Residential Tenancies Amendment (Housing Standards) Bill

 Introduction and first reading

Mr BARBER (Northern Metropolitan) introduced a bill for an act to amend the Residential Tenancies Act 1997 in relation to the imposition of certain minimum housing standards and for other purposes.

Read first time.

 Mr BARBER (Northern Metropolitan) -- I move:

     That the bill be printed and, by leave, be read a second time forthwith.

Motion agreed to.

 Statement of compatibility

Mr BARBER (Northern Metropolitan) tabled the following statement in accordance with Charter of Human Rights and Responsibilities Act:

     "In accordance with section 28 of the Charter of Human Rights and Responsibilities (the charter), I make this statement of compatibility with respect to the Residential Tenancies Amendment (Housing Standards) Bill 2009."

     "In my opinion, the Residential Tenancies Amendment (Housing Standards) Bill 2009, as introduced to the Legislative Council, is compatible with human rights protected by the charter. I base my opinion on the reasons outlined in this statement."

     "Overview of the bill"

     "The purpose of the Residential Tenancies Amendment (Housing Standards) Bill 2009 is to empower the minister to set minimum housing standards for rental properties and rooming houses through regulations; and resolve disputes between tenants and landlords arising from these minimum standards not being complied with."

     "Human rights issues"

     "In amending the Residential Tenancies Act 1997, this bill does not hinder, but rather enhances the human rights of Victorians. The rights engaged by this bill are as follows:"

Section 13: privacy and reputation

     "Section 13(a) ensures Victorians have the right not to have their home and privacy arbitrarily interfered with. Division 8 of the principal act currently governs the landlord's right of entry and the Residential Tenancies Amendment (Housing Standards) Bill 2009 in no way affects the legal requirements with which the landlord must comply in order to lawfully enter onto the premises."

Section 17: protection of families and children

     "The charter entitles families and children to be protected by society and the state. This bill strengthens this commitment by providing vulnerable families and children with recourse to ensure their physical safety, health and comfort through the range of measures that can be enacted through regulations by the minister under clause 11 of the bill."

Section 20: property rights

     "This section prevents deprivation of property other than in accordance with law. While this bill would force landowners to repair, modify and upgrade their properties to meet the established standards, no deprivation of property occurs."

     "If the fungible of money is to be considered property then there is a compulsory extraction of property, but such deprivation is in accordance with the law in much the same way as paying for a roadworthy certificate to attain registration. Complying with these standards is simply an incidental statutory requirement of a landowner entering into a commercial relationship with a tenant. There are a multitude of statutory instruments that govern, or are incorporated into contracts -- the principal act being one such example. It is my opinion that this bill does not unlawfully infringe upon the property rights of landlords."

Human right to housing

     "The human right to adequate housing is included in article 11 of the International Covenant on Economic, Social and Cultural Rights, to which Australia is a signatory, but there is no corresponding right under Victoria's Charter of Human Rights and Responsibilities Act 2006."

     "Conclusion"

     "I consider that the bill is compatible with the Charter of Human Rights and Responsibilities because it does not limit any human rights in the charter. On the contrary, this bill further enhances the human rights of Victorians."

     "Greg Barber, MLC"

Member for the Northern Metropolitan Region

 Second reading

 Mr BARBER (Northern Metropolitan) -- I move:

     "That the bill be now read a second time."

This bill is about human dignity, human health and combating the increasing costs of living that will disproportionately affect the poor in our emerging carbon-costed economy. This bill is a simple enough measure -- it empowers the minister to set minimum standards for rooming houses and other dwellings occupied under residential tenancy agreements. This bill does not prescribe what these minimum standards are; this role is rightly left to the minister who has the resources at her or his disposal to investigate what standards should be implemented and how they can most effectively be targeted. This legislation is pointedly aimed to help those in the darkest corners of the housing market.

It would ensure that the places they inhabit have guaranteed minimum standards such as heating, insulation, lighting, adequate plumbing for sanitisation, security requirements and the range of non-exhaustive measures listed in clause 11. Such measures can also improve the energy performance of these dwellings, reducing costs to tenants.

It must be stressed, this bill is not intended to reposition the entire rental market, it is humble in its aims and only a small proportion of properties would be affected -- those that are in such a parlous state that they adversely impact on the occupants' physical and mental health and impose high energy costs for an inadequate level of comfort.

