Landlords in WA about to be done over - Residential Tenancies Amendment Bill 2011

[Luv2Travel]

Landlords Insurance is a must in this day

Are there any policies which don't have a limit on the number of weeks you can claim for unpaid rent? Landlord Insurance is better than nothing, but far from covers everything. Tenants can cause a lot of mess and expense without it being "malicious" and thus not covered by insurance. It can also take much longer than 10-12 weeks (which is usually what insurance will pay out in regards to loss of rent) to get your property back from a non paying tenant and back to a rentable state.

As long as laws allow tenants to do this, it is important landlords prepare themselves, and not rely solely on insurance to cover all their losses.

 

[Luv2Travel]

And even with my lawyer hat off, I find it hard to see how the balance has been pushed too far towards the tenant side.

You must have totally different laws over there in WA, because if the VIC laws were any more in favour of the tenant, the tenant would be able to walk into VCAT and request that the title of my house be transferred to their name.

 

[thatbum]

thatbum

I suspect some drongo needs to take $5k out of your bank account because they:

a) feel like it; and
b) know how to work the system.

Then you might start to understand.

Loss of rent, malicious or negligent damage, pitiful bonds in comparison, constantly delayed payment, people just not meeting their obligations, skipping town never to be heard from again - these are the things residential landlords have to deal with all too often. All the time while the banks accept no excuses for not meeting mortgage repayments.

There is no "balance". The only reason to get into this caper is to make money. If people don't make money out of it then no-one will do it and legislation like this puts us on a highway to that point... which is good for no-one. I feel just as sorry for the majority of good renters out there who take pride in looking after their landlord's property, pay all their rent on time and try to leave the property in the same condition that they found it - they pay for these laws just as much as the landlords.

If the government wants to provide a certain standard of accomodation to the general population they can %%$# well pay for it themselves, rather than forcing the rest of us to pay for it instead. This is a joke that was already not funny 20 years ago.

All the issues you've raised are definitely unacceptable and almost certainly in breach of tenancy laws and agreements. I think we're on the same page there.

I want to know why you and some of the other people think that the system (ie. the laws) is flawed. And how you would propose to fix those flaws.

Because my point of view is that they are all issues have have legal remedies. And if you're saying the law isn't adequate, then how should the law change exactly?

Because changing the law to suit one specific purpose probably has consequences in other scenarios.

 

[HotRod]

These new laws will have the consequence of increased rent.

Here's a nice pro-forma letter you can all use at no charge:

Dear Mr/Mrs/Miss/Ms Tenant

Through the kindness of the WA State Government your rent has increased $30pw to cover the increased security I must now provide by law.

I know you will now sleep better at night, because the WA State Government says you will.

Please direct your complaint to Consumer Protection.

Have a nice day

Mr/Mrs/Miss/Ms Landlord

 

[HiEquity]

Personally, I think much, if not all, of the RTA can be trashed. What is wrong with common law? Sure keep a tribunal system to streamline things but FFS let the market operate. For example, bonds should be able to be charged at what the market will bear and should sit in the LL's bank account. If a tenant can't afford a larger bond and the LL is willing to take the risk then a higher than market rent can be negotiated to compensate for the risk.
Let the LL hold the bond - if a LL holds the bond unfairly they can still be sued - there is no chance of them going anywhere as the property will still be there.

This type of stuff all works well in the commercial and industrial space - all lease terms are negotiable between the parties and the needs of both can be traded away according to the circumstances. There is no reason it wouldn't work in the resi space, where currently the LL's hands are completely tied while tenants are allowed a few free hits to the groin before any recourse is even possible. This legislation is just an irrational fear of real markets.

 

[HotRod]

I think the main difference bwteeen resi and other forms, is that resi is normally done by unsophisticated LLs renting to even less sophisticated tenants. Each feels hard done by by the other theiving crook.

Imagine the shitfest that would occur if it was a free market.

