Whilst I appreciate that it's a lengthy speech, there are some very interesting issues raised by the Shadow Minister for Fair Trading, Greg Aplin MP around the latest changes made to the proposed NSW Residential Tenancy Bill 2010 (which has already been passed through the Lower House unopposed and was put to the Upper House of the NSW Parliament today).

Here's Greg's speech...

Mr GREG APLIN (Albury) [4.27 p.m.]: Few bills passing through Parliament this year will have greater impact on the daily lives of ordinary citizens than the Residential Tenancies Bill 2010. This bill and this debate are important. Currently, there are approximately 800,000 rented residential properties in New South Wales, regulated by the Residential Tenancies Act 1987 and the Landlord and Tenant (Rental Bonds) Act 1977. No significant amendments have been made to these laws since their introduction. This is the first major reform in 23 years.  

It has been a long, drawn out process, with an options paper in 2005, followed by public submissions and a report back in 2007. More than 1,600 submissions were forwarded to Government and 102 reform proposals were announced. Before delving into the detail of the bill, let me draw from my studies in literature to provide a contrast in approaches to issues of the day. Which writer wrote, "No man is an island"? Which writer wrote, "Any man's death diminishes me, because I am involved in mankind"? Which writer wrote, "Never send to know for whom the bell tolls; it tolls for thee"? These three famous insights all derive from just one person, the poet John Donne. My next question is: In which three poems do these quotations appear? This is a trick question. In fact, all three come from the same meditation. But that is not the end of this trail. Amazingly, all three were dashed outin a mere couple of sentences. Though often quoted by individuals on any number of occasions as separate, pithy sayings, they were written as part of one short paragraph. Would that any of us might one day express so much insight into humanity while speaking with such brevity. 

Now, with the reform of residential tenancies legislation, the Government has chosen a different view of human society than that so brilliantly and incisively declared by John Donne. The draft of the Residential Tenancies Bill 2009 was a written expression of a philosophical view that tenants can prosper on their own, without considering the impact on their landlords; that the best way to achieve gains for tenants is to bludgeon their landlords into accepting unreasonable and, frankly, humiliating conditions; and that a government can seek to carry on with its plans in ignorance of the warning bells tolling loudly in the rental marketplace. 

Today I say to the Government: The bell tolls for thee. I have two salutations to deliver to the Government: the good news and the bad news. First, the good news. I thank the Government for making so many fundamental changes to this bill. I thank the Government for listening to what stakeholders have argued for and to the arguments raised by the Opposition through what the Minister has termed its "scare campaign". I am pleased that the Government has so diligently taken note. However, the second salutation is more pointed. I must admonish the Government for wasting the time of so many people with its draft bill. What was the Government thinking when it released that document?

Around the State people have been meeting to work out how to live with that draft bill. One of my staff attended a local meeting of mum and dad landlords held in a room above a pub in Albury one night. There were 25 landlords in attendance—retirees, self-employed people, employees, a biker and a journalist—brought together on just a couple of days' notice by an agent whose property managers were attempting to explain how the bill would radically complicate and change their lives. People were upset that even as they were weathering the storm of six interest rates the State Government was working to take away control over so many aspects of maintaining their rental property. The Government's draft bill did not make that form of investment attractive within New South Wales. My office has been flooded with correspondence on this issue—from the Blue Mountains, Five Dock, Lane Cove, Gosford, East Ryde, Coffs Harbour and Voyager Point, and even from concerned investors currently overseas.

One couple wrote:

I would like to lodge my strong objection to the Residential Tenancies Bill 2009. As landlords Val and I are really concerned with the changes to allow sub-letting, 'cosmetic' changes (not clearly defined) and the proposed changes to fixed-term tenancies. I understand there are some shonky landlords out there and tenants need protection from them.   I believe the majority of landlords do the right thing by their tenants, we are protecting our investment. The tenant has more rights than the landlord. We will not be able to protect our property from tenants who have been given the green light to do as they please. I feel the Bill is taking away any incentive to invest in rental properties.

