Fair Trading Minister Ms Virginia Judge

Fair Trading Minister Ms Virginia Judge

N.S.W.Fair Trading Minister Virginia Judge’s announcement of relief for renters affected by bank foreclosure does not go far enough. The ministers announcement will give tenants 30 days notice, rent refunds for advance rent and no rent payable in the notice period, together with removal expenses. While this measure will undoubtedly ease the pain for a few, and doubtless keep those with perfect rent references and the money to pay the ever soaring rents demanded, even as properties fall in value, the core issues for marginalised people as well as perhaps the majority of renters remains unaddressed. These laws further exacerbate the chronic instability that is already todays norm in the rental housing market. Many agents routinely evict tenants after six months, simply because they can increase rents on that property. Excellent tenants report being offered similar properties in similar locations at a premium to their current rent by the same agent, only to find their old rental property beng released for rental a week later at $80 to $100 more. Removal and relocation costs, regularly in the order of $4000 per move, have become an unwelcome twice yearly expense for many renters.There is the additional uncertainty and expense associated with securing new tenancies, in monetary, time and emotional terms. 

 The fair trading ministers rent reforms are obviously very positive for Banks, who can now say that there is a government program which they are compelled to follow. The real estate industry would we think approve also as it creates the opportunity to create further churn in property sales and rentals. This would be of little solace to the renter who has been in residence for two weeks when the bank forecloses.Our view is that once again,the State Labor Government has got it wrong, if it were that governments intention to act in favour of tenants. The response typifies the sad debacle State Labor has become; so bad that they cannot even get running a foodvan service for homeless people right.

 The commonsense, equitable solution for tenants is for all parties to a property’s ownership, including the mortgage holder, to be held to be party to the rental agreement. The mortgage holder, after all, would in the normal course of vending the loan product, give contractual consent for the property to be rented.Flowing from that contractual consent would be the mortgage holder’s obligation (as mortgagee-in-posession) to honour any subsequent contract (the tenancy agreement) entered into by the defaulting owner. This solution prioritises security of tenure for both the tenant and the mortgagee-in-posession.The property can still be sold with the sale subject to the tenancy agreement.There has always been leeway for tenants and owners to negotiate equitable terms for early termination.

 Especially at the lower end of the rental market, where there is a dearth of properties in suitable locations, it may take months for a low income family to secure suitable alternative accommodation.This is the sector that most homeless marginalised or at risk of homeless people and families would be affected. The challenge for State Government is to ensure that suitably priced accommodation is  available for renters in locations where it is required, as compared to compelling people to confinement in particular areas on the basis of income.