No leases, LLs spending the bond, accusations back and forth, fun times.

In the commercial world, investors and tenants are more sophisticated (not all but most) and contracts will be entered to into a more business like manner following negotiations and can include whatever is agreed to between the parties.

 

[HiEquity]

In the commercial world, investors and tenants are smore ophisticated (not all but most)

Really? I've seen some pretty unsmore ophisticated types....

Good thing I got myself an edumucation I guess!

BTW, I don't agree. The RTA is a self fulfilling prophecy where tenants and LLs don't think about leases because they don't have to think about leases. If they all knew it was really "buyer beware" everyone would pay a lot more attention and we would all be better for it. I give the average person a lot more credit for looking after their own interests - which is why I am very concerned about where we will go with this legislation and regulations.

But there's no chance of changing this so I may as well give up now. I only stated my opinion because I was asked...

 

[thatbum]

Personally, I think much, if not all, of the RTA can be trashed. What is wrong with common law? Sure keep a tribunal system to streamline things but FFS let the market operate. For example, bonds should be able to be charged at what the market will bear and should sit in the LL's bank account. If a tenant can't afford a larger bond and the LL is willing to take the risk then a higher than market rent can be negotiated to compensate for the risk.
Let the LL hold the bond - if a LL holds the bond unfairly they can still be sued - there is no chance of them going anywhere as the property will still be there.

This type of stuff all works well in the commercial and industrial space - all lease terms are negotiable between the parties and the needs of both can be traded away according to the circumstances. There is no reason it wouldn't work in the resi space, where currently the LL's hands are completely tied while tenants are allowed a few free hits to the groin before any recourse is even possible. This legislation is just an irrational fear of real markets.

That's a fair position, and its true that industrial properties mostly use the common law, and the commercial tenancies act changes relatively little on the position on leases at common law.

But how the law has evolved in Australia is that more and more pro-tenant protections have been put in place through residential tenancy legislation, and there's probably a reason.

I'm only speculating, but I don't think its a long shot to say its probably because more landlords were gaining an unfair advantage rather than the other way around. Otherwise the law would have developed in the other direction.

These amendments do not change the position much at all compared to the last one. WA probably has the least restrictive residential tenancy laws in the entire country, compared to NSW and Vic especially.

I've heard a lot of complaints in this thread, and not all of them are RTA amendment issues. And many of them already have pro-landlord remedies which only need a landlord to move to enforce their rights. Something that most property managers are unfortunately not well trained enough in.

 

[Aaron_C]

As is it is any industry (mine included), once the government gets involved the party is over. Best thing to do is put up with the regulations, fight them when they are drafted, and if you are not happy, change asset class. I've found a loophole by dealing with students who tend to be more obedient of their obligations under the residential laws rather than your average Centrelink client. They are more easily intimidated than others who know the laws better.

 

[thatbum]

I think the main difference bwteeen resi and other forms, is that resi is normally done by unsophisticated LLs renting to even less sophisticated tenants. Each feels hard done by by the other theiving crook.

Imagine the shitfest that would occur if it was a free market.

+1 million to this. I can't imagine a better description of the problem.

If both types of parties were properly versed in their rights and responsibilities, and also maybe some proper dispute resolution knowledge, then there wouldn't be as big a difference in opinion between who is actually the thieving scumbag party. Protip: its usually neither party.

And I see property managers as the professional with that obligation, and so out of everyone, I am critical of PMs who do not know the law and do not even attempt to resolve disputes appropriately.

I don't think I'm pro-tenant or pro-landlord, but I find that tenants need more assistance generally because the PM/landlord combination are usually more in a position to try and gain unfair advantage rather than vice versa.

 

[HiEquity]

There are two parties to a lease:
- The Landlord who promises to provide the Tenant with use and enjoyment of the property for the duration of the Lease; and
- The Tenant who promises to pay the Rent on time and look after the property as if it were their own, for the duration of the Lease.

