are given sufficient notice and reasonable compensation. Market review should be excluded as a means of calculating rent increases under fixed-term agreements. Page 2 of 12

3 Amendments to the Act should strike a good balance between the interests of long-stay tenants and park operators. Amendments must consider the nature of long-stay owner-renter agreements and the financial risks they are subject to. There should be funding for community legal education for long-stay tenants, to ensure they understand amendments, the RPLT Act and avenues for relief. Background Housing affordability pressures in this State are forcing an increasing number of marginalised people to seek out mixed-use and long-stay residential parks as a housing option of last resort. While a substantial proportion of long-stay tenants are retirees, many are people that are at risk of homelessness, victims of domestic violence, or otherwise excluded from public or private housing due to poor tenancy history (National Shelter, 2012). In 2012, National Shelter identified approximately 1,994 long-stay tenants in Western Australian caravan parks who were currently at-risk of homelessness. Many long-stay tenants at residential parks are on fixed low to medium incomes. Many of these people purchase their dwellings and intend on leasing the site for long term residence, often for the foreseeable future. Park dwellings are being increasingly seen as a more affordable housing option, particularly given the current median house price in metropolitan Perth is approximately $540,000 (REIWA, 2014). During community consultations, long-stay tenants voiced strong concerns that they currently have inadequate protections under the RPLT Act. Some of the common issues raised by long-stay tenants include: rolling short-term (89-day) contracts acting as a barrier to the protections under the RPLT Act; the need for greater security of tenure, particularly for owner-renters who can be subject to substantial financial costs on eviction; without-grounds terminations, with many tenants noting their reluctance to enforce their rights out of a fear of retaliatory eviction; issues relating to the sale of a park home, including interference by the park operator and assigning tenancy interests on settlement; fees and penalties, including visitor charges and exit fees; and unilateral variation of park rules by the park operator. Conversely, the majority of park operators in Western Australia are facing substantial demand and supply pressures. There are concerns for the ongoing viability of residential and mixed-used caravan parks, due to a number of factors, including (EISC, 2009): Redevelopment pressures, due to urban encroachment and rising land values; Changes in the types of facilities and accommodation demanded by tourists; Increase in proportion of long-stay tenants, amidst lack of public housing and affordable housing alternatives; and Increase in resource sector workers in regional areas, creating a shortage of urban and alternate housing. Page 3 of 12

4 Proposed amendments to the RPLT Act The Department s proposals seek to resolve many of the concerns raised by long-stay tenants and park operators. Many of the proposals in the consultation paper represent an opportunity to improve the rights and responsibilities of residential park residents and park operators. The review is also an opportunity to revise the RPLT Act for consistency with the equivalent provisions in the Residential Tenancies Act 1987 (RTA). At the time of its introduction, the RPLT Act was broadly consistent with the provisions of the Residential Tenancies Act 1987 (RTA) on common tenancy matters. Since this time, the RTA has undergone significant revisions that have strengthened some protections afforded to tenants. It is recommended for any amendments to the RPLT Act promote the interests of owner-renters. These individuals have made significant investments in their park homes, usually with the expectation of long-term tenure. It is reasonable for owner-renters to a higher degree of security of tenure than ordinary park tenants. Ordinary park tenants should have rights that are broadly consistent with those under the RTA. Tenancy WA also considers it important for amendments to strike an appropriate balance between the interests of long-stay tenants and park operators. Changes to the RPLT Act should not unnecessarily impose greater financial or administrative burdens on park operators. Tenancy WA Response 1. Contracting out - support proposal 8.1 Tenancy WA supports the proposal to prohibit any form of contracting out of the Act. The change will prevent inequitable tenancy contracts and will ensure all long-stay tenants have the same fundamental rights and responsibilities. The proposal is consistent with recent changes to the RTA. 2. Rolling short-term contracts support proposal 8.4 Tenancy WA received feedback from long-term tenants that some park operators issue short-term leases, possibly with the intent to evade the provisions of the RPLT Act. We have concerns that this behaviour precludes park residents from claiming the rights and responsibilities of a long-stay tenant under the legislation. We are supportive of the proposal for the RPLT Act to apply where the tenant has a clear intention to reside at a residential park for non-holiday use. However, in making amendments consideration should be given to what should be considered non-holiday and holiday use of a leased site (e.g. principal place of residence; minimum length of actual stay). Page 4 of 12

