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Tale of two states as ‘no fault’ evictions under fire

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It’s been very much a tale of two cities (and states) for renters in Sydney and Melbourne this past week.

As of last Sunday, Victorian tenants no longer have the threat of “no reason” evictions hanging over them while efforts in NSW to follow suit were characterised as “dumping on landlords”.

Prior to that in Victoria, rental providers (as they call landlords there) could give notices to vacate without having to a provide a reason.  Now they have to offer evidence that they have a valid reason if they want to do so.

Meanwhile last week in Sydney, in a Press release headlined “Labor Dumps On Landlords”, Better Regulation (aka Fair Trading) Minister Kevin Anderson accused Labor’s Julia Finn of trying “to rip away the rights of landlords as they begin the process of getting back on their feet following the worst of COVID-19” when she introduced proposals for similar restrictions on “no reason” terminations of leases.

He added that the Bill introduced by Shadow Minister for Consumer Protection “showed no logic” at a time when the NSW government was introducing a transitional six months to allow tenants to repay rent that was unpaid or reduced during the Covid-19 moratorium on evictions.

In normal times, ‘no reason’ or ‘no fault’ evictions are commonly used to prevent fixed term rentals from evolving into periodic leases which require much longer notice terms and limit the number of rent increases to one a year, which even then can be challenged if it is excessive.

With ‘no reason’ evictions, landlords can change tenants every six months, to maximise their income, especially in an overheated rentals market.

Proof required

But no longer, in Victoria. There, according to the Tenants Union website, some notices to vacate will now require proof that they are valid.  A landlord can’t just say they want to renovate – they have to show a copy of building permits to prove it’s not just a convenient way to sidestep the law.

Similarly, if they ask the tenant to move out because they want to sell, they have to attach a copy of the contract of sale and their agreement with a sales agent.

The only exception to the curb on “no reason” evictions there would be the notice to vacate at the end of a fixed term lease, which can be given without a more specific reason.

And Victorian renters may now be able to challenge a notice to vacate if they do not think it is valid, or believe it has been given in response to exercising, or trying to exercise, their rights. You’ll find a fact sheet on changes to Victoria’s rental laws here.

‘No fault’ evictions return

In stark contrast, “no reason” evictions will be back on the cards in NSW as soon as the post-Covid transition period for rentals ends in September.

And Fair Trading NSW has attacked Labor for supporting a Bill to end them, which Julia Finn said would ensure tenants were protected when the Government’s COVID-19 rental eviction moratorium period is finally over.

During that transitional phase, a NSW landlord can’t evict “impacted” tenants for non-payment of rent if both parties have agreed to a repayment plan for the arrears, and the tenants don’t fail to make two consecutive payments on the plan.

Even if an impacted tenant has not complied with the terms of the repayment plan, the landlord must not evict them unless it is “fair and reasonable in the circumstances.”

Also, if there is no formal agreement to a repayment plan for the arrears, the landlord can’t evict an impacted tenant unless the landlord has tried to negotiate a repayment plan in good faith and it is fair and reasonable in the circumstances.

Fair and reasonable

So what is “fair and reasonable”.  That may well be decided by the Tribunal (NCAT) which will be obliged to consider the steps taken by both parties to negotiate a repayment plan, any payments already made towards the arrears, any financial hardship experienced by either the landlord or impacted tenant, including their general financial position,  the availability and affordability of reasonable alternative accommodation and any special vulnerability of the tenant.

All of which seems “fair and reasonable.” But it’s what happens after the transitional phase is over that has prompted Ms Finn to suggest a change to the NSW laws to match Victoria’s.

“Without addressing no reason eviction, it is possible landlords will evict tenants after the moratorium ends in order to re-let the property at a higher weekly rent. This could expose evicted tenants to overheated rental markets across the State,” Ms Finn said. “This Bill ensures landlords and tenants do the right thing by one another.”

The Bill would also have prevented retaliatory evictions, in which renters were thrown out after making multiple maintenance complaints.

Currently, landlords can evict tenants with no reason by giving 30 days’ notice in fixed term agreements and 90 days for periodic agreements. 

Grounds for eviction

The new Bill would have added three new reasonable grounds for eviction to the nine already in place: Need to occupy the premises, significant renovations and endangering safety of other residents,

These would have been in addition to:

  • Tenants’ use of premises for illegal purposes
  • Sale of premises
  • Breach of agreement
  • Non-payment of rent or charges
  • Serious damage or injury by tenant or other occupant
  • Threat, abuse, intimidation or harassment
  • Hardship to landlord
  • Termination of long term tenancies
  • Occupants remaining in residential premises

However, Minister Anderson dismissed the proposal, saying Labor was “orchestrating a pile-on on landlords when they’re already down just so they can score a cheap political point.”

NSW renters are entitled to wonder who’s scoring the cheap points, and at whose ultimate cost.

One Reply to “Tale of two states as ‘no fault’ evictions under fire”

  1. Jimmy-T says:

    If you want to start a discussion or ask a question about this, log into the Flat Chat Forum (using the Forum link on the menu at the very top of your screen). More people will read it there and you can more easily keep track of responses.

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