Northern Territory Second Reading Speeches

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RESIDENTIAL TENANCIES AMENDMENT BILL 2009

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

The main purpose of this bill is to provide for the regulation of tenancies in caravan and mobile home parks. It will provide long-term residents of these parks with the same level of protection and certainty other tenants enjoy. The bill also deals with a number of issues which arose as a result of a decision made by the delegate of the Commission of Tenancies in the matter of
Holdeth Investments Pty Ltd v Lorraine Ivinson and Raymond Halliday, (the Holdeth case).

Madam Speaker, part two of the bill amends the
Residential Tenancies Act to apply to caravan parks. As mention earlier, the aim of this part is to provide both caravan park owners and long-term residents with an appropriate level of certainty around long-term tenancies. It will give similar rights to long-term residences of caravan parks as for existing tenants of residential premises. However, despite the aim of ensuring consistency with other types of rental arrangements, there will be specific provisions relating to caravan parks, where appropriate, to accommodate the different circumstances and needs of such tenancies.

In developing these amendments it was noted all Australian jurisdictions, other than the Australian Capital Territory, regulate caravan parks to varying degrees. Additionally, the NT has had no clearly defined framework for the regulation of caravan parks since the Caravan Parks Act was repealed in 2002. This has caused uncertainty for both residents and industry as to their rights and obligations. It should also be noted there has been public consultation undertaken around these reforms. An Issues Paper was publicly released in 2008, and the responses have informed the drafting of this bill. Additionally, there has been further targeted consultation during the drafting.


The key amendment is the one made to section 6(h). Currently, section 6(h) provides the
Residential Tenancies Act does not apply to a caravan or a mobile home located in a caravan park. Clause 6 of the bill amends section 6(h), so the act will apply to caravans unless the period of continues occupation of the caravan is less than 90 days.

Other amendments contained in the bill comprise modifications to the current legislation to clarify how the act applies to caravans, and to address the specific kinds of caravan park situations which differ from those which apply for ordinary residential tenancies. For example, section 24 of the act currently prohibits payments other than rent or a security deposit for the grant of a tenancy. This bill amends section 24 so it is clear a caravan park owner can require the payment of a deposit for access keys, and other devices, relating to entering a caravan park or using the facilities of the caravan park. Other amendments along the same lines include those relating to the use and enjoyment of common areas and communal facilities.


Most of the provisions of the bill which are specific to caravan parks are contained in new Part 13A. The key provisions are those relating to park rules, resident committees, the obligations of caravan park owners, relocations and sale of caravans on site.


The bill permits caravan park owners to make caravan park rules. The coverage of these rules is limited to that set out in the proposed section 122C(2). They must only relate to matters such as common areas, noise, activities in the park, speed limits of vehicles, parking and motor vehicles, rubbish pits and structures. There is a capacity which permits regulations to be made that add matters to the list.


Each resident must be provided with a copy of the rules, and must be given notice of any changes to the rules. The Commissioner of Tenancies may, on application of a resident, order a rule is unreasonable. The Commissioner may then amend the rule to make it more reasonable.


The bill also provides for the establishment of resident committees to represent the common interests of residents. Owners will be obliged to consult with the relevant park’s committee, if one exists, prior to adding, changing or repealing park rules.


The bill also sets out some specific obligations applying to caravan park owners, such as supplying residents with park rules and providing instructions or manuals for appliances provided as part of the resident’s premises or common area facilities. New section 122J of the act also requires caravan owners to provide 24 hour vehicular access to residents and 24 hour access to bathroom facilities.


The bill regulates situations where a park owner wants to move a resident from one caravan to another. New section 122K sets out the grounds for imposing such a requirement. Reasonable notice must be given of any such requirement. What is reasonable notice will vary in the circumstances. Thus, if the reason for the move is that of an emergency, or for health or safety, or for compliance with a law, the period of notice may be very short. If the move is required for the park’s development, the period of notice should be much longer.


New section 122M of the bill also provides that a park owner cannot hinder or attempt to prevent the sale of a caravan. However, the resident, when selling a caravan, must tell the park owner of a proposed sale prior to the erection of a ‘for sale’ sign.


Another important new provision is new section 88B which allows for a caravan park owner to immediately terminate a caravan park agreement if there has been serious misconduct by a resident. If a caravan park owner chooses this approach rather than the more formal termination provisions under the act, he or she must apply to the commissioner within three days to have the termination validated. If the commissioner declares a termination invalid, he or she may also order the park owner to pay for costs incurred as a result of the termination – for example, accommodation costs.


This is to discourage vexatious termination applications from being made and is not intended to impact on the ability of owners to make reasonable emergency terminations. This new termination process is in recognition of the particular circumstances of caravan parks. Government agrees that caravan park owners require a way to be able to evict serious problem tenants more quickly than under the existing provisions of the act, which generally requires some form of prior notice. This is due to the communal nature of caravan parks and the impact that a resident’s behaviour can potentially have on other tenants and their privacy and ability to use and enjoy the premises without reasonable interference.