Another person wrote about the draft bill:

My 80+year old mother has a 2-bedroom house which she has been renting out at below-market price for the past 40 years. She has accepted that tenants will not keep the gardens as they originally were, but expects the lawns to be mown. Her current tenant has been removing the fencing with the adjoining property because it isn't liked. The front door had 1.5cm removed from the lower edge because it would not open properly. The tenant had placed a thick rug on the inside near the door and expected the door to open over it. My mother was then expected to pay for the door treatment and the following request to provide a breeze stopper. And this is occurring under the current legislation. How will she stand if the proposed Bill is passed? She has already indicated to her managing agent that she would rather see the house left vacant than have tenants able to treat her property as their own. In her town, that would mean one less rental place. Not much? But how many more will do the same?

Another person wrote:

I am retired and living on income derived from residential property and the legislation that is proposed I believe would limit my security of rent and ability to secure good tenants and maintain my investment in a decent manner.

I received the same response from another correspondent who wrote:

From what we have read it would seem the tenants will have more rights than the owners of the properties. If this happens we will have to give serious thought to removing ourselves from the investment property market. It wouldn't surprise us if a lot of investment owners decided to do the same. It would just not be worth it. By the way - next year is election time.

Another correspondent stated:

I am an Australian expatriate, temporarily living abroad who owns, co-owns, or has owned five houses or apartments in NSW (three) and Victoria (two) that have been, or are currently rented. Should the Bill becomes law without significant amendment, it is highly unlikely that I will continue investment in residential property in NSW.

I quote one final piece of correspondence: 

Having seen the OFT website and proposed legislation: Landlords/property owners are the "evil ones". 

Business stakeholders have written to me also, often furiously. I quote a brief note from an insurance broker:

These changes may require a rethink by insurers in regard to how they treat landlord insurance claims involved in sub- letting.

In a letter to the Minister dated 24 March 2010 the Australian Livestock and Property Agents Association—the national peak industry body for livestock and property agents, whose members are actively engaged in the sales and marketing of regional and rural properties, including tenanted properties—wrote: 

In the current economic climate and coming out of one of the worst droughts on record where property taxes, capital gains tax, income tax already contribute to the strain on returns on investment for landlords, anything that takes away an owner's rights will see owners seeking alternative safer investment opportunities such as the share market and take investment out of rural areas of NSW.  Rental accommodation is hard to find in many rural areas now, to the point of being critical. ALPA believes that the Bill will have a very big negative impact in country areas causing people and businesses to move away from country towns eroding the fabric of the community.  The Bill will lead to a greater amount of disputes and country people do not have the same access as their city cousins to the tribunal that is now already overloaded. This fact will only add further costs, delays and frustration to the landlords and tenants in rural NSW. 

I have had lengthy meetings with concerned stakeholders, from the Real Estate Institute to the Property Owners Association, the Tenants Union, the Institute of Strata Title Managers and the Law Society of New South Wales. All were seeking assistance to modify the draft bill to make it fairer and, frankly, more workable in the marketplace. What a waste! Now that we have the actual bill in front of us I must admit I am amazed. This is nothing like the draft bill—it is an about-turn. This is much more like the bill we should have been presented with first. Perhaps the Government should apologise to tenants and landlords for wasting their time with such a poorly considered draft bill. 

I turn to the bill now before the House. The bill covers people under residential tenancy agreements and excludes those in areas such as backpacker hostels; serviced apartments; hotels or motels; boarders or lodgers; student accommodation; respite care, hospitals or nursing homes; or part of a club used for temporary accommodation. The bill will repeal the Residential Tenancies Act 1987 and the Landlord and Tenant (Rental Bonds) Act 1977. The stated aims of the bill are to fairly balance the rights and obligations of tenants and landlords; to modernise and update the law in line with current practices; and to reduce the level of disputes by providing greater clarity and certainty in the legislation. 

At least 1.2 million Australians—one in 10 taxpayers—are also a landlord to someone else. No longer can residential property investment be regarded as the domain of the rich and privileged, as the Minister should know, having heard back from other Labor members about the distress the draft bill has caused in Labor seats. The rental sector is a vital part of how many, many families prepare for a financially independent retirement, and it must be fostered by an astute government. New South Wales has one of the highest proportions of people living in rental homes in Australia, with about one-third of the community renting their homes. Nationally that figure falls to 22 per cent. Those interests need protecting too. 

