Foreword. John Rau Minister for Business Services and Consumers

Transcription

1

2 Foreword The Residential Tenancies Act 1995 (RTA) has a direct effect on the lives of many thousands of South Australians. For tenants, the operation of the RTA has a direct impact on the place they call home; for landlords, the RTA protects a precious and hard-earned asset. It is clear that the RTA balances significant social and financial impacts, and for this reason, it is very important to make sure it is operating properly. This discussion paper contains a comprehensive range of recommendations to improve the RTA. The proposed changes are designed to variously benefit tenants and landlords by increasing protection and clarity for both, and reducing red tape and delays in the system. Some reforms are also designed to improve the administration of the Residential Tenancies Tribunal (the Tribunal), which plays the pivotal role in resolving disputes and providing remedies. Ideally, landlords and tenants should be able to manage their relationship between themselves. However, in the inevitable situations where this is not possible, the RTA is there to assist. I encourage everyone with an interest in the RTA to read this paper carefully and provide feedback. As the responsible Minister, making effective reforms to the RTA and the operation of the Tribunal is a priority. John Rau Minister for Business Services and Consumers 2

3 The review process The Government recognises the importance of widespread community consultation in the development of legislation. This discussion paper has been produced to encourage consumers and business as well as other relevant Government and non-government agencies to actively participate in the review of the RTA. The paper puts forward a raft of proposed changes to the RTA and seeks comments on them and on their likely impact on the community. The RTA has not been significantly amended since A review is timely, and the Government is committed to passing a Bill to amend the RTA through Parliament by the end of this year. Submissions to the review People interested in commenting on the proposed reforms are asked to make written submissions and comments on some or all of the proposals. Submissions proposing other measures or dealing with issues which are not covered in the discussion paper are also welcome. Please quote the relevant recommendation number in the discussion paper when commenting on any of the proposals. Wherever possible, please also give examples or other evidence to support viewpoints expressed and provide sources where referring to a publication or data. Copies of the discussion paper are available for downloading at Submissions should be sent to: Residential Tenancies Act Review Legislative Services Attorney-General s Department GPO Box 464 ADELAIDE SA 5001 Or ed to: tenancies.review@agd.sa.gov.au The closing date for submissions is Friday 15 June

4 Confidentiality of submissions Submissions may be quoted for the purposes of the review. If you do not wish your submission to be quoted please make this clear in your submission. However, please note that confidentiality of submissions cannot be guaranteed. This is because submissions may be available for public inspection under the Freedom of Information Act. Commentators may wish to disclose information in anonymous form, for example by removing reference to specific individuals, companies or situations. Disclaimer This discussion paper has been prepared for the purposes of informing decision-making on options for legislative change. It does not represent any policy of the South Australian Government. Whilst every effort has been made to ensure the accuracy of the information contained in this discussion paper, no responsibility is taken for reliance on any aspect of it and it should not be used as a substitute for legal or any other professional advice. Any action taken in anticipation of the outcomes of this review is solely at the risk of persons taking such action. 4

5 CONTENTS 1. SCOPE OF THE RTA 7 2. STARTING A TENANCY 9 3. BOND RENT ENTRY AND INSPECTION RESIDENTIAL TENANCIES TRIBUNAL LANDLORD AND TENANT RESPONSIBILITIES TERMINATION OF AGREEMENT ALTERNATIVE DISPUTE RESOLUTION BOARDING (ROOMING) HOUSES RESIDENTIAL PARKS ACT ADMINISTRATIVE CHANGES 35 Appendix A 13. RESIDENTIAL TENANCY DATABASES 37 5

6 Explanatory note This discussion paper does not quote proposed changes to the RTA but rather discusses those changes in plain English. A copy of the RTA in its current form can be downloaded for free at Glossary Below is a list of some common terms appearing throughout this discussion paper: Applicant Boarding house CBS Commissioner CPI Form 2 Form 4 Fund Resident Rooming house Person who has applied to a landlord or agent to rent residential premises Premises where residents have an agreement to rent rooms (currently called rooming houses) Consumer and Business Services (formerly the Office of Consumer and Business Affairs) Commissioner for Consumer Affairs Consumer Price Index Notice by landlord to tenant to remedy breach of agreement Notice by tenant to landlord to remedy breach of agreement Residential Tenancies Fund Resident of a rooming/boarding house or residential park Premises where residents have an agreement to rent rooms (proposed to be called boarding houses) Rooming House Regulations Residential Tenancies (Rooming Houses) Regulations 1999 RPA Residential Parks Act 2007 RTA Residential Tenancies Act 1995 RTD Residential tenancy database RVA Retirement Villages Act 1987 Tenant Tribunal Tenant under a residential tenancy agreement Residential Tenancies Tribunal 6