The introduction of this bill coincides with an important social push to improve housing conditions for Victoria's poorest, which is titled the Call This a Home? campaign.

This movement is supported by the Tenants Union of Victoria, the Council to Homeless Persons, the Victorian Council of Social Service, Anglicare, Hanover, HomeGround Services, the Public Interest Law Clearing House's Homeless Persons Legal Clinic, the RMIT human rights campaign workshop, the Rural Housing Network, the Sacred Heart Mission, the Salvation Army, St Vincent de Paul, Wesley Mission, Women's Housing Ltd, Yarra Community Housing, Wintringham, and the North East Housing Service. However, there is one more esteemed organisation yet to add its name to this list -- the Parliament of Victoria. I hope that, following a thorough debate, the institution that represents all Victorian people supports this crucial campaign.

There are approximately 4500 people living in rooming houses in Victoria, implying between 700 and 900 rooming houses across the state, and over 380 000 of Victoria's households are private rentals. The private rental market is largely an informal sector of small operators.

We also regularly hear concerning stories of informal rooming house or shared-accommodation operators. We know much of the rental housing stock is old, but data on its quality is limited. However, we are regularly presented with stories of people living in appalling conditions that offend public standards and expectations. This bill will provide the impetus for the state government to conduct further research so as to determine the standard of housing stock and an appropriate minimum standard that will improve housing at the bottom end.

This measure is also crucial because the absence of minimum housing standards means those operators of substandard dwellings can extract a maximum profit, with little regard for the utility costs, safety or amenity of residents. This bill will oblige these operators to upgrade their properties to meet the standards set by the minister.

There are two main functions that are established by this bill. Firstly, it vests in the minister the power to set permanent or temporary quality standards for either rooming houses or regular tenancy agreements or both. The second function that the bill provides for is a series of dispute procedures if the landlord does not voluntarily take steps to bring the premises up to the declared standard. The tenant is able to instigate the process by informing the landlord they have not met the required standard. If there has been no action after 28 days, the tenant can inform the director of consumer affairs, who is then obliged to inspect the premises and file a report within 28 days. If the report declares that the dwelling does not meet that standard, then the aggrieved tenant can seek an order from VCAT that the premises be brought up to that standard. The tenant may also seek an order that they withhold their rent from the landlord by paying it into the rent special account.

Some may argue division 6 of the Residential Tenancies Act adequately covers what this bill intends to do. However, division 6 is limited to fixing what is broken -- the rewiring of the heater, the leaking plumbing creating mould behind the washing machine, the outside light that shows who is about to knock on your door. What division 6 does not give is assurance that these services will be provided in the first place. Worse, if a tenant is demanding repairs to existing features, a landlord can issue a 'no reason' notice to evict the tenant and, in between tenancies, remove the feature. The duty to repair has also vanished!

Regulations provided for under this bill can also help remove the grey area that exists between 'repair' and 'inadequacy'. If a door was built with a 1-inch gap through which wind bellows, it does not need 'repairing' under the act. If the door has become warped during the tenancy and has created the gap, then, according to the existing act, it is in need of repair.

Another deficiency in the principal act that this bill intends to correct is found in sections 65 and 68(1). They provide for the house to be in a 'vacant and reasonably clean condition' and to 'ensure premises are maintained and in good repair', respectively. These provisions have been read down by VCAT and the courts as applying narrowly, so that the ability of these provisions to provide respite for occupants of dilapidated dwellings is extremely limited. Even if an aggrieved tenant under the current act was successful in proving that the state of their home breaches the act, the only remedy available to them is termination of the tenancy agreement. These amendments to the principal act at section 71D offer the alternative remedy of requiring the landlord to improve the quality of the premises, while the tenant is entitled to keep the tenancy agreement and so not be made homeless.

The advantage of regulations that set a minimum standard is that they provide guidance as to what is 'habitable'.

Another improvement that this bill offers is rectifying current dispute procedures whereby the burden is on the tenant to prove the dwelling is uninhabitable. Under this new scheme through section 71C(2), the director of consumer affairs' assessment can be submitted as evidence, easing the tenant's task of proving where they live is uninhabitable.