When I hear a horror story about how a tenant has come home from holidays or from a necessary absence only to find himself or herself caught up in a warrant for possession, I have a sense of enormous sympathy for that person or family. How unjust are our laws! When I hear a horror story about how a landlord might lose his or her investment property because a tenant is abusing the terms of the residential lease while the Consumer, Trader and Tenancy Tribunal lets proceedings drag on and on, I have a sense of enormous sympathy for the landlord who is going broke. How unjust are our laws!   

It is possible to have feelings running in both directions at once—that is normal and human. But danger bells ring when those in power draft laws and regulations based on the horror stories rather than on what rights, responsibilities and processes will work, in most cases for most landlords and tenants of goodwill. Unfortunately, while attempting to address certain areas of genuine concern where tenants are vulnerable, the bill introduces new inequities, reduces certainty, will probably result in increased traffic through the Consumer, Trader and Tenancy Tribunal and creates yet more red tape to master. 

There are many provisions in the bill that are worthwhile updates of the 1987 Act, providing greater certainty for tenants and allowing them increased freedoms to make the property their home. I will comment on a few sections. Let us look at the issue of professional cleaning. While a lease can no longer include a term making professional carpet cleaning mandatory at the end of a lease, a new section 19 (3) will apply when the landlord permits that tenant to keep an animal on the premises. That is a fair approach. 

However, because of what I assume is a drafting error, that means there can be a requirement for professional carpet cleaning when the landlord has approved the keeping of a pet by the tenant but not when the tenant has kept a pet without informing the landlord or seeking approval. Section 19 should be amended so that a lease can incorporate a clause requiring professional carpet cleaning whenever a tenant has kept an animal on the premises, irrespective of whether the tenant has sought permission. I am sure that that is purely a drafting error.  

Under proposed section 33 (3) a landlord cannot appropriate rent to any other purpose. The bill amends the draft to insert the word "knowingly" in the context of appropriating that money. That is sensible, but still leaves landlords in a difficult position when a tenant owes money other than rent—such as for making good a minor alteration—and refuses to pay. The bill does not address these problems of tenancy living. A proper updating of the 1987 Act should make some of these difficult financial dealings less problematic. 

Under proposed section 39 water usage charges can be passed onto a tenant only if the landlord provides "water efficiency measures prescribed by the regulations for the purposes of this section". This is a worthwhile update, but landlords are still concerned about what this means and what happens if they cannot take advantage of modern water-saving technologies. The Minister indicated in her agreement in principle speech that:  

It will not impose a significant cost on landlords. While the efficiency standards will be set by regulation, it is envisaged that Sydney Water's Waterfix service, costing only $22, would be sufficient to make rental premises water efficient. 

If so, this plan seems realistic and affordable. However, many rental properties are not suitable for the $22 Waterfix service. An example is those premises with side waste piping on the toilet bowl. Without changing the bowl, one cannot simply adjust the cistern. It will be up to the Government to address these concerns in the regulations so that landlords are not saddled with unrealistic expectations. On the matter of these expectations, one landlord from north-western Sydney had this to say in response to proposed section 39 of the bill: 

The need to make a rental premises 'water efficient' is ludicrous. We have fitted such water efficient measures to a number of our rental properties with the following results:  

There was no reduction in the water usage at one property, following fitting of such devices and when inquiries were made, we were told that they just took longer showers "because the shower head let out less water". 

At another property there was a reduction of water usage, but not because of the fitting of such water efficient devices, as upon handover of the property at the end of the tenancy, we found that the water efficient shower head had been replaced with a conventional one and that the tenant had saved on water by not bothering to water any garden beds and hence all the gardens were destroyed.   

Upon changing tenants at another property, the new tenants' water usage was approximately 70 per cent that of the previous tenants, with no changes having been made to the property and with the same number of occupants. 

The landlord concluded by stating: 

If a tenant is serious about reducing their water usage, they can do so more effectively without such water efficient devices, because they are choosing to do it for the right reasons, and because they want to do it. If a tenant does not want to save water, no amount of water efficient devices will get them to do so. We see this as just another way that a tenant (who wants to frustrate a tenancy agreement) can shift blame for a problem onto the landlord, rather than being accountable for their own situation and for their own failure to apply water saving techniques. 