I hear extremely few cases of LLs not meeting their promises as set out above. I hear and have experienced far too many cases where Tenants don't meet their promises as set out above.

An "unfair advantage" can only be referenced to cases where LLs do not fulfill their promise to provide the Tenant with use and enjoyment of the property, which hardly ever occurs.

A "fair advantage" can be referenced to all cases where a LL moves to enforce the performance of the Tenant's promises, by whatever means at their disposal. For example, if late payment of rent could be used as grounds for immediate eviction, that would constitute a "fair advantage" of the LL as the only promise that has been broken is that of the Tenant. It would also likely significantly reduce the late payment of rent by Tenants.

I strongly suspect your definition of "fair" is significantly different to mine and that you are not actually as impartial as you claim.

And that I'm just wasting my words here anyway...

 

[thatbum]

There are two parties to a lease:
- The Landlord who promises to provide the Tenant with use and enjoyment of the property for the duration of the Lease; and
- The Tenant who promises to pay the Rent on time and look after the property as if it were their own, for the duration of the Lease.

I hear extremely few cases of LLs not meeting their promises as set out above. I hear and have experienced far too many cases where Tenants don't meet their promises as set out above.

An "unfair advantage" can only be referenced to cases where LLs do not fulfill their promise to provide the Tenant with use and enjoyment of the property, which hardly ever occurs.

A "fair advantage" can be referenced to all cases where a LL moves to enforce the performance of the Tenant's promises, by whatever means at their disposal. For example, if late payment of rent could be used as grounds for immediate eviction, that would constitute a "fair advantage" of the LL as the only promise that has been broken is that of the Tenant. It would also likely significantly reduce the late payment of rent by Tenants.

I strongly suspect your definition of "fair" is significantly different to mine and that you are not actually as impartial as you claim.

And that I'm just wasting my words here anyway...

In my experience, the most common breaches of agreement by any party is, in rough order of frequency:

1. Landlords pushing for a bigger slice of the bond than they are legally entitled to, usually because they forget "fair wear and tear".

2. Landlords failing to maintain the property, on a wide range of issues. From very minor (leaking tap), to some pretty massive ones, (only toilet blocked).

3. Tenants failing to pay rent as required.

That's what I mean by landlords gaining an unfair advantage. My definition of "unfair" is an everyday one - just whatever is in breach of the agreement or the law.

 

[HiEquity]

That's what I mean by landlords gaining an unfair advantage. My definition of "unfair" is an everyday one - just whatever is in breach of the agreement or the law.

We are discussing the unfairness of the law and you invoke fairness in the name of the same law? "The law is fair because that's what the law says is fair." Nice one...

I believe it would be fair for LLs to be able to charge whatever bond the market will bear. And for tenants to maintain the properties themselves if they wish to enjoy the privilege of living there. They can unblock the toilet themselves - that way they might actually do something about their kids throwing whole rolls of toilet paper in there...

 

[thatbum]

We are discussing the unfairness of the law and you invoke fairness in the name of the same law? "The law is fair because that's what the law says is fair." Nice one...

But that's how you defined it as well?

An "unfair advantage" can only be referenced to cases where LLs do not fulfill their promise to provide the Tenant with use and enjoyment of the property, which hardly ever occurs.

A "fair advantage" can be referenced to all cases where a LL moves to enforce the performance of the Tenant's promises, by whatever means at their disposal. For example, if late payment of rent could be used as grounds for immediate eviction, that would constitute a "fair advantage" of the LL as the only promise that has been broken is that of the Tenant. It would also likely significantly reduce the late payment of rent by Tenants.

Aren't we on the same page with that?

As for your preference for a more "hands-off" approach for landlord's obligations in terms of maintaining the property, well that's a fair position to take as well. I personally also prefer it, and would happily contract out of s42 of the RTA for a "low-maintenance" lease.

http://www.austlii.edu.au/au/legis/wa/consol_act/rta1987207/s42.html

But then a landlord couldn't have it both ways and then complain if the walls were painted a different colour, or there is a different shower unit or toilet unit - a tenant would then be able to maintain the property as they saw fit.

