Northern Territory Second Reading Speeches

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RESIDENTIAL TENANCIES AMENDMENT BILL 2004


Bill presented and read a first time.


Dr TOYNE (Justice and Attorney-General): Madam Speaker, I move that the bill be now read a second time.

The purpose of this bill is to amend the Residential Tenancies Act. The Residential Tenancies Act commenced on 1 March 2000, and provides a framework of clear and consistent guidelines relating to residential tenancies. The act sets out the minimum terms of residential tenancy agreements, the procedures relating to bonds and the handling of security deposits, condition reports, and payments of rent. The act also provides Northern Territory tenants and landlords with a speedy and low cost avenue for the resolution of disputes through the Commissioner of Tenancies situated within the Consumer and Business Affairs Office of the Department of Justice.

With the passage of time, a number of issues relating to the operation of the act have been identified by stakeholders, including the Real Estate Institute of the Northern Territory, Territory Housing, and the Commissioner of Tenancies. This bill has been developed in consultation with these stakeholders to address those issues.

The act currently provides that a landlord or tenant may give the other a notice of breach of a tenancy agreement, and if the breach is not rectified by the date specified in the notice, the tenancy agreement is automatically terminated. This automatic termination can at times be undesirable, particularly if the parties come to an agreement but the notice is not withdrawn as required under the act. The bill amends the act so that if a notice of breach of tenancy agreement is given and the breach is not remedied, then application can be made to the commissioner or, as is currently the case in some circumstances, the court, for an order terminating the tenancy and giving an order for possession. This is similar to the situation in other jurisdictions.

The bill amends section 24 of the act so that it is permissible for a landlord to require the payment, or agreement to pay, outstanding tenancy debts arising from a previous tenancy as a condition for granting or renewing a tenancy agreement. The prohibition in section 24 of a landlord requiring payment of anything other than rent or security deposit is intended to prohibit the demand for, or payment of, key money and the like. It is not intended to prevent a landlord pursuing or requiring payment of legitimately owed monies before giving a tenant another tenancy. The main landlord to be affected by this change is Territory Housing.

The provisions relating to notices regarding unpaid rent will be simplified, and it is proposed that, in consultation with stakeholders, a prescribed or pro forma form of notice of unpaid rent will be developed. This form will be user-friendly and will set out all the relevant information a tenant needs to know in order to verify the arrears and rectify the situation.

Section 129(4) of the act currently provides that the commissioner may delegate his or her power to conduct inquiries, which are proceedings that lead to formal determinations of legal rights and responsibilities and are thus judicial in nature. The commissioner must, wherever practicable, only appoint a person as a delegate if that person has 10 years or more experience as a legal practitioner. It is proposed to reduce this level of experience to five years, which is considered more appropriate and will bring the act in line with the provisions of the recently commenced Business Tenancies (Fair Dealings) Act.

The act contains quite prescriptive provisions dealing with the giving and accepting of condition reports at the beginning and end of the tenancy. Whilst maintaining the general framework, the bill simplifies these procedures by omitting some of the requirements relating to the giving of duplicate copies of condition reports and the return of these duplicate documents by the tenant and, in some circumstances, the landlord. The amendments will continue to protect both the landlord's and tenant's interests, but with reduced requirements for exchanging duplicate copies of the same document. The proposed amendments have been developed in consultation with stakeholders.

In addition, the bill provides for the making of regulations which will permit condition reports to be given by way of video recordings or photographs, or similar types of recording. Similar rules as currently exist surrounding the giving of condition reports would continue to apply, such as the requirement to give a tenant a copy, and the right of the tenant to be present when the condition of the property is recorded.

A number of other small changes are made which are of a housekeeping nature. For example, section 107 needs to be amended to remove an incorrect reference to the commissioner having the power to terminate a tenancy under certain circumstances. This should, in fact, refer only to the court. Additionally, to remove any potential ambiguities, section 88A which relates to drug premises is to be amended so that it is clear that it applies to premises whose tenancies continue to be governed by the Tenancy Act as in force prior to 1 March 2000. These issues do not appear to have caused any practical difficulties to date, but the opportunity is being taken to fix these provisions.