An amendment to paragraphs (c) and (d) of section 51 (3) adds that the level of cleanliness required on vacating the premises is by having regard to "the condition of the premises at the commencement of the tenancy". That is fine, and a similar qualification also applies to the obligation to remove rubbish. Unfortunately, the bill does not address the not-uncommon fight that develops over cleaning and rubbish. Here is a missed opportunity to give detail to a reforming process. 

Proposed sections 70 to 73 place new obligations on landlords to provide secure premises. This means locks, security doors and perhaps more. The test is "reasonably secure" and is defined in proposed section 191, but without reference to items such as alarms, bars or whatever this might mean. The obligation remains uncertain. Will members of the Consumer, Trader and Tenancy Tribunal sitting in regional New South Wales make appropriate allowances, both for relevant level of security and much lower rent income that must pay for these things? Once again, this is a good principle of benefit to tenants but without the necessary practical guidance for landlords. And everyone will be off to the Consumer, Trader and Tenancy Tribunal again. 

The provisions relating inspections for the sale of premises was a mess in the draft bill. Various amendments in proposed section 53 have helped tenants and landlords. Gone is the undesirable fallback position of the draft bill that meant, despite the rhetoric of previous clauses, in the end the landlord need only give 24 hours' notice of an inspection to show prospective purchasers through the property. There was no limit to the number of times this intrusion could take place. Fortunately, this has been amended and a limit of two times per week inserted, with the notice becoming "not less than 48 hours". Overall, this is fairer and clearer. However, members should note that the draft bill there was a 20 unit penalty applicable to a tenant who unreasonably denied an inspection. This has mysteriously disappeared from the bill.  

Proposed section 68 relates to minor alterations. This provision has also been a source of much controversy. In principle, there is some merit in providing a process for a tenant to adapt the premises to their needs, such as a disability or simply getting older, or to personalise their living space, in the face of a landlord who unreasonably refuses permission. Despite amendment, the provision remains problematic. The word "cosmetic" has been removed, but not the concept of a "minor renovation". These words, too, should be removed. Proposed provisions clarify that a landlord's failure to consent is not unreasonable "if the work involves work that would not be reasonably capable of rectification, repair or removal", or "if the work involves internal or external painting of the residential premises". The landlord can continue to reasonably exercise control over painting. However, some would argue that the list of what is minor and what is "not unreasonable to refuse" could be expanded to the mutual benefit of tenants and landlords, helping to keep them out of the tribunal.

The Minister says this provision is all about handrails for the frail, latches to protect children or planting a few flowers. Then why not include them in the list? Investors are rightly concerned that the Consumer, Trader and Tenancy Tribunal will permit alternations that may have costly repercussions. At what point does the simple picture hook mean one must patch and repaint an entire wall? Some wall surfaces will always show their history, despite a coat of paint. Can one repaint just one wall, or will future tenants baulk at a flat where the walls have different shades of paint?  

Many of these problems can be overcome with a more carefully designed compensation process. The bill fails at this point. Some alterations should be allowed by the Consumer, Trader and Tenancy Tribunal only when money to reinstate the property is provided up front. It is not good enough to leave the issues of reinstatement and financial allowance until the end of the tenancy, as the bill does. At that point there may be other issues separating the parties, such as overdue rent. It would be helpful if the bill addressed these issues. It might be appropriate, both for tenant and landlord, that a rectification sum be agreed upon before work commenced, and that the money was added into the bond as a separate category of account. Landlords would know there was money in hand for the repairs or restoration, while tenants would have clearly limited their potential financial exposure. 

Some correspondents to my office have also highlighted the legal liability concern that underlies this reasonable- sounding new benefit for tenants. The question is: Does proposed section 68 increase the risks of the landlord, for any personal injury or damage caused by the tenant's minor alteration? A real example was pointed out to meof a handrail that fell off when a person leant on it. Here there is potential for injury. Who will be sued? Will courts say the landlord has authorised the alteration and then negligently failed to ensure the work was carried out to a high standard?  