I would be prepared to do that for some of my properties, but maybe some other landlords would not. I don't think you can have it both ways.

 

[Doovalacky]

Funnily enough there's a reason why its not like you describe.

Don't see how any of the rest of the post is relevant when I have already been given court payment orders. The courts have acknowledged I have a debt owed by x tenant.
Technically they are even in breach of the act by not providing an address or PO box for next place of residence.

Anyway getting a bit off track that matter is just one area I feel unfairly favours tenants. Its hard enough getting the court orders.

 

[HiEquity]

But that's how you defined it as well?
Aren't we on the same page with that?

No. I defined fairness on the part of the LL as letting the tenant have access to the property. That is all.

But then a landlord couldn't have it both ways and then complain if the walls were painted a different colour, or there is a different shower unit or toilet unit - a tenant would then be able to maintain the property as they saw fit.

I would be prepared to do that for some of my properties, but maybe some other landlords would not. I don't think you can have it both ways.

Yes they can. That's what happens in a lot of commercial / industrial leases - tenants can only make alterations with the permission of the LL, not unreasonably withheld, at the tenant's expense if it's something they want.

 

[AlmostBob]

Maintainence, -: maintain in the same condition

so a tenant changing paint colours fittings fixtures, is not maintainence. If a tenant performed maintainence they would hand the property back in precisely the condition in which it was rented.
The preceeding is of course, mandated by the RTA of each state, and territory, except for fair wear.
Despite tenant advocate opinion, fair wear is not
holes kicked in the walls,
nails,
altered wiring,
broken plumbing,
non-functional heating,
copper sold for scrap,
trees pushed over in the yard,
carports unbolted and sold,
garage doors sold
25 wrecked car bodies
scattered garbage
5 feet high grass
stove removed
bathtub removed
4 inch holes drilled through floors to the level below (and the ceiling below)
stolen smoke detector

Nor is removing every light bulb from every fitting, fair. there were working bulbs when you move in, there should be when you move out

4500 tenant Damages this month, 1 unit
currently sitting on court ordered payments over 25000, collected by the Sheriffs at a few hundred /month
In 8 years I have never had an amount awarded against me.
Anyone ever read in the papers about a landlord starting a drug grow operation in a tenant's house?

first rule: tenants lie.
second rule: applies similarly to lawyers

private landlords provide most rental accomodation.
When it becomes finally impossible for those private landlords to continue, who will provide housing.
Government, woefully ignorant tenant advocacy groups, and their associated lawyers, can't pay for it.
Big business won't pay for it.
There is only so much room in cardboard boxes under bridges​

 

[Belbo]

Interesting thread!

Thatbum, you appear to be saying RTAs basically work pretty well. You're argument is they do a good job of stipulating the rules for everybody, in particular per your threefold list of 'common breaches' (1. LLs unfairly claiming wear & tear, 2. LLs not maintaining properties, and 3. Tenants not paying rent).

This list of yours however omits all the really expensive rectification and loss recovery that LLs have to suffer because, as HiE correctly observes, the RTAs make LLs simply carry all but a token small bond's amount of risk. Only a serious amount of bond - such as free market-set leases facilitate, or a more onorous RTA would dictate - could rebalance the risk equation fairly.

Hot Rod's observation that RTAs are needed because resi LLs and tenants generally aren't too educated about contract law is critical. Firstly, because it completely blows away HiE's argument that RTAs could be replaced by common law contracts (that fantasy was a joke, right?); but secondly, because it is a stark reminder that resi tenants include women and children, while commercial tenants are businesses, and nobody gives a rat's if a business is cold and wet. Call it a civilisation thing.