There was also some concern that the existing notice period of 14 days for terminating fixed term tenancies was not appropriate for caravan park tenancies. Residents of caravan parks should have a longer period of notice as the particular circumstances of many of their tenancies can make moving out of a caravan park site much more difficult. It is not always just a matter of packing up and leaving as with a house or apartment. Some caravan park residents have semi-permanent annexes and concrete sites; others have gardens and picket fences. Accordingly, for caravan park agreements, the notice period relating to the termination at the end of a fixed term tenancy has been extended to 28 days.


The overall benefits of the proposed bill are many. The main one perhaps is that it will provide a clear definition of the rights and obligations of both owners and residents that can be effectively enforceable. Second, it will provide structured, clearly defined and enforceable termination provisions. This includes the new emergency termination process to allow for the immediate removal of tenants who cause serious damage or disruption in a park.


Third, both caravan park owners and long-term residents will have access to the existing complaint and dispute resolution processes under the act through the Office of the Commissioner of Tenancies. This process is free of charge. Currently, there is no formal mechanism for either the tenants or the owners to enforce their rights. For example, at the moment, if a resident damages common property, the owner must take legal action in the civil courts. Under the proposed changes, the owner will be able to access the free process where the commissioner has jurisdiction to make orders for compensation up to $10 000. On the other hand, tenants will be able to access the process if they believe their agreement has been unfairly terminated.


The Office of the Commissioner of Tenancies will be involved in a long implementation process. This will involve an education process and development of forms to assist owners and residents to understand their new rights and obligations. It is not anticipated that the act will be enacted until mid-2010. Regulations will need to be developed and drafted to underpin the new regulatory scheme, including a default caravan park agreement and the necessary forms. Further consultation on these will be undertaken prior to the commencement of the scheme.


These reforms are particularly important with the current economic climate and housing shortage. It will put long-term residents of caravan parks on the same footing as other types of tenants. The regulatory framework has been developed to try to reduce costs as much as possible, while ensuring a maximum benefits to both caravan park owners and long-term tenants.


I will now turn to the second aspect of the amendment contained in this bill - operational amendments. The delegate’s decision in the Holdeth case was the property agent was acting in breach of the
Residential Tenancies Act when the agent increased the tenant’s rent under tenancy agreement using a memorandum of variation in circumstances where the method to be used for increasing the rent was not agreed by the parties at the commencement of the tenancy. This was despite the agreement of both parties to an increase of rent under the memorandum of variation. The use of memorandum of variation in this way has been a common practice of real estate agents in the NT over a number of years. A consequence of the delegate’s decision was increased rents paid under invalid memorandum of variation may have been able to be claimed back by tenants from agents and landlords, even where a tenant and a landlord had knowingly agreed to the increase rent.

The delegate’s decision was the subject of an appeal to the local court. A decision in the appeal was handed down by Magistrate John Lowndes on 5 May 2009. Magistrate Lowndes overturned the decision of the delegate, finding the use of the memorandum of variation in the case in question was, in fact, valid. The case raised issues concerning the equity of the landlords having to pay compensation for breaches of the act in situations where the breach may have been agreed to by the tenant, and where the breach was in the long-term interest of the tenant. The outcome of the case is such there is no need to amend the legislation to deal with potential breach considered in the case. However, the case raised a range of general issues around continued tenancies and the power of the commissioner or delegate to make certain orders.


Accordingly, it is appropriate to clarify and amend the powers of the Commissioner of Tenancies, so the commissioner will be required to take into consideration the fact a tenant may have agreed to agree to a breach of the act when determining the extent of any compensation payable to the tenant. This is a modest amendment to the act, having regard to the fact section 122(3)(b) already provides that a tenant’s consent to the breach of a clause of a tenancy agreement can be taken into account.


An additional power will also be provided to the commissioner to pay the reasonable costs of obtaining a valuation in order that a tenant may pursue a claim of excessive rent in a case which has sufficient merit. The commissioner must determine whether it is appropriate to make such a claim, and may take into account all relevant factors, including whether the tenant is financially able to cover the cost of the valuation or whether the application is vexatious.


Further amendments clarify an initial condition report conducted at the commencement of a tenancy will continue to be valid for the entire length of time a tenant, or one of the tenants to the original lease, remains in occupation of the premises, even if a new lease is entered into or the original lease is extended, unless a new condition report is made. However, the amendments will ensure a landlord cannot require a tenant whose tenancy has been, or is to be extended, to vacate the premises for the purpose of undertaking a new ingoing inspection and preparing a new ingoing condition report.


Finally, the schedule to the bill contains miscellaneous statute law amendments as identified by Parliamentary Counsel. These address minor technical matters only.


Madam Speaker, I commend the bill to honourable members and I table a copy of the explanatory statement.


Debate adjourned.


 


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