South Australia currently enjoys a regulatory housing quality scheme in their Housing Improvement Act 1940 and regulations have been enacted under the Housing Improvement (Standards) Regulations 2007 which set certain requirements for kitchens, laundries, toilets and bathrooms, water supply, sewerage, electricity and gas and building designs. Failure to comply with the regulations can result in a declaration that the property is unfit for habitation under the act. Here in Victoria, regulations that could strike out properties as unfit for habitation date back to 1939. These were issued under the Slum Reclamation and Housing Act 1938.

These procedures then continued through the decades in both the Housing Act 1958 and the Housing Act 1983 but the last set of regulations issued in 1985 lapsed in 1995 and such measures were never inserted into the principal act.

The most recent regulations issued under the Housing (Standard of Habitation) Regulations 1985 applied to every house in Victoria and ensured sanitation, water supply, drainage, shelter, light, ventilation, cleanliness, freedom from damp, laundry facilities and structural soundness. While some of these standards now appear in other forms such as the building code, which applies to newly built premises, and the Health (Prescribed Accommodation) Regulations 2001 for rooming houses and hostels, many of the standards that once existed are today extinct.

This bill intends to plug the gaps that currently exist in Victoria's housing regulatory framework and need not duplicate regulations under other acts.

This bill will return to landlords a legal responsibility of ensuring their properties are of an adequate quality. This bill is modest in its aims and will provide security to our state's poorest and most disadvantaged. This bill in and of itself does not impose any cost. The financial burden for operators of substandard dwellings will be determined in the processes of setting regulations that are to be issued by the minister, no doubt, after a regulatory impact statement.

'Who should bear the cost and gain the benefits?' The purpose of this bill is to share equitably, the costs between landlords and tenants while capturing the broader benefits to society such as the avoided health costs that arise from the correlation between draughty, poorly sanitised houses and ill health. The task for the minister in setting regulations is to select those measures that generate a net benefit to society as a whole.

Tenants and landlords are free to enter into contracts and the amount that someone is willing or able to pay will result in a commensurate quality of living. But as with contracts for many other goods and services there is a baseline below which philosophies of contract can no longer be ethically applied.

Health, safety, quality, coercive power and unconscionable terms have been regulated in areas such as food, finance, working conditions, purchase of major items, contracts of sale for property and many other categories. Freedom of the market in theory allows the tenant to decline and choose somewhere better to live, but one need only examine recent media coverage or look at the waiting lists for housing to realise that the conditions at the cheapest end of the market are dire. Those tenants have nowhere else to go. In a race to the bottom, and without a minimum baseline, governments are inviting the horrid conditions that further exacerbate disadvantage.

The other major concern being tackled by this bill is the increasing cost of living, particularly in Australia's emerging carbon costed economy. The growing price of energy consumption will be hardest felt by those without the opportunity to invest in energy conservation measures to shield themselves from those costs.

There is a split incentive between tenant and landlord; one pays the power and water bills, the other maintains and upgrades the energy-using features of the property. Landlords can claim these expenses as a tax deduction, and can also access the relevant government rebates.

Depending upon the type of standards the minister issues, landlords will be required to invest in features that lower the water and power utility bills for their tenants. Setting insulation, heating, water and energy efficiency standards can be a targeted way for thousands of vulnerable Victorians to lower their climate impact and improve their household budgets. If the Parliament adopts this bill, the social equity and environmental benefits for Victoria would not only be far reaching, but will also drive continual improvement of living conditions into the future, in the same way that the 1939 'depression era' regulations have fashioned the type of houses many of us occupy today.

The dignity of all Victorians will be lifted in the knowledge that the most vulnerable in our society are entitled to a minimum standard of housing and protection.

To remind the members of this house why this legislative measure is so necessary and important, I would like to close by reading an article dated 14 October 2006 where the Age, and I quote, 'uncovered a world where ... government money is funnelled into the pockets of proprietors, including convicted sex offenders, and real estate agents turn a blind eye as they do business with the managers of substandard dwellings'. Half a year later in July 2007, in its residential accommodation issues paper, the Victorian government stated its commitment to 'providing the framework for a fair, transparent and efficient residential accommodation marketplace' and 'committed to enhancing protection for tenants'.

This Parliament, through this bill, can provide valuable legislative assistance to the government so that they may achieve their aim, and for that reason I commend this bill to the house.

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