So I'd suggest the problem is not that RTAs exist; They must, these are human beings needing socially-acceptable shelter we are talking about after all. The real problem is that RTAs don't require payment of a risk-relevant bond amount. The rest of the debate is garnish and window dressing.

 

[HiEquity]

Hot Rod's observation that RTAs are needed because resi LLs and tenants generally aren't too educated about contract law is critical. Firstly, because it completely blows away HiE's argument that RTAs could be replaced by common law contracts (that fantasy was a joke, right?); but secondly, because it is a stark reminder that resi tenants include women and children, while commercial tenants are businesses, and nobody gives a rat's if a business is cold and wet. Call it a civilisation thing.

So I'd suggest the problem is not that RTAs exist; They must, these are human beings needing socially-acceptable shelter we are talking about after all. The real problem is that RTAs don't require payment of a risk-relevant bond amount. The rest of the debate is garnish and window dressing.

Hi Belbo

Nice post. Sure it's a complete fantasy but not a joke. It is my contention that it is government's role to ensure women and children (and men) are properly looked after in a civilised society and provided with food and shelter. It's not the role of private landlords. But we have governments forcing this obligation upon LLs because they can't afford to do the job properly themselves - they prefer to employ standing armies of public servants you see. So LLs pay instead. This is not the hallmark of a free and civilised society where everyone takes responsibility for their actions and government cares for the genuinely needy.

But in the absence of any of that sure I'd happily settle for bonds that actually go at least some way to reflecting the risk.

See you in dystopia!

 

[thatbum]

Interesting thread!

Thatbum, you appear to be saying RTAs basically work pretty well. You're argument is they do a good job of stipulating the rules for everybody, in particular per your threefold list of 'common breaches' (1. LLs unfairly claiming wear & tear, 2. LLs not maintaining properties, and 3. Tenants not paying rent).

This list of yours however omits all the really expensive rectification and loss recovery that LLs have to suffer because, as HiE correctly observes, the RTAs make LLs simply carry all but a token small bond's amount of risk. Only a serious amount of bond - such as free market-set leases facilitate, or a more onorous RTA would dictate - could rebalance the risk equation fairly.

Hot Rod's observation that RTAs are needed because resi LLs and tenants generally aren't too educated about contract law is critical. Firstly, because it completely blows away HiE's argument that RTAs could be replaced by common law contracts (that fantasy was a joke, right?); but secondly, because it is a stark reminder that resi tenants include women and children, while commercial tenants are businesses, and nobody gives a rat's if a business is cold and wet. Call it a civilisation thing.

So I'd suggest the problem is not that RTAs exist; They must, these are human beings needing socially-acceptable shelter we are talking about after all. The real problem is that RTAs don't require payment of a risk-relevant bond amount. The rest of the debate is garnish and window dressing.

I'm sure from a landlord point of view, the more bond the better. But if you think about what a bond actually is, its already an incredibly pro-landlord factor.

A bond is the tenant's money, held in trust, as an advance in anticipation of a breach of an agreement. What other sort of contract situation allows for that sort of power in favour of one party? (In fact, the only other one I can think of are lawyers who want money upfront)

Sure if you want to generalise, you can say that "most tenants are going to screw up". But I doubt that's true, and so by asking for a big bond, you're basically contracting in good faith but implying that your tenant is not.

I'm pretty sure bonds are generally limited to 4 weeks rent in every RTA in the country, and that that position isn't likely to change anytime soon.

I get the impression people are misunderstanding me and thinking I condone unlawful tenant activity. Its not that at all - I'm just saying that changing the law isn't necessarily the solution. And any changes to the law will have other consequences even if it perfectly suits your unfortunate and specific run-in with a dodgy tenant.

And I imagine a lot of scenarios with dodgy tenants can be mitigated by a combination of landlord's insurance and effective use of the current RTA laws.

I wonder how many of you knew that you can terminate a tenancy 7 days after any rent arrears, and/or apply to a court for termination with no notice whatsoever for tenants damaging the property.