7 Introduction This discussion paper outlines 68 proposed reforms to South Australia s tenancy legislation. It is hoped by giving everyone an opportunity to make comments and provide feedback on the proposed reforms we will ultimately end up with stronger and better laws. The discussion paper is broken up into 13 topics. These range from the scope of the RTA and landlord and tenant responsibilities, to the functions of the Tribunal and dispute resolution, to name a few. Appendix A contains extra amendments proposed to be made to the RTA. These are based on the national model provisions for the regulation of residential tenancy databases that were approved by the Ministerial Council on Consumer Affairs in 2010 and agreed to be adopted by all jurisdictions. 1. SCOPE OF THE RTA 1.1 Lifestyle Villages Lifestyle villages are residential villages where residents live in self-contained rental units in a retirement environment. The provision of lifestyle village accommodation is currently unregulated because it falls between the RTA and the Retirement Villages Act 1987 (RVA). The RVA does not cover these arrangements as residents only pay rent and recurrent costs and do not pay a premium (an accommodation bond) which is a distinguishing feature of a retirement village scheme. Residents of lifestyle villages, sometimes called rental villages, are vulnerable because they are elderly and generally have low incomes (usually just the pension). Therefore, there is a strong case for regulating both the provision of accommodation and the additional services which are provided to these residents. The proposed reform will result in lifestyle village accommodation agreements being treated like residential tenancy agreements. The aim is to make owners and operators more accountable for the promises and representations made by them about the accommodation and services available in their lifestyle village. Recommendation 1 The RTA will apply to operators, owners and residents of Lifestyle Villages. 7

8 1.2 Non exempt educational institutions In general, the RTA does not apply to an agreement giving a right of occupancy in an educational institution. CBS has become aware of an increase in self-contained, apartment style accommodation which is provided (usually to students) by operators who are not exempt educational institutions but operate as if they were. This reform is aimed to protect vulnerable people, particularly international students, who are at risk from unscrupulous operators. Recommendation 2 It will be clarified that the RTA applies to agreements for apartment style accommodation provided by operators who are not exempt educational institutions. 1.3 Vendor tenants There are a number of exclusions from the RTA, including when an agreement for the sale of land confers a right to occupy premises on a party to the agreement. An increasing number of vendors are staying in the property as tenants of the purchaser, sometimes for an extended period of time. It is proposed to enable a purchaser to opt out of the exclusion when the vendor will remain in the property for more than 28 days. Recommendation 3 At the election of the purchaser, the RTA will apply where an agreement for the sale of property confers a right on a party to occupy the premises for a period of more than 28 days. 8

9 2. STARTING A TENANCY 2.1 Standard form agreement Currently the RTA does not prescribe a mandatory form for residential tenancy agreements. CBS provides model forms, but only as a guide to assist parties to create a binding agreement. In recent times CBS has received complaints about application to rent forms. These forms are given to prospective tenants by letting agents to fill out and sign as a prerequisite to being considered as a tenant for a property. Many of these forms include clauses in fine print that are designed to create a binding agreement if the signed application is accepted. Unfortunately, prospective tenants do not always read or understand the binding nature of these fine print clauses and some have found themselves unintentionally bound as a party to a tenancy agreement they do not wish to proceed with. These situations are common in times of low vacancies when tenants sign forms for numerous properties and unintentionally become parties to multiple agreements. The tenants are then liable for break lease costs. To rectify this situation, it is proposed to introduce a standard form tenancy agreement prescribed by regulation. It is also proposed to include a provision in the RTA stating explicitly that no other document apart from the prescribed form can constitute a binding residential tenancy agreement. Recommendation 4 A standard form tenancy agreement will be prescribed by regulation. 9

10 2.2 Landlord details Currently, landlords must provide their name and residential address to the tenant at the start of the tenancy - even if an agent manages the property for them. It is important to retain the requirement that a tenant be provided with an address for the service of documents. However, the provision of a postal address that may not be the landlord s residential address should suffice. Additionally, if a landlord has engaged an agent to manage the property, they should not be required to provide their own personal details if the tenant has been given the agent s contact details. Recommendation 5 Landlords will no longer be required to provide tenants with their home address if they have a PO Box. Additionally, landlords using an agent will no longer have to provide tenants with any of their personal details. 2.3 Information to be provided by landlords to tenants Tenants frequently complain that there are no instructions for the use of facilities and appliances provided at the premises. This amendment requires the landlord to provide to the tenant, at or before commencement of the tenancy agreement, written or oral instructions for any special appliances and facilities provided for the use of the tenant. If a landlord does not give adequate instructions for the use of such appliances or facilities, then that may be taken into account in any subsequent bond compensation claim. This provision will benefit landlords as well as tenants as it will enable tenants to use the appliances correctly and, in turn, reduce the burden on landlords to repair appliances which have been misused. Special facilities will be defined as non standard domestic appliances. Recommendation 6 Landlords will be required to provide adequate instructions for the use of special facilities and appliances provided for use by tenants. 10