There does not appear to be a process in the bill, or for the Consumer, Trader and Tenancy Tribunal to follow, for a landlord to control the alteration process, by requiring, for example, that a licensed tradesperson carry out certain work—outside of electrical and plumbing work, which are illegal if not performed by a licensed contractor. Even cheap and minor window locks, if fitted incorrectly, can render an aluminium window frame ugly and with holes that cannot be adequately repaired. Although the amendments dealing with procedures for a co-tenant to move out may cost landlords, it is sensible to develop a procedure for a co-tenant to move on, finally limiting their personal liability to the landlord. This is provided by proposed section 101 and arises only when the fixed term is over or the lease is periodic.  

There have been problems with some agents or landlords imposing inflexible and costly rent procedures. Under proposed sections 35 and 36, a landlord cannot compel payment by cheque that is post-dated. Further, the landlord must allow the tenant to pay rent by at least one means for which the tenant does not incur a cost and which is reasonably available to the tenant. It is a helpful move to stop the compulsory use of third party agencies and rent books. However, almost every method comes with a bank fee, for example. This oversight, as pointed out to the Government, has been amended by addition of the words "other than bank fees or other account fees usually payable for the tenant's transactions". This is another helpful clarification adopted by the Government from the scare campaign. And there are more.  

There has also been some welcome clarification of a problem raised by the draft bill about receipts. In circumstances where rent payment is made by cheque, it became incumbent on the landlord or agent, within seven business days of the payment, to give the person making the payment a rent receipt. This was seen by many as an unnecessary administrative burden in the case of payment by cheque, where there was already a documentary trail and when it was not uncommon for tenants to show no interest in obtaining a physical receipt.

The bill improves the draft by saying that a receipt need not be delivered but it will suffice if it is available for collection by the tenant. However, once again there appears to be a drafting error. The new provision applies only to rent paid by cheque handed over in person. The draft bill also talked about rent payment by cheque through the post. Proposed section 36 (2) should be amended to bring the receipt provisions for payment by cheque, whether delivered in person or by post, into line. What appears to be a second drafting error in the receipts division of the bill is the deletion of draft section 37 (4), which said:  

A person must not make an entry in a rent record that the person knows is false or misleading in a material particular. Maximum penalty: 20 penalty units. 

I would support the retention of this provision. False recording of rent payments is to be discouraged. Why did the Government remove this subsection? It must be an error. I would like to see draft section 37 (4) reinstated as a protection for tenants and as an encouragement for good practice. New section 41 has been reworked to clarify that notices of rent increases can be given either by the landlord or the landlord's agent. This is a welcome amendment. However, I am puzzled by the new section 41 (2), which states: 

Notice must be given by the landlord or the landlord's agent of a rent increase proposed during the term of a residential tenancy agreement and of a rent increase under a proposed residential tenancy agreement between a landlord and one or more of the landlord's existing tenants.  

Does this subsection develop a process for differential rents within the same premises? Is the Government envisaging that co-tenants could be charged different rent amounts? This subsection should be amended to clarify its meaning within the process of rent increases. New to the bill is the clarification by proposed section 43 (1) that a rent reduction may be requested by a tenant where services or facilities were provided under a separate or a previous contract, agreement or arrangement. This is fair as there is often a wider context to what services or facilities are available. A second amendment, in proposed section 44 (5) (h), provides that the tenant's income or ability to afford the proposed rent increase is not a relevant factor in determining whether a proposed rent increase is excessive. This too is welcome as a protection for the privacy of tenants.  

Finally, the Government has seen fit to take action on problems surrounding the use and operation of tenancy databases. These can be useful—indeed, necessary—but can also be abused and deny people the right to accommodation. Part 11 of the bill gives power to the Consumer, Trader and Tenancy Tribunal to determine disputes—a place where tenants can find out what is going on with their tenancy records. It is about time. However, I do not think this Act will be the end of disputes surrounding tenancy databases.

I welcome the new information provision sections of the bill. By section 26 (4) the landlord must give the tenant an approved information statement, currently the renting guide prepared by the Office of Fair Trading. The landlord must ensure the tenant has a written agreement at commencement of the agreement—by section 14 (1)—and the lease may be in a standard form prescribed by the regulations under section 22 (a). However, section 27 (1) compels a landlord, even where there is a managing agent, to provide the tenant with personal contact details such as their phone number. The point of having an agent is to place separation between landlord and tenant. Tenants, too, do not want to be compelled to give their phone numbers or email addresses direct to their landlord as a means for communication. This provision of proposed section 27 (1) should be amended to be voluntary.  

