… there is no law against letting a tumble-down house. — Robbins v. Jones (1863) 15 CB (NS) 221, 240

This 1863 case, which to some extent influenced our current day tenancy laws has recently been given an overhaul by the Victorian Supreme Court decision that has held that landlords should ensure that residential premises are maintained in good repair, even if the property is dilapidated when the tenant goes into occupation. The decision is a persuasive case study on the importance of imposing minimum standards on the condition of rental premises.

Tenancy Laws: The Victorian Case

In the Victorian case, Vikki Shields, a disability pensioner, rented a house from Peter Deliopoulos for over five years. She was unable to afford any other property. The premises were in poor condition at the start of the tenancy and deteriorated further over time.

The catalogue of “repair issues” included holes in the floor, walls and ceilings; dampness and resultant rot; and rat infestation. The property was sinking in one corner. The condition of the property was described as “filthy” and “unusable”.

Ms Shields sought compensation for a breach of the landlord’s obligation to “ensure that the rented premises are maintained in good repair”.

tenancy laws. renting, landlords, real estateUnder Victorian law, a landlord must ensure that the rented premises are maintained in good repair, according to Section 68, Victorian Residential Tenancies Act 1997. The initial decision in the Victorian Civil and Administrative Tribunal (VCAT) confined the scope of the landlord’s duty to the condition at the start of the tenancy, irrespective of the state of repair. The VCAT decision referenced factors such as the rent payable and the tenant’s decision to stay in the property for five years (despite the fact she could not afford anything else).

On appeal to the Victorian Supreme Court, Justice Day noted that proper construction of Section 68 was a matter of some public importance because Ms Shield’s matter was the latest of several cases where landlords’ repair obligations were interpreted narrowly. Holding that the obligation was “strict and absolute”, the court concluded that landlords were required to identify and rectify any defects of which they were aware or ought to have been aware.

The court also held that relating the obligations of landlords to maintain premises in good repair to the level of rent payable was inconsistent with the consumer protection focus of the legislation and with equivalent legislation in other Australian jurisdictions.

This was a decision made in Victoria and may not affect other jurisdictions in Australia, but indicates the court’s willingness to protect tenants, particularly vulnerable tenants.

Do Existing Tenancy Laws Protect Tenants?

All tenants should expect premises conform to minimum community standards for health, safety and energy efficiency. Yet only Tasmania and South Australia have introduced legislation that provides for minimum standards and that certain amenities — which most people take for granted, such as cooking areas, a bathroom and hot and cold water — are provided in rental properties.

In South Australia, if a tenant believes a property has serious structural damage, he or she can seek an inspection by the Housing Improvement Branch and have the property declared substandard. It is suggested such provisions should be adopted in all states and territories.

Tenancy unions are now demanding the laws adapt to shifting trends, and get up to speed with the rest of the world’s tenancy laws.

“The biggest issue right now is that housing insecurity is built into our renting laws across Australia,” Ned Cutcher, senior policy officer at the Tenants’ Union of NSW said, in light of International Tenants Day. “Once you are outside of a fixed-term lease, a landlord can end your tenancy without giving a reason … what this does is it allows a landlord to mask reasons that may not be genuine or may not be considered good reasons to end a tenancy.”

The instances of tenants receiving these ‘no grounds’ notices of termination is common, said Mr Cutcher, and leaves many tenants living in fear to ask their landlord for basic repairs and maintenance.

tenancy laws. renting, landlords, real estateTenancy unions across the country have used International Tenants Day to promote the need for an overhaul of the Australian tenancy laws, with the theme of this year’s International Tenants Day centred around rental regulation.

Mr Cutcher said Australia lags behind many countries worldwide when it comes to the rights of renters.

“We look to places like Germany, France and Switzerland and see that tenants have got much better conditions over there. It is a basic proposition that as long as you keep meeting the terms of your tenancy agreement — you keep paying the rent, you keep looking after the place, you’re not causing problems with your neighbours, and the property remains for rent — you basically have control over the length of time you’re going to be able to stay in that property.”

And with a growing cohort of long-term renters, he says Australia should be following the lead of Europe when it comes to more stringent tenancy laws.

“One of the things with the European context is there are often a lot more people who do rent and rent for long periods of time in those places. But we are rapidly moving towards that kind of situation in Australia with the price of home ownership being out of reach for many. And that’s not going to change,” Mr Cutcher said.

According to a comprehensive study into the long-term private rental market in Australia conducted by Australian Housing and Urban Research Institute (AHURI) and released in July 2013, just over a third — 33.4 per cent — of all private renter households are long-term renters who have been living within the private rental tenure continuously for 10 years or more. However, this study drew on a survey conducted by the Australian Bureau of Statistics (ABS) in 2007—08, supplemented with an analysis of Waves 1 to 10 of the Household Income and Labour Dynamics in Australia (HILDA) Survey, meaning this number has no doubt increased well beyond one third.

Even more telling, the study showed that close to one third (30 per cent) of all long-term private renter households included dependent children.

But the struggles faced by residential renters doesn’t end there. On top of living in fear of being kicked out, renters are also paying top dollar for the privilege. Regulation regarding the cost of renting varies across different states in Australia, but overall, tenancy laws offer very little in the way of protection for renters. In Victoria, for example, a landlord can increase the rent as often as twice a year, and there is very little regulating by how much it can be increased.

“Tenants are really seen as second-class citizens and the landlord’s right to property really trumps the tenant’s right to a home.”

If you have questions about a lease, rental agreement or contract, please contact us today for your free, 10-minute phone consultation.