11 3. BOND 3.1 Bond refunds Currently, the RTA stipulates that a tenant must be paid interest on the refund of a bond. The interest rate was set to match a Commonwealth Bank of Australia Streamline Account for deposits of less than $5,000, at 0.01%. The interest paid on bonds is negligible, and the administrative burden created by the requirement is out of proportion to the benefit to tenants. It is proposed that interest no longer be paid on to tenants on bond refunds, but rather be used towards the administration and enforcement of the RTA. Recommendation 7 Bond refunds to tenants will no longer include interest. 4. RENT 4.1 Rent in advance Currently a landlord can only require a tenant to pay a maximum of two weeks rent in advance at the commencement of the tenancy. It is proposed that landlords be given the option of asking for four weeks rent in advance when the rent is over $600 per week. For rents of $600 or less, the two week limit will remain unchanged. It is proposed that the $600 rent limit be adjusted annually by CPI. Recommendation 8 Landlords will be able to ask for four weeks rent in advance when rent is over $600 per week. 4.2 Rent collection Some landlords require the tenant to pay rent using the services of a rent collection agency, which results in extra costs to the tenant. Other landlords still collect rent from the tenant at the rented premises. This can be intrusive to the tenant as some landlords may use this as an excuse for an unofficial inspection. It is proposed to amend the RTA to ensure that landlords must offer reasonable options to the tenant for the payment of rent. Those options may include electronic transfer through a bank or financial institution or by cheque. Recommendation 9 Tenants must be given at least two alternative rent payment methods which do not involve the tenant using the services of a rent collection agency. 11

12 4.3 Landlord s records of rent Landlords are required to keep proper rent records. However, many rent records are difficult to interpret. This causes confusion for both landlords and tenants and increases conflict when there is disagreement as to the amount of rent that has been paid. Ensuring that rent records contain the relevant information and are clearly set out will help to resolve conflicts earlier, and where matters proceed to the Tribunal, will also help the Tribunal to interpret the records more easily. The RTA does not currently specify what constitutes a proper rent record but does set out the information to be included in a rent receipt. It is proposed to require the same details in a rent record as are currently required in a rent receipt. Landlords who receive rent by electronic transfer to their bank or financial institution will not be required to maintain rent records as the relevant details will be recorded in the financial statements generated by their bank or financial institution. Recommendation 10 To reduce the likelihood of disputes over whether rental obligations have been met, rent records will need to include the same information currently required in rent receipts. 4.4 Provision of rent records where payment is disputed Where rent is paid into a bank account and the landlord is not required to give a receipt, the tenant receives no feedback about whether rent payments are on track or whether the rent has actually been deposited into the landlord s account. Sometimes a tenant may rely on direct debit systems to pay their rent and if there are insufficient funds in their account or if there is a mistake by their bank or credit union, they may not know there is a problem until they receive a breach notice for rent arrears. If the tenant is able to access a copy of the rent records, the problem may be resolved without the need for a Tribunal hearing. It is proposed that when rent payments are in dispute tenants should be able to receive a copy of the landlord or agent s rent records upon request. Recommendation 11 Where rent payments are in dispute, landlords will be required to provide a copy of their rent records upon being asked for the information by the tenant. 12

13 4.5 Electronic rent payment Currently, when rent is paid by electronic transfer, there is some confusion over whether payment must be initiated or completed by the date the rent is due. It is proposed to clarify that rent payment is taken to be made at the time it is received into the account of the landlord or agent, rather than at the time the tenant initiates the transaction. This proposal puts the onus on the tenant to ensure that payment is received by the landlord on the due date. However, it will not apply where the payment has been delayed through fault of the financial institution, or circumstances outside the control of the tenant. Recommendation 12 Rent paid electronically will be taken to be paid on the date the landlord or agent receives the rent in their account. 13

14 5. ENTRY AND INSPECTION 5.1 Landlord right of entry Unless otherwise agreed with the tenant, a landlord must give proper notice to enter the rented premises. Currently, there is no restriction on the hours a landlord can enter the property when they have given proper notice. It is preferable that the RTA clarify what is a reasonable time to enter. It is therefore proposed that the landlord be unable to enter the rented premises between 8pm and 8am, and on Sundays and public holidays. It will be possible to enter during these hours where there is an emergency, or when there is an order of the Tribunal ordering entry at those times. The tenant can also agree to the landlord entering during the prohibited times not more than 7 days before the time of entry. This reform is aimed at providing guidance to landlords about what is reasonable when seeking to enter rented premises. It is not proposed to apply to, and unnecessarily burden, landlords and tenants who choose to negotiate entry times which may fall within the prohibited times. Recommendation 13 Landlords will only be able to enter a property between 8am and 8pm, Monday to Saturday (unless otherwise agreed with the tenant). 14

