Northern Territory Second Reading Speeches

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RESIDENTIAL TENANCIES AMENDMENT BILL 2001

Mr Speaker, I move that the bill be now read a second time.

When introducing what is now the Residential Tenancies Act into this Assembly, I stated that the bill struck a fair and equitable balance between the sometimes differing interests of landlords and tenants. Honourable members will recall that the Residential Tenancies Act replaced outdated law that had been subject to significant review and public comment. The Residential Tenancies Act commenced operation in March 2000 and I am pleased to report that the act overall is serving Northern Territorians well. It is striking that balance I spoke of in a fair and equitable way and it has been well received by landlords, tenants and real estate agents.

The act had a smooth implementation, and to ensure Northern Territorians are aware of their new rights and obligations, I am advised that over 11 000 copies of the new booklet A Guide to Renting in the Northern Territory has been distributed so far to landlords, tenants and real estate agents. The staff of the Commissioner of Tenancies have conducted a series of seminars for real estate agents, landlords and tenants. A program of individual visits to real estate agents is underway to ensure that the act and its application are clearly understood by those involved in property management.

The Commissioner of Tenancies advises that over 2005 enquirers comprising tenants, landlords and real estate agents have sort information and assistance from his office in relation to exercising their new rights under the act since its commencement. In addition, over 292 formal tenancy disputes have been addressed by his office under the new streamline dispute resolution provisions.

The bill I introduce today aims to correct a technical issue that has come to light in relation to a landlord’s need to continue to hold security deposit monies for a longer period in circumstances where a tenant has broken their lease and abandoned the premises. The act currently requires a landlord to return a security deposit within seven days of a tenant giving up possession of the premises. The landlord may first deduct any amounts owing for cleaning, damages, or unpaid rent. Under usual circumstances, this requirement operates well.

However, a problem arises with the current provisions where a tenant breaks the lease and abandons the premises. The landlord is entitled to apply to the Commission of Tenancies for an order for compensation against the tenant. This would equate to the amount of rent lost in the period between the tenant giving up possession of the property and it being re-let prior to the lease period expiring, together with any out-of-pocket expenses.

The landlord being required to return the security deposit within seven days of the tenant giving up possession of the premises in circumstances where the landlord may not know for some time how much needs to be claimed for lost rent and re-letting the premises is unfair. This is an unintended situation that operates to the detriment of landlords. It undermines the basic tenor of the act which is to ensure fair and equitable balance exists between the rights of tenants and landlords. The bill will amend section 112 to insert new provisions. The key change will be to allow landlord to continue to hold a security deposit in trust for up to three months from the time of a tenant abandoning the premises. During this period, the landlord will be able to determine the amount of loss of rent he or she has incurred and also the loss incurred in securing new tenants.

The landlord will, however, be compelled to make an application to the Commissioner for an Order for Compensation under section 112 of the act if he or she wishes to retain all or some of the security deposit to offset his or her loss. This amendment solves the problem that has come to light and I commend the bill.

Debate adjourned.

 

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