Page 1986 - Week 06 - Tuesday, 5 June 2018
investment properties. Many of them are being purchased by owner-occupiers, which is further diminishing the rental supply. Investment properties are for the purpose of making money. As much as property investors, for the most part, are wonderful people, they do not invest hundreds of thousands of dollars of their own money just to provide a community service for their fellow man. If you make it too hard for them to make money then they will not do it.
The minister very clearly does not understand that concept, that this is how the real world works. For some this change adds a fair bit of risk. It is all well and good to say that the lessor can go back to ACAT to seek a determination within 60 days of the first breach of the payment, but of course that does not mean that they will get straight into ACAT to do that because there is going to be a waiting period for them to get in. The minister cannot see that for some this change will be the straw that breaks the camel’s back, and he lives in a different world than I.
As I understand it, this bill has three main objectives, one of which is to repair an anomaly in the Residential Tenancies Act. It was highlighted in the Commissioner for Social Housing v Moffatt case. That was back in January 2015. The minister tells us the bill is needed to remove the self-executing provisions of the act. The current act enables lessors to regain immediate possession of their property if a lessee defaults on a rent obligation or defaults on a conditional termination and possession order. This bill makes the lessor’s attempt at repossession somewhat more complex. The bill adds a few extra steps, obstacles to barricade lessors from their property, and it makes it more challenging to recover rent entitlement.
On the other side of the argument, it gives a little more certainty for tenants going through a rough patch. The amendment bill means ACAT makes a payment order instead of granting the lessor a termination and possession order. Is a payment order preferable to a termination and possession order? It really depends on whom you are asking, does it not? Most lessors would take the TPO because they have got a mortgage to pay. If you are a tenant who has no intention—and I am not saying that in these cases, when they arise, every tenant has no intention—to address the arrears, it buys you some more free time, under someone else’s roof, before you have to move out. As much as the minister may believe that every tenant has every intention to make good any arrears, I have had dozens of discussions with lessors who express a different view. This bill will achieve a number of things. One of them is to load the ACAT up with more work, and it certainly will delay a final result for out-of-pocket property owners.
When the minister presented this bill he stressed the need for protection of vulnerable people and their residential security and he also spoke of the need to promote model behaviour by landlords. I agree that we should protect vulnerable people in precarious accommodation situations and, for this purpose, the government provides a social housing system and various other arrangements to help. I presume that, for people being supported by the social housing system, the government would only issue eviction warrants in extreme circumstances, including for some situations that are unrelated to defaulting on rent.