15 5.2 Negotiate entry Currently, a landlord is entitled to enter the property eg. for inspection or repairs provided they have given valid notice as required by the RTA. Although the tenant is entitled to be on the premises, the timing of the entry does not need to be convenient for the tenant. A landlord s right to enter can be the cause of much conflict with a tenant. To minimise this, it is proposed to require landlords to make reasonable attempts to negotiate an entry time with the tenant. It is proposed that a landlord or agent will be required to provide the tenant with written notice of three alternative dates and times for their proposed entry. If the tenant refuses to accept any of those options, the landlord or agent will be entitled to elect to take one of the options. This reform is not proposed to apply to, and unnecessarily burden, landlords and tenants who easily negotiate entry times. Recommendation 14 Landlords will be required to attempt to negotiate an entry time with the tenant. 5.3 Inspection period When agents notify a tenant of an upcoming inspection, they usually provide a window during which the inspection will occur. Sometimes this window can be many hours and a tenant who wishes to be present is left waiting. Unless otherwise agreed between landlords, agents and tenants, it is proposed to restrict the window during which entry can occur, to two hours. This provides a reasonable opportunity for the agent to juggle their commitments whilst ensuring that the tenant is not unfairly inconvenienced. Recommendation 15 A notice of inspection will be required to contain a maximum two hour window if the tenant wishes to be present (unless otherwise agreed with the tenant). 15

16 5.4 Gardening When a residential tenancy agreement provides for the landlord or agent to do the gardening, it is proposed that the RTA provide that the gardening should only be done between the hours of 8am and 8pm Monday to Saturday, excluding public holidays. Gardening outside those hours will be allowed subject to the approval of the tenant not more than 7 days before the entry of the landlord or agent to do the gardening. Additionally, it is expected that the landlord or agent must make reasonable attempts to negotiate a suitable time with a tenant if they would like to be present during the gardening. This reform is not proposed to apply to, and unnecessarily burden, landlords and tenants who easily negotiate entry for gardening, which may fall within the prohibited times. Additionally, this reform is not proposed to apply to common gardens in strata title or community title properties. Recommendation 16 Gardening done by the landlord or agent will be confined between the hours of 8am to 8pm, Monday to Saturday (unless otherwise agreed with the tenant). 5.5 Re-entry for breach When a tenant is served a breach notice, the tenant must be given an opportunity to remedy the breach. If the breach is something other than rent arrears eg. damage to the property, the landlord or agent must attend the property to see whether the tenant has complied with the breach notice. The RTA provides for landlords or agents to reenter the premises for that purpose. However, sometimes the provision is misunderstood so that a landlord or agent believes they are able to conduct routine inspections of the premises more frequently than once every four weeks. It is proposed to clarify that this kind of entry is only to enable a landlord or agent to inspect whether a breach, other than for rent arrears, has been remedied. It is still proposed that the tenant will be given written notice of the intention to re-enter the property not less than 7 days before the proposed re entry. The timing of the re-entry will be at the landlord s discretion between the hours of 8am and 8pm Monday to Saturday, excluding public holidays. Recommendation 17 Landlords will not be able to use the existing re-entry provisions, which will only apply to inspections to ensure a breach has been remedied, to conduct routine inspections more frequently than once a month. 16

17 6. RESIDENTIAL TENANCIES TRIBUNAL 6.1 Registrars The Governor is currently responsible for appointing registrars and deputy registrars of the Tribunal. It is proposed that this responsibility be transferred to the Commissioner for Consumer Affairs. This will reduce the administrative formalities involved in these essentially routine appointments. Recommendation 18 Registrars of the Tribunal will be appointed by the Commissioner. 6.2 Jurisdiction of the Tribunal The Tribunal can currently hear claims of up to $10,000. The value and cost of items has increased over time. This amendment will increase the jurisdictional limit of the Tribunal to $40,000. Recommendation 19 The Tribunal s jurisdiction will be raised to $40, Principles of equity and good conscience While Tribunal members currently act in a fair manner and make orders based on the merits of the case, the requirement to do so is not included in the RTA. It is proposed that an amendment be made to stipulate that the Tribunal must act fairly and according to equity, good conscience and the substantial merits of the case. Recommendation 20 The principles of equity and good conscience will explicitly apply to Tribunal members. 6.4 Small claims The Tribunal currently lists the majority of applications it receives for a hearing, regardless of the nature of the claim. It is proposed to improve the efficiency of the Tribunal by ensuring that it is able to determine certain matters (for example minor matters or small claims), based on the application and relevant documentation provided by landlords and tenants, without the need for parties to attend a hearing. However, the parties will have a right to be heard in this process. Additionally, it is proposed to enable the Tribunal to reject applications of a frivolous nature. Recommendation 21 The Tribunal will be able to determine small claims on the papers and will be able to reject applications of a frivolous nature. 17

18 6.5 Protection against self incrimination Sometimes Tribunal hearings are affected by a person s fear of self incrimination when giving evidence. It is proposed to amend the RTA to replicate the RPA to protect a person from self-incrimination in relation to evidence given at the Tribunal. This provision will mean that evidence given at the Tribunal cannot be used in criminal proceedings, unless it relates to an offence under the RTA, or perjury. Recommendation 22 People giving evidence during Tribunal proceedings will be protected against self incrimination. 6.6 Application to vary or set aside order The current time limit to apply to the Tribunal to vary or set aside an order is 3 months. This commences on the date when the order is made. Generally, parties who make this type of application will ask the Tribunal to provide a written statement of reasons for making the order. To improve this process, it is proposed to provide that parties be given 7 days after the date the order is made to notify the Tribunal of their intention to apply to vary or set aside the order. Parties will then be given 14 days after the receipt of the Tribunal s statement of written reasons to apply to vary or set aside the order. Recommendation 23 A party to a Tribunal order will be given 7 days to lodge a notification of intention to vary or set aside an order and 14 days after receiving the Tribunal s statement of written reasons to lodge the application to vary or set aside the order. 6.7 Appeals Appeals of a decision of the Tribunal lie in the District Court. It is proposed to specify that the appeals will go to the Administrative and Disciplinary Division of the District Court. A South Australian Civil and Administrative Tribunal is currently being developed. It is proposed that once it becomes operational, appeals from Tribunal decisions will be heard there rather than the District Court. Recommendation 24 Appeals from Tribunal decisions will lie in the Administrative and Disciplinary Division of the District Court, until the new South Australian Civil and Administrative Tribunal becomes operational. 18