5 3. Disclosure requirements 3.1 Strengthening minimum requirements support proposal 9.1 and proposal 9.3, option B Tenancy WA is supportive of the Department s proposals to strengthen the RPLT Act s requirements for disclosure, particularly with regards to: disclosure of future developments and improvements to park facilities; exit fees; important financial arrangements (including mortgagee and holders of superior title); whether the park owner will allow the incoming long-stay tenant to assign their interests under the lease to a future purchaser of their dwelling; and any other representations that the tenant would likely rely on ahead of entering into an agreement. Tenancy WA agrees that park operators should provide ongoing disclosure to long-stay tenants where matters arise that may impact their tenancy, including but not limited to changes to the operator s licence, and matters relating to zoning or redevelopment of the park. As raised by Shelter WA, we endorse the view that disclosure be culturally and linguistically accessible, given some incoming residents may have difficulty understanding English. Park operators should be required to make efforts to ensure park residents understand the disclosure and should consider referrals to interpreter or support services, such as community legal centres. 3.2 Time-frame for disclosure support proposal 9.2, option B Tenancy WA believes there should be minimum time frames for disclosure to allow incoming longstay tenants to make informed decisions about the agreement. The time frame should be a reasonable period. A 10 day minimum period could be appropriate and would be consistent with the requirements under the Retirement Villages Act 1992 (WA). The change is also likely to prevent misunderstandings and potential disputes down the line. Tenancy WA believes that the legislation should allow a contract to be deemed voidable by the SAT where a park operator either misrepresents or fails to sufficiently disclose certain terms and their effects. 4. Minimum lease periods Feedback from long-stay tenants indicates a desire for longer leases, particularly given the prevalence of rolling short-term contracts and periodic tenancies. Tenancy WA supports amendments in-principle to create minimum lease periods to give long-stay tenants greater security of tenure. It is suggested this proposal is particularly important for ownerrenters, who have financial worries when their length of stay comes into question. A minimum lease period of 5 years may be appropriate and would be consistent with likely changes to licence periods under the Caravan Parks and Camping Grounds Act 1995 (WA). Page 5 of 12

6 We are mindful that that this change is likely to discourage park operators from entering into fixedterm agreements with owner-renters. As such, consideration should be given to other alternatives that balance interests of park operators and owner-renters. One possible alternative would be the introduction of shorter minimum lease periods, but with an option for the parties Tenancy WA considers it important for the Department to explore other alternatives that will incentivise uptake and encourage the Department to explore other flexible alternatives. alongside proposed changes to grounds for termination in the consultaito one alternative might be to consider introducing shorter minimum lease periods, but with an option to enter into further fixed-term contracts (e.g. 3 year minimum + 1 year rolling fixed term). We refer to arrangements under commercial tenancies, which have minimum terms. We note that both retail shop owners and owner-renters have similar capital investments locked-in to their tenancies. 5. Termination of long-stay agreements 5.1 Without grounds terminations support proposal 10.1, option C Security of tenure is the major concern for the majority of owner-renters, who are often unable to meet the costs involved to relocate their homes. It is also an important issue for people who rent both site and dwelling, who may be unable to access public and private housing. During our consultations, many park residents spoke of their reluctance to enforce their rights out of a fear of retaliatory termination by the park operator, which is consistent with some findings in the consultation paper. Tenancy WA supports the repeal of the without grounds provisions in the RPLT Act and believes this change will provide greater security of tenure to long-stay tenants. Tenancy WA also supports the inclusion of new provisions for operators to terminate periodic agreements under specific circumstances, such as park-closure or due to instances of serious tenant misconduct. When amending the RPLT Act, Tenancy WA requests that the Department give specific consideration to the following: 1. the park operator be prevented from enforcing any new termination provisions in an unreasonable or capricious way; 2. long-stay tenants are to be reasonably compensated when evicted in particular circumstances, such as park-closure or mortgagee repossessions. Issues regarding compensation are discussed later in this paper; and 3. The SAT retains power to hear disputes under the new termination provisions. 5.2 Termination of fixed-term upon entering contact of sale - support proposal 10.3, status quo. Tenancy WA believes park operators should be entitled to terminate fixed-term long-stay agreements upon entering into a contract of sale for the park, where vacant possession is required. However, where this occurs, the long-stay tenant must be reasonably compensated and given substantial notice to vacate. Page 6 of 12