Some provisions in the bill are designed primarily to benefit the landlord. Let us look at defects in termination notices. First, it is appreciated that by the amendment of section 113 (b) the tribunal can make a termination or other order even though there is a defect in a termination notice, or in the manner of service, given either by tenant or landlord, provided the recipient of the notice has not suffered any disadvantage because of the defect, or service, or where the defect can be overcome by an associated order of the tribunal. It is helpful that there is now clear power to fix minor procedural defects and not send the parties back to the start again. The application of this principle will be improved if the Government amends section 113 further, replacing the word "and" with "or" where it falls between subclauses (a) and (b), so that a notice or service defect can be remedied by the Consumer, Trader and Tenancy Tribunal because the member thinks it appropriate to do so in the circumstances of the case or where no disadvantage will be suffered. I recommend this amendment to the Government.  

A quicker process to obtain vacant possession: The Government has boasted that by section 88 (4) it has given landlords what they most want: an improvement to the speed with which a landlord can recover possession for rent arrears. A landlord may, under this section, apply to the tribunal for a termination order before the termination date specified in a non-payment termination notice—the 14 days' minimum notice period. This will certainly save time in getting the dispute into the tribunal. However, there is still no deadline for the issuing of an order for possession. Landlords require certainty here. This is their point of great financial exposure—the kind of vulnerability which makes landlords walk away from residential property investment.  

One of the common complaints I hear about the Consumer, Trader and Tenancy Tribunal is that there can be repeated adjournments and delays, partly due to the many provisions in legislation which say the tribunal may consider something or other. Sometimes "may" is not a solution to anything. The Government will do much to encourage investment in residential rental property by signalling an end to ongoing delays in obtaining possession from a tenant who has ceased to pay rent. This is rightly to be determined in the tribunal as there can be good reasons for a tenant withholding payment, or at least complicated reasons between the parties. But when it is just a tenant riding out the bond in lieu of rent, or otherwise being unfair, a deadline should be provided in the Act. I urge the Government to do more with this section.

I turn now to the big three problems with the draft bill. First is the effect of failure to pay rent. There was a terrible outcry, as I am sure the Government knows, when the draft bill created a new provision which allowed a tenant in possession to cure all rent breaches by paying outstanding rent—or by complying with a repayment plan agreed with the landlord—even after a warrant for possession had been issued. A warrant was no longer the end. There was to be no penalty imposed for putting everyone to this trouble, and the landlord could not recover the fees and expenses paid to get to the point of executing the warrant. Amazingly, there was no legislative limit to the number of times this could take place. In other words, the Government had removed the obligation on a tenant to pay rent on time, in accordance with the rental agreement. There were to be no consequences. 

It is no surprise that the Government has been prodded into action on this. We now have a compromise position. The new right in section 89 remains, for the benefit of the tenant. This, in itself, has merit. After all, we are talking about a person losing the roof over their heads. We should offer support to those who make mistakes or get into financial predicaments that can put them behind in their rent. Landlords will face additional costs if they have to find and enter a lease with new tenants. Parliament should try to help a landlord and a tenant stay in a cooperative relationship despite these bumps. The Government has added section 89 (5), which states: 

The Tribunal may, on application by a landlord, make a termination order despite subsection (2) or (3) if it is satisfied that the tenant has frequently failed to pay rent owing for the residential premises on or before the day set out in the residential tenancy agreement. 

The key words here are "frequently failed to pay rent owing". This is at least some indication to tribunal members that this lenient policy cannot be used over and over. It does, however, stop short of the hard part—actually setting a limit by time or number. vascript"> We will see how this goes. If I hear that the tribunal is not dealing with serial late payers, it is something we will have to take on for future amendment. As the Government might be aware, termination for unpaid rent is the largest category of landlord applications to the Consumer, Trader and Tenancy Tribunal, with over 15,000 applications made last financial year. That is more than half of the total landlord applications. You cannot say you have updated the 1987 legislation and yet left this issue only partly addressed.  