19 7. LANDLORD AND TENANT RESPONSIBILITIES 7.1 Landlord responsibility for repairs Landlords are required to attend to maintenance and repairs in a reasonable amount of time once they have been notified of a problem. It is proposed to provide that when a landlord does not carry out repairs in circumstances which amount to a breach of their obligation, the landlord will be responsible for compensating the tenant for reasonable losses flowing from the failure to repair. For example, if a tenant reports a problem and the landlord s inaction, within a reasonable amount of time after notification, leads to damage to the tenant s property, the landlord is responsible for compensating the tenant. Recommendation 25 Landlords will be responsible for compensating tenants for their reasonable losses from a failure to carry out reasonable repairs. 7.2 Tenant s responsibility for lost property It is proposed to add a provision which states explicitly that the tenant must replace or compensate the landlord for the replacement of any ancillary property lost while the tenant was responsible for it. This would include the cost of replacing keys and remote controls for doors and gates. Recommendation 26 Tenants will be responsible for compensating landlords for any ancillary property lost. 7.3 Recovery of expenses Landlords sometimes incur out of pocket expenses such as the replacement of rent books that are lost by tenants, or the costs associated with tenant cheques which are dishonoured. It is proposed to allow landlords to recover expenses from the tenant where the expense is reasonably incurred as a consequence of the tenant being at fault. Recommendation 27 Landlords will be able to recover their reasonable expenses where the tenant is at fault. 19

20 7.4 Disclosure of impending sale of property A tenant makes an investment when moving into a rental property through moving costs and connection to utilities as well as the physical and emotional effort required to relocate. Unfortunately some tenants find that they have only just settled in and the property is sold. This not only means there will be inspections by prospective purchasers, but that the tenant may well receive a termination notice in the case of a periodic agreement, or may not have their fixed term agreement renewed. It is proposed to require landlords to disclose if they have entered into a sales agency agreement for the sale of the property, or have initiated advertising of the property if selling privately, before the tenant enters into the tenancy agreement. If there is no disclosure and the property is sold within two months of the commencement of the tenancy agreement, it is proposed that the tenant will be able to terminate the agreement without penalty. Recommendation 28 Landlords will be required to disclose if they have entered into a sales agency agreement for the sale of the property before a prospective tenant enters into a tenancy agreement. If no disclosure is provided and the property is sold within the first two months of the tenancy, a tenant will be able to terminate the agreement without penalty. A landlord has a right to sell their rental property during the term of a tenancy agreement. However, the tenant is not always informed of the decision, and the first indication they receive may be when a For Sale sign is erected outside the property. It is proposed that the landlord must inform the tenant in writing of an intention to sell the property no later than 14 days after entering into a sales agency agreement or before the property is first advertised for sale or made available for inspection by prospective purchasers, whichever is the earlier. Recommendation 29 Landlords will be required to give written notice to tenants of an intention to sell the property, no later than 14 days after they have entered into a sales agency agreement or before the premises are first advertised for sale or available for inspection. 20

21 7.5 Open inspections and sale of property Open inspections can be the cause of much conflict between parties to a tenancy agreement. Landlords want prospective purchasers to be able to view the property, whereas tenants want privacy and to ensure their personal belongings are safe. It is reasonable for tenants to have a say about when inspections may occur, particularly if they are required to clean the premises for that purpose. Tenants should also be given the choice to be present during inspections for security reasons. As such it is proposed to require landlords and agents to make reasonable attempts to negotiate suitable times for inspections with tenants. It is proposed that a landlord will be required to provide the tenant with written notice of three alternative times for the proposed inspections. If the tenant refuses to accept any of those options, the landlord will be entitled to choose the inspection times from the options provided. Recommendation 30 Landlords and agents will be required to negotiate open inspection times with tenants. When a property is sold, the tenant should be given the name and contact details of the purchaser, or their agent, as well as the date of settlement from which to start paying rent to their new landlord. It is proposed to require a landlord to provide this information to the tenant by written notice. Recommendation 31 Landlords and agents will be required to inform tenants in writing of the sale of the property including the name and contact details of the purchaser or their agent and the date of settlement. 21