Members will be aware that the Northern Territory is one of the few jurisdictions that does not have an independent tenants' advice service. The Commissioner of Tenancies provides an advice service to landlords and tenants but this service is, in practice, somewhat limited because the focus is often the administration of the act rather than the broader issues. The commissioner also has the power under the act to hold formal inquiries into matters of dispute and make determinations between landlords and tenants. Given this role, the commissioner must be careful not to compromise the independence of formal inquiries, particularly where advice is given and the matter later becomes a subject of a formal inquiry.

I am pleased to advise that the government has established a steering committee comprised of representatives from organisations such as the Darwin Community Legal Service, Shelter NT, Consumer Affairs, Territory Housing and the Indigenous Housing Authority Northern Territory to develop a proposal for the establishment and funding of a tenants' advice service in the Northern Territory. It is proposed the service will be funded from the Tenancy Trust Account established under section 16 of the act. The tenants' advice service will be independent and will undertake case work and community education, and provide community input into appropriate housing and tenancy policy issues. It is important that tenants in regional areas, including indigenous tenants, have access to such a service, and the steering committee will consider these issues. Such an advice service based on the community sector will provide a service to those most disadvantaged tenants in the Northern Territory including the aged, youth, people from non-English speaking backgrounds and indigenous people.

Experience demonstrates that the commissioner's office is not regularly accessed by these most disadvantaged tenants, whereas the community-based organisations such as DCLS and Shelter are well placed to provide assistance to these groups, many of whom seek assistance from these organisations which may be unable to assist due to funding constraints.

Section 16 of the act, which establishes the Tenancy Trust Account, provides that part of the fund established under the Agents Licensing Act can be paid into the Tenancy Trust Account to be used for the purposes of meeting the costs of administering and enforcing the act, and for educating landlords and tenants of their rights and obligations.

To clarify the situation for members, the fund established under the Agents Licensing Act is, in the main, an accumulation of interest on deposits paid by purchasers of properties which are held in trust accounts of the real estate agents and conveyancers. Additionally, depending on how the real estate agent structures their accounts, the income may also include interest on security deposits paid by tenants which are held in real estate agent trust accounts. These funds can properly be considered to be consumers' funds.

The fund currently stands at just under $9m. The fund contributes some $200 000 annually to the Department of Justice to cover the cost of operation of the Property Agents Licensing Section in Consumer and Business Affairs. It is reasonably clear from the second reading speech to the Residential Tenancies Bill in 1999 that section 16 was intended to permit the use of the Tenancy Trust Account to fund a variety of services to tenants and landlords, including the funding of the provision of advice services other than those provided by the commissioner. However, there is a suggestion that the wording of section 16(1) may not be broad enough to allow for funding for an advice service or services external to the commissioner. The bill contains an amendment to this section to remove any doubt that the Tenancy Trust Account can be used to fund a tenants' advice service. The outcome will be better advised and inform landlords and tenants, leading to better outcomes for residential tenancies generally and less demand on the commissioner's resources in formally determining disputes that could be avoided if tenants and landlords were better informed.

Madam Speaker, the amendments have, for the most part, been identified by those involved in tenancy as being desirable for the easier and more simple operation of the act, or to address some problems that have been identified since the act commenced in 2000. In developing these amendments I am grateful for the input of the Residential Tenancies Act User Group comprising representatives of the Consumer and Business Affairs and Policy divisions within the Department of Justice, Territory Housing and the Real Estate Institute of the Northern Territory. This group has been particularly helpful in assisting government with developing a balanced approach for consumers and businesses.

In order to sustain this resource for the government, it is appropriate I mention in the context of this legislation that the government will be developing a residential tenancies taskforce. The role of the taskforce will be to examine, in particular, the rights and responsibilities of tenants and landlords in the implementation of this legislation and the interaction between the tenancy agreements and the legislation such as noise abatement laws and environmental health requirements. Common and easily understood and enforceable clauses in tenancy agreements are essential. The taskforce will be charged with ensuring that this is realised in application. The taskforce will have Territory-wide application for private and public tenants and landlords alike.

Madam Speaker, I commend the bill to honourable members.

Debate adjourned.

 

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