I refer to the unilateral end of the notion of a fixed-term agreement. Fortunately, this shocking part of the draft bill has also gone. For a while it appeared that the Government was going to compound all other concerns held by landlord investors that the fixed-term agreement had had its day and could now be ignored by the tenant, if not the landlord, and terminated at will. Draft subsection 98 (1) has been removed, which gave the idea that a 14- day notice given at any time by the tenant during the term of the tenancy could end the agreement. New section 96 (1) says such termination by the tenant can take effect only on or after the end of the fixed term. This provision no longer explicitly or implicitly gives the impression that early termination for no fault of the landlord is anything but a breach of the agreement. The draft bill also created the idea of a break fee to quantify compensation to the landlord for early termination or now, by section 107, abandonment, limited to four weeks rent, or six weeks if less than half of the fixed term had expired when the premises were abandoned. 

Proposed section 107 sets out a procedure that reinstates the traditional position that a defaulting tenant is liable for compensation to the landlord for "any loss (including loss of rent)" to the end of the fixed term, as agreed, with a positive obligation on the landlord to take steps to mitigate the loss. A break fee is invoked under proposed section 107 (3) only "if the agreement provides for such a limitation". Again, with respect to one of the big four issues of concern with the draft bill, the backdown has been comprehensive, thanks to a significant lobbying effort—and, of course, our scare campaign. 

Proposed sections 74 and 75 deliver a process much amended from the draft bill. One of the basic concerns has been addressed—that is, that the draft bill gave discretion to a tribunal member to override the express wishes of the landlord, as written into the lease agreement and accepted by the tenant, that there be a maximum number of occupants of the premises. Under the bill it will not be unreasonable to withhold consent to a sub-letting, which would increase the number of occupants or otherwise result in overcrowding of the premises. This is good news at last. Some clarification has also been provided. The new provision in proposed section 75 (3) (b) notes that it will be reasonable for a landlord to reject a sub-tenant who is listed on a tenancy database. 

However, the bill also removes a catch-all from the draft that, whatever else happened, the tribunal could not compel a landlord to take as a tenant a person whom the landlord "would not have accepted for a new residential tenancy agreement". There is now no catch-all to protect the landlord's right to decide whom he must contract with. Of course, this provision was also highly uncertain in its interpretation and is probably best gone anyway. However, more could be done to prevent needless trips to the tribunal over sub-letting and to provide much-needed reassurance to the now agitated investor population. There should be other reasonable grounds listed for rejecting a proposed sub-tenant. What about a proposed sub-tenant who comes with no references or no income? Is it reasonable to reject a proposed sub-tenant who has a history of violence? How does this sit with proposed section 50, which tries to make a landlord responsible for how one tenant interferes with the "reasonable peace, comfort or privacy" of another of his or her tenants? I ask the Government to put more thought into its growing list of exclusions to the sub-letting powers of the tribunal and amend proposed section 75 (3) accordingly.

Those are the big three issues—and they remain only partly under control. In addition, there are a few innovations that are insufficiently ready, in their current form, to become law, such as the right to quiet enjoyment by neighbouring tenants of the same landlord. Proposed section 50 of the bill makes a landlord responsible for stopping that landlord's other tenants interfering with the "reasonable peace, comfort or privacy" of a tenant. Since the draft, it has been unclear how far this new obligation might extend. The bill amends the draft by clarifying that it affects only neighbouring tenants of the landlord. It is also good that the 20-unit penalty has been removed. Still, this new principle, while worthy at first glance, requires a landlord to intervene—even to interfere—in relations between tenants.  

Whose word is the landlord to take and act upon? Is it the word of the tenant who complains first? How does the landlord find out what has been going on, usually at a property some distance from his or her own home? Must a landlord take statements from the witnesses and line them up for interrogation? Is this what the Government wants when it places an active new obligation on landlords? At the very least, an investigation involves a breach of the privacy of the tenants. Who is to say that the one who complains first, or loudest, is providing accurate testimony? One can see how a landlord, acting upon a complaint made by one tenant against another, terminates one lease in order to fulfil their obligations under proposed section 50, only to find that the Consumer, Trader and Tenancy Tribunal takes a contrary view and penalises the landlord for improper termination, or overturns the eviction. 