22 7.6 Statutory charges Most tenancy agreements stipulate that tenants are responsible for the payment of all water use. The landlord is legally liable for the payment of the water account but is able to pass on all charges, except sewerage and the River Murray Levy, to the tenant. Sometimes landlords do not provide copies of the actual account to the tenant who is unable to verify the charges claimed. To avoid disputes, it is proposed to require landlords to provide tenants with a copy of the accurate particulars of any water accounts for which the tenant is responsible, as and when they are received by the landlord. Recommendation 32 Landlords must pass on the accurate particulars of water accounts for which the tenant is responsible, to the tenant, as and when they are received. 22

23 8. TERMINATION OF AGREEMENT 8.1 Agreement for fixed term continues if not terminated Sometimes there can be confusion at the end of a fixed term tenancy when the parties to the agreement have not contacted each other to confirm that an extension will or will not be sought or will or will not be provided. This can lead to uncertainty, particularly for tenants who do not know whether to move out or not. To ensure that all parties to a tenancy agreement have a reasonable amount of notice if the tenancy will not be renewed, it is proposed to insert a requirement that each party to a fixed term lease must provide a written notice of termination to the other no less than 28 days before the end of the fixed term. If a notice has not been served and the tenant remains in the premises at the end of the fixed term, then the agreement will continue as a periodic tenancy agreement under the same terms that applied prior to the end of the fixed term agreement. Recommendation 33 Parties to a fixed term agreement will be required to notify each other at least 28 days before the end of the term if the agreement is not to be renewed. 8.2 Termination by the landlord When a tenant breaches a tenancy agreement, the landlord can serve them with a Form 2. This form advises the tenant of the breach and states that if the tenant does not remedy the breach within the specified timeframe, the tenancy is terminated by force of the notice. The legislation prescribes minimum timeframes which must be given to the tenant. Currently, those timeframes are different, depending on whether the notice is for rent arrears (unpaid rent) or other breaches. This causes confusion and leads to applications being rejected by the Tribunal on the grounds that the Form 2 has not been completed correctly. Currently, rent must be overdue by 14 days before a Form 2 can be served. The tenant must then be given at least 7 days to remedy the breach. If the rent remains unpaid the tenant is required to give up possession of the property the following day. It is proposed to enable a landlord to serve the notice earlier, when the rent is unpaid for 7 days, but allow a tenant 14 days to remedy the breach. For breaches that do not relate to rent, currently the Form 2 must allow the tenant 7 days to remedy the breach and 8 days to vacate the property after failing to do so. It is 23

24 proposed to amend this process so that a tenant is given 14 days to remedy the breach and failing to do so, must give up possession of the property the following day. These changes to the notice periods for a Form 2 relating to both rent arrears and other breaches are simply procedural. The actual time provided to a tenant to remedy a breach remains unchanged. The purpose of the proposed changes is to reduce the confusion that currently exists for people when they fill out a Form 2. Recommendation 34 The notice periods provided for a landlord to serve a tenant with a Form 2 notice of breach will be simplified. Many tenancies end after a landlord serves a Form 2 notice on the tenant for breach of the agreement. The Form 2 notice terminates the agreement when the tenant fails to remedy the breach. The result is that the tenancy is ended by the landlord, although it is the tenant who is in breach and has forced the landlord to do so. If the tenant vacates the property, they are not breaking the lease and therefore are not responsible for the losses of the landlord due to early lease termination. It is proposed that where the tenant vacates the property after receiving a Form 2, the landlord should be able to be compensated for their reasonable losses due to the early termination of the tenancy agreement. This will make the situation similar to when a tenant breaks a fixed term agreement by abandoning the property without otherwise being in breach and is liable to compensate the landlord for their reasonable losses. Recommendation 35 Landlords will be able to claim compensation for abandonment from a tenant who vacates a property under a Form 2 after failing to remedy a breach. If a tenant receives a Form 2 notice and does not remedy the breach or leave the property by the date on the notice, the next step for the landlord is to apply to the Tribunal for vacant possession of the premises. Some landlords wait for weeks before they take this step. In order to ensure landlords act quickly to resolve the issue, it is proposed to amend the RTA to allow only 14 days after the termination date on the Form 2 for the landlord to make the application to the Tribunal. This will benefit both landlords and tenants who will see a faster and clearer resolution to the issue. Recommendation 36 Landlords will be required to apply to the Tribunal for vacant possession of a property within 14 days of the expiry date on a Form 2 notice of breach. 24