7 Tenancy WA has concerns that a proposal preventing termination of a fixed-term agreement on park sale will make parks less attractive investment for purchasers, which may see park operators reducing the number of fixed-term agreements they offer at their park. 5.3 Mortgagee repossession in-principle support for proposal 10.4, option B Tenancy WA believes it is appropriate for a mortgagee to take on the obligations of the park owner when taking possession of the premises. However, it is important to acknowledge the need for a mortgagee to retain sufficient flexibility to take vacant possession of park land, provided that existing tenants are given substantial notice and reasonable compensation. It is suggested that amendments consider making changes that are broadly consistent with section 81A of the RTA. This section allows a mortgagee who is entitled to possession of the premises to terminate both periodic and fixed term agreements. However, in doing so, the mortgagee must give prescribed notice, rent free accommodation during the notice period. The tenant also has the ability to apply to the Court for compensation. Tenancy WA would be supportive of specific amendments to existing provisions of the RPLT Act to enable long-stay tenants to claim for compensation for costs incurred as a result of mortgagee termination. Disclosure amendments should ensure that both operator and long-stay tenant are aware of their rights where a mortgagee claims vacant possession of a residential park. 6. Recognition of tenants support proposal 10.5 Tenancy WA supports making provision for an individual to apply to the SAT for an order that they be recognised as a long-stay tenant. This change would be consistent with the RTA. 7. Compensation claims 7.1 Ending a fixed-term tenancy support proposal 11, option B or C Tenancy WA is generally supportive of amendments that give the SAT greater clarity when hearing disputes for compensation. While the RPLT Act already provides some factors to consider in determining compensation claims, the additional factors identified under option B would be a useful addition (e.g. loss incurred where relocation not possible). It is also recommended that amendments be consistent with the RTA, which requires a minimum notice period for a party to end a fixed-term tenancy. We consider a 180 day period to be appropriate and would provide sufficient time for both parties to make arrangements. Such an amendment has the potential to reduce disputes when ending a tenancy. New disclosure requirements should mandate that both parties be informed of this minimum notice period. Page 7 of 12

8 7.2 Relocation costs support proposal 11.4, option B Tenancy WA generally supports the proposal to allow parties to agree to compensation when relocating a site within a park. As per existing provisions of the RPLT Act, the parties should be able to apply to SAT to have disputes on this issue heard. 7.3 Compensation on termination of a periodic tenancy in-principle support proposal 11.2, option C Tenancy WA is broadly supportive of changes to the RPLT Act that would allow a periodic long-stay tenant, specifically owner-renters, to apply to the SAT for compensation where their agreement is terminated in circumstances where they don t receive the usual 180 days notice they can reasonably expect, such as terminations due to frustration or hardship. 8. Exclusion notices not supportive of proposal 13 Tenancy WA is not supportive of the proposal to establish an exclusion notice regime in Western Australia. We believe the existing provisions of the RPLT Act, urgent SAT applications and general access to police services should be sufficient to deal with instances of serious disruptive behaviour. It is undesirable to introduce a new tool to park operators that could potentially be used unreasonably or in a retaliatory way. In addition, Tenancy WA queries whether the notice would be enforceable in a meaningful way. Although urgent applications can be made to the SAT for instances of disruptive behaviour, Tenancy WA acknowledges that SAT orders can be difficult to enforce, particularly when they relate to restraining orders. Feedback from the SAT suggests that any breach of an order would need to be enforced by application to the Magistrates Court. 9. Amending park rules support proposal 14, option B Feedback from consultation sessions suggested strong desires for changes to park rules to be reasonable, fair and developed in consultation with long-stay tenants or their park liaison committee (if any). Tenancy WA is broadly supportive of the proposed requirements for park rules to be clearly expressed, applied fairly and for tenants to be given an opportunity to make comment on proposed changes. Tenancy WA also suggests consideration be given to allow transitionary arrangements where new changes to rules would unreasonably disadvantage existing long-stay tenants. An example would be changes to park rules to disallow pets on the premises, where a number of long-stay tenants have owned pets for a substantial period of time. 10. Variation of rent support proposal 15.2, option C Page 8 of 12