Proposed section 50 presumes that the complaint of one tenant against another is true. This section places a landlord with adjoining tenanted premises in an impossible position. Again, this proposed section could do with further work to limit the difficulties inherent in making the principle workable. However, proposed section 50 is only part of a new approach to the relationship between landlord and tenant, whereby landlords are being asked—and sometimes compelled, as I have noted—to know more and more about their tenants and what is going on in their personal lives. Proposed section 79 introduces new measures for situations where one tenant has taken out an apprehended violence order against a co-tenant or other tenant. Proposed section 71 allows for the making of a final apprehended violence order ending the co-tenancy, and the remaining tenant can change the locks. 

While these provisions acknowledge the realities of modern life, the cumulative effect of such provisions is to turn the landlord property owner into a participant in the dramas of his or her tenants. What must a landlord know about domestic violence, the personal relationships and apprehended violence orders affecting the tenants? One tenant can force out another, while the landlord can only watch on or be informed, maybe after the event. When will the landlord be told and what should the landlord be told? The bill has certainly improved dramatically on the draft sections dealing with abandoned goods. Under division 2 of part 6, abandoned goods are separated into categories that attract different procedures for lawful disposal or handling. These include rubbish, perishable goods, non-perishable goods and personal documents. Curiously, the explicit option from the draft of donating the goods to charity has been removed. The landlord can be compensated for expenses involved in moving and storing the goods, but what use is this if the tenant has left owing rent? It is another meaningless gesture to landlords who are left out of pocket. 

Although there are notice procedures and other protocols before goods can be disposed of, the reality can be a harsh lesson to landlords. A recent example, brought to my attention, involved goods left behind by a tenant who disappeared after a Consumer, Trader and Tenancy Tribunal application went against him. He owed six months rent. He left a bed, mattress, cupboard, table, lounge, two old refrigerators and much more in the one-bedroom flat. As a guide, the bill for removing the goods into storage so that the filthy premises could be cleaned for re- letting—at a cost of $350—was $80. It will cost another $100 to take it all to the tip after a waiting period. Unfortunately, the tenant's family will not pass on messages or provide contact details for the owner of the goods. The bill for repairing assorted damage was $250 and the walls, despite professional cleaning, were so stained that the flat required painting, at a cost of $1,364. The carpet had to be thrown out too.  

The landlord's agent made an application to the Consumer, Trader and Tenancy Tribunal to get an order so that the goods could be taken to the tip at the landlord's cost, as there was no chance of compensation from the tenant. An order would protect the landlord from any charge of theft or conversion. At the tribunal the member was sympathetic but said that he would not make the order. No reason was given for this. However, he added, off the record, that the landlord should simply take the items to the tip. This case, though an extreme example, reveals why landlords have a right to be concerned about the processes in the bill for handling abandoned goods. It is a sensitive issue—quite rightly on all sides—but the bill's provisions still operate as a disincentive to landlords and possibly encourage poor behaviour by landlords against the interests of tenants. Again the bill, despite some real improvements here, comes up short of expectations. 

Under proposed section 159 the bond is limited to four weeks rent. This rolls over the top of the existing position of four weeks for unfurnished premises and six weeks for furnished premises. Have furnished premises suddenly become a non-issue for the Government? Also, the parties cannot top up the bond as the years roll by, to reflect a proper security deposit—I refer to proposed section 161. Again, this is a disincentive for landlords to improve premises over the time of an ongoing rental agreement. There should be greater flexibility in these processes to reflect the real security issues and to encourage the development of longer-term tenancies.

The holding fee provisions of the draft bill have also been amended. Under proposed section 24 (1) (b) for the protection of tenants at last there is a limit on the holding fee that it must not exceed one week's rent. This is welcome. However, the bill still fails the tests of the real world. If people are out on the streets inspecting properties and trying to secure a lease, the current arrangement is that prospective tenants can pay a reservation fee to the estate agent to take the property off the market so that they can talk it over with their family or partners or make inquiries before committing. Proposed section 24 (1) (a) of the bill says the agent or landlord "must not require or receive from a tenant a holding fee unless the tenant's application for tenancy has been approved by the landlord".  

 Just how do people get their tenancy applications approved by the landlord on the spot on a Saturday? If people want the property