25 A new provision is to be inserted into the RTA which allows a landlord to immediately terminate a tenancy agreement on the grounds that the rented premises has been destroyed or is uninhabitable and ceased to be lawfully usable for residential purposes. Recommendation 37 Landlords will be able to immediately terminate a tenancy agreement if the premises have become uninhabitable. Sometimes a tenant applies to Housing SA for the rental premises to be assessed for a housing improvement notice. To protect these tenants from retaliatory evictions by the landlord, it is proposed to prevent landlords from being able to terminate a tenancy agreement when the rental property has been nominated or is being assessed for a housing improvement notice at the proper instigation of the tenant. This protection will also cover the situation where a tenant has lodged an application to the Tribunal for an order that the rent is excessive. However, tenants will not be able to use this provision as a shield against proceedings that a landlord has already initiated for vacant possession of the premises. Recommendation 38 Landlords will be unable to serve a termination notice during a tenancy if proceedings relating to a housing improvement notice have commenced at the proper instigation of the tenant. Additionally, The RTA currently prevents a landlord from serving a termination notice on a tenant if the rented property is subject to a Housing SA housing improvement notice or rent control notice. This means that the landlord must apply to the Tribunal for permission to serve a Form 2 notice of breach when the tenant is in breach of the agreement. It is proposed that where the tenant s breach is for unpaid rent only, a landlord will be able to serve a Form 2 notice of breach on the tenant without first having to apply to the Tribunal. Recommendation 39 Landlords of properties subject to a housing improvement notice or rent control will be able to serve a Form 2 for rent arrears without applying to the Tribunal. 25

26 Currently, a landlord can not apply to the Tribunal for an order terminating the tenancy agreement and granting them vacant possession of the property unless they have served the tenant with a Form 2 breach notice. This is regardless of the number of times a Form 2 has been served on the tenant. It is proposed to improve the way landlords can evict tenants who repeatedly fail to pay their rent on time. It is proposed that a landlord who has properly served a tenant with a Form 2 breach notice for rent arrears twice in the previous 12 months will be able to skip the need to serve a third Form 2 notice for rent arrears and apply directly to the Tribunal for vacant possession of the property (if the breach is in fact a breach). Recommendation 40 Landlords who have properly served tenants with a Form 2 notice for rent arrears twice in 12 months will be able to apply directly to the Tribunal for vacant possession if the tenant is in rent arrears for a third time. 8.3 Termination by the tenant When a landlord breaches a tenancy agreement, the tenant can serve them with a Form 4. This form advises the landlord of the breach and states that if the landlord does not remedy the breach within the specified timeframe, the tenancy is terminated by force of the notice. The legislation prescribes minimum timeframes which must be given to the landlord. Currently, the Form 4 must allow the landlord 7 days to remedy the breach and enables the tenant to vacate the property 8 days after that, if the breach is not remedied. It is proposed to amend the timeframes for the Form 4 in the same manner as the timeframes for the Form 2 will be amended. Therefore it is proposed that a landlord be given 14 days to remedy a breach and failing to do so, the tenant will be able to vacate the property the following day. This change is simply procedural. The actual time provided to a landlord to remedy a breach before the tenancy agreement terminates remains unchanged. The purpose of the proposed change is to reduce the confusion that currently exists for people when they fill out a Form 4. Recommendation 41 The notice periods provided for a tenant to serve a landlord with a Form 4 notice of breach will be simplified. 26

27 Similar to a landlord, a tenant will be able to terminate a tenancy agreement where the premises are destroyed or uninhabitable and have ceased to be lawfully habitable, or they have been compulsorily acquired. It is proposed that a tenant will be able to immediately terminate the agreement under these circumstances. However, this provision will not apply where the premises have become uninhabitable through action which constitutes a breach of the tenancy agreement by the tenant, eg. allowing the premises to fall into a state of gross disrepair or uncleanliness. Recommendation 42 Tenants will be able to immediately terminate an agreement where the premises have become uninhabitable or have been compulsorily acquired. Sometimes in applications for vacant possession, the service of a notice of the Tribunal hearing is difficult without knowing the correct names of the occupiers or subtenants. It is proposed to simplify the process and provide that such service may be effected by sending the notice to occupiers or any sub-tenants at those premises. Recommendation 43 Service of a notice of hearing for a vacant possession application will be able to be addressed to occupiers or any subtenants of the premises. 8.4 Termination by the Tribunal Under section 90 of the RTA, an interested person can apply to the Tribunal for the termination of a tenancy agreement, based on the bad conduct of the tenant. It is proposed to extend the scope of this provision so that section 90 applications can be made by the following people: owners, landlords or tenants of adjacent properties; the strata or community corporation of the property or an adjacent property and any authorised officers i.e. enforcement officers of CBS or the Police. Recommendation 44 The definition of interested persons able to seek the termination of a tenancy agreement under s90 will be expanded to include owners, landlords or tenants of adjacent properties, the strata or community corporation of the property or adjacent properties and any authorised officers. 27

28 8.5 Abandoned goods Tenants frequently leave possessions behind at the end of a tenancy. Currently, a landlord is required to store abandoned goods for 60 days if they are worth more than the cost of removal, storage and sale. It is proposed to reduce this time limit to 30 days, as it can be assumed that a former tenant who wants their possessions returned will claim them soon after moving. Additionally, there is currently no requirement for landlords to keep tenants personal documents, which are often more valued by the tenants. It is proposed to require a landlord to keep personal documents left behind by the tenant for 30 days. Recommendation 45 Landlords will be required to store all abandoned goods, including personal documents, left behind by a tenant for 30 days. 8.6 Enforcement of orders for possession Currently, there is no provision in the RTA stipulating that only a Tribunal bailiff can enforce an order of the Tribunal granting vacant possession of the premises. It is proposed to make it clear that only Tribunal bailiffs, and not landlords, can evict tenants. This will assist in making the eviction process as straight forward as possible. Recommendation 46 It will be clarified that only Tribunal bailiffs can enforce an eviction. The RTA does not include a timeframe for the enforcement of a Tribunal order. Some landlords will seek enforcement of an order for possession weeks after the order was made. It is proposed to insert a maximum time limit of 14 days to enforce a Tribunal order for vacant possession of the premises. This will provide greater certainty for both landlords and tenants and lead to a more streamlined process for repossession. Recommendation 47 Landlords will be required to apply to the Tribunal for the enforcement of a vacant possession order within 14 days of the making of the order. 28