9 Tenancy WA recommends that changes to the rent variation provisions of the RPLT Act mirror those of the RTA, which generally require either the set amount, or the method for calculating it, to be included in the terms of a fixed-term long-stay agreement. This change is likely to give greater financial certainty to long-stay tenants, particularly those on fixed-incomes. We believe market rent reviews should not be permitted as an industry practice for determining variations, based on strong opposition from long-stay tenants and concerns that they are subjective and inaccurate. 11. Fees and charges 11.1 Exit fees support proposal 16.5, option B Tenancy WA is generally supportive of the proposal to regulate the use of exit fees and shared-equity agreements. The changes proposed in the consultation paper will bring greater clarity on the appropriate use of exit fees and how they should be calculated. Enhanced disclosure requirements will also ensure long-stay tenants have protection where a park operator fails to properly disclose how exit fees will impact on them at the end of the agreement Preparing the tenancy agreement support proposal 16.2 It is appropriate for the park operator to bear the costs in preparing a tenancy agreement Unforeseen costs support proposal 15.3, option A Tenancy WA considers it inappropriate for unforeseen costs to be passed on to long-stay tenants in addition to usual rent. Park operators should continue to plan for increases in taxes, land rates and utility costs as part of their usual business, and when entering into contracts with new residents. It is important to note that long-stay tenants retain the ability to apply to the SAT where they consider their rent excessive Visitor Fees support proposal 16.3, option C During community consultation, feedback received from participants indicated they are often charged visitor fees even when their guests do not use the shared facilities. Examples include owner-renters of self-contained park homes with a carer or young child staying for a brief period. Tenancy WA supports changes that would allow visitor fees to be charged, but only where agreed between the parties in their agreement or where the visitor have stayed at the site for a minimum period. Page 9 of 12

10 11.5 Electricity charges Feedback from park-residents and through our advice-line work suggests that many tenants are charged additional fees for some utilities, including meter-reading costs. In the first instance, Tenancy WA believes long-stay tenants should only be charged fees for their consumption only and consider this view consistent with the operation of the RTA s provisions. We request that the Department investigate the appropriateness of meter reading fees and other service charges when making its proposed amendments. 12. Maintenance and capital improvements 12.1 Services promised during negotiations support proposal 17.1, option B Tenancy WA believes a long-stay tenant should be entitled to apply to the SAT where a park operator fails to deliver services or facilities promised during pre-contractual negotiations, including orders for compensation, specific performance, rent reduction or termination. We are hopeful that the proposed disclosure changes will assist the SAT in determining disputes on this issue Maintenance and repairs support proposal 17.2, option B Tenancy WA is supportive of a statutory obligation for park operators to undertake necessary maintenance to ensure shared facilities are maintained to a reasonable standard, in addition to specific powers for SAT to make a performance order for work to be carried out where reasonable in the circumstances (e.g. having regard to age, character and life of the facilities). We believe park operators would not be unfairly impacted by this amendment if the proposed SAT power is broad enough to consider what is reasonable and justified in the circumstances Transparency of maintenance costs support proposal 17.3, option A Tenancy WA believes that maintenance and repairs should be funded out of a park operator s rental income, with no onerous requirements to report on how this money is expended. While increased transparency may give long-stay tenants a better understanding of how rental money is being used, there are already provisions in the RPLT Act and new proposals to apply for relief when a park operator fails to undertake proper maintenance work Capital improvements support proposal 17.4, option A Tenancy WA believes capital improvements should continue to be the park operator s responsibility as part of their usual planning and development. Capital improvements can improve the value of a residential park and benefit the park operator in the long-term Page 10 of 12