29 9. ALTERNATIVE DISPUTE RESOLUTION 9.1 Mediation It is proposed to include new and expanded mediation provisions in the RTA so as to enable CBS to play a greater role in dispute resolution. The proposed provisions will mirror the mediation provisions currently in Division 4 of the RPA. This means that there will be detailed provisions about the appointment of mediators by the Commissioner and the referral of applications to mediation by the Tribunal. There will also be detailed provisions about the functions and duties of mediators including clarification that a mediator can only encourage the settlement of a dispute and cannot actually determine any matter in dispute. Procedural provisions will also be included outlining that a settlement to which a party agrees at mediation is binding on that party. It is also proposed to provide that where a mediator makes a determination or order to give effect to a settlement, the determination or order will operate as if it had been made by the Tribunal. Recommendation 48 Mediation provisions that will mirror the mediation provisions currently under the RPA will be adopted. 10. BOARDING (ROOMING) HOUSES 10.1 Preliminary Currently referred to as rooming houses, it is intended to change the terminology to boarding houses in order to avoid confusion. Boarding (rooming) houses are properties where rooms are available on a commercial basis for residential occupation and accommodation is available for at least three persons. Residents usually have their own room and access to common facilities. It is low cost accommodation and residents are frequently vulnerable and at risk of homelessness. Rooming house agreements are less regulated than residential tenancy agreements. The current Rooming House Regulations provide a broad regulatory framework so as to avoid placing cost burdens on proprietors which might reduce the incentive to provide this kind of accommodation. However, to protect residents adequately, the provisions of the Rooming House Regulations are to be transferred into the RTA itself. Additionally, some amendments are proposed which will make the provisions clearer and will extend the protections for 29

30 boarding house residents. This will include a more specific definition of what a boarding house is for the purposes of determining whether a tenancy is a boarding house agreement or not. It is still intended to leave the boarding house sector less regulated than the residential tenancies sector. The inclusion of the boarding house provisions in the RTA, will mean that the general provisions in the RTA, for example the provisions relating to applications to the Tribunal, will also apply to boarding house agreements. Recommendation 49 The provisions of the Rooming House Regulations will be transferred into the RTA and the term rooming house will be changed to boarding house House rules A boarding house proprietor may make various house rules in relation to the boarding house. However, house rules need to comply with the RTA and there is an implicit requirement that they be reasonable. It is proposed to provide that a resident may apply to the Tribunal for an order that a house rule which is unreasonable may be declared void. Recommendation 50 Residents will be able to apply to the Tribunal for a declaration that a house rule is void Security of premises Currently, there is a requirement for rooms to be reasonably secure. This generally means the provision of a lock on the door of each resident s room. However, there is an increasing tendency for rooms to be let to more than one resident, whether on the same or on separate agreements. It is proposed that boarding house proprietors be required to provide lockable drawers or a lockable cabinet to each resident of a dual occupancy room. Recommendation 51 Proprietors will be required to provide lockable drawers or cabinets for residents in dual occupancy rooms. 30

31 10.4 Obligation to repair Building works and renovations can be inconvenient and disruptive to residents. This inconvenience may be magnified where there are many residents in the property. It is proposed to explicitly require a boarding house proprietor to minimise inconvenience and disruption to the residents and to provide substitute facilities if necessary. Additionally, it is proposed that the proprietor be required to give residents 14 days notice of any extensive renovations to the property. Recommendation 52 Proprietors will be required to provide 14 days notice of extensive renovations and minimise inconvenience where possible Rent Sometimes a boarding house proprietor will seize a resident s belongings as compensation for unpaid rent. It is proposed to specifically prohibit this action. Recommendation 53 Proprietors will be prohibited from seizing a resident s property as compensation for unpaid rent Duty to provide statement or give receipt for payments Currently the Rooming House Regulations do not require boarding house proprietors to keep proper rent records. It is proposed to create an obligation for the proprietor to keep proper rent records, similar to a landlord. This will benefit both parties, particularly where there is a dispute about rent payments. Recommendation 54 Proprietors will be required to keep proper rent records. Some boarding house agreements include the provision of additional facilities or services at additional cost. It is proposed that where this is the case, the boarding house proprietor must provide the resident regular itemised accounts showing the basis of those additional charges. This may include calculations of the resident s proportional use of the service. Recommendation 55 Proprietors will be required to provide regular itemised accounts for additional services. 31