11 It is inappropriate for Tenants to start paying extra for capital improvements, given that rent should already contribute towards the costs. While a special levy is an interesting idea, it is difficult to see how this could be implemented in an equitable way. 13. Matters relating to sale of a park home 13.1 Advertising and assignment support proposals 18.1 and 18.2 Tenancy WA believes a owner-renter should always be able to advertise and sell their park-home or caravan on-site to potential purchasers, without undue interference from the park operator. The sale of a park home is often reliant on the ability for the incoming purchaser to lease its associated land. To prevent disputes and issues with settlement of park homes, we believe it is appropriate that park operators be prevented from unreasonably restricting an owner-renter from assigning their interests under a lease to a purchaser. Intentions around assigning the lease upon sale of a dwelling should be disclosed during precontractual negotiations Park operator involvement in sale process support proposal 18.4, option B Tenancy WA supports the proposal to require a park home owner to notify the park operator of a purchaser s details and for the park operator to provide disclosure information to the purchaser. This would be beneficial in a general sense, particularly for the purchaser Creation of tenancy rights for the purchaser support proposal 18.5, option D Consistent with the views expressed above, we consider it crucial that purchasers of park homes have some certainty of the likelihood of a lease. As such, Tenancy WA is broadly supportive of the proposal which gives an incoming purchaser the right to either enter into a new agreement or have the lease assigned. We are supportive on the basis that the park operators would not be required to enter into a new agreement if they have reasonable grounds for declining. Parties should be able to have disputes in relation to this matter heard on application to the SAT. 14. Park operator conduct support proposal Tenancy WA considers it appropriate to allow the SAT to consider the conduct of park operators in determining disputes and to consider matters in accordance with standards of the Australian Consumer Law, including misleading representations and deceptive conduct. 15. SAT considerations Page 11 of 12

12 While it is clear a number of disputes occur at residential parks, very few are resolved through use of the SAT. We understand there have been less than 80 residential matters heard by the SAT since the introduction of the RPLT Act, which is not reflective of the number of disputes that occur at residential parks. The reluctance to have disputes heard through the SAT may relate to perceptions amongst long-stay tenants that the SAT process is inefficient and cost-prohibitive, combined with a general anxiety that applications will provoke retaliatory terminations by park operators. However, the SAT can be extremely flexible when hearing disputes. For example, processes exist to allow magistrates in regional areas to act as a tribunal member where an applicant is unable to attend in Perth. In addition, applications relating to residential parks attract the lowest filing fee at 80 dollars, with the option to apply for an exemption. Proposed amendments to disclosure should mandate that long-stay tenants understand this flexibility, what can be enforced through SAT and how to make an application. Conclusion Tenancy WA believes many of the proposals in the consultation paper will lead to positive outcomes and better protections for long-stay tenants in Western Australia, many of whom are marginalised individuals. When implementing the proposed amendments, we believe that that any changes to the RPLT ACT must: give balanced consideration of the interests of long-stay tenants and the ability for park operators to maintain viability in a challenging market. provide greater security of tenure and compensation for owner-renters particularly where issues arise on sale of a dwelling/park or termination of an agreement; not discourage park operators from entering into fixed-term agreements; and consider the rights that a periodic tenant be afforded where they have lived at a park for a substantial time or have reasonable expectations of long-term tenure. If you would like to contact Tenancy WA in relation to this submission, please contact Dean Tingey on (08) or by at dean@tenancywa.org.au Page 12 of 12