Residential Tenancies (Further Amendment) Bill

Residential Tenancies (Further Amendment) Bill

Introduction Print

EXPLANATORY MEMORANDUM

551292

BILL LA INTRODUCTION 19/7/2005

General

The purposes of the Residential Tenancies (Further Amendment) Act 2005 are to introduce protections for residents sharing rooms in rooming houses, and to apply the caravan park provisions of the Act to residents after sixty, rather than ninety, days.

Caravan Parks provisions—Overview

The definition of a resident applying to caravan parks is amended to refer toaperson who has occupied a site in the park for 60 consecutive days. Thisfigure has been reduced from 90 days. The requirement of a caravan park owner to give notice of rights to a resident has also been amended to reflect this change.

Rooming House Provisions—Overview

The application of the provisions of the Residential Tenancies Act 1997 (RTA) to residents of shared rooms in rooming houses has been in some doubt. The Victorian Court of Appeal in the case of Kirkland Fisher v Aboriginal Hostels [1998] VSCA 130, although based on the provisions of the now-repealed Rooming Houses Act 1990, has been regarded as authority for the proposition that the RTA does not apply to residents of rooming houses unless they enjoy exclusive possession of a room.

It is Government policy that residents of shared rooms in rooming houses should be given similar protection to those residents of rooming houses enjoying exclusive occupation of a room.

To achieve this policy, it has been necessary to formally create both an "exclusive occupancy right" and a "shared room right" applying within rooming houses only. The terms are mutually exclusive.

The Act provides that a residency right in a rooming house is an exclusive occupancy right unless—

The room is occupied on a share basis at the time the relevant provisions of the Act commence;

A vacant room is offered to residents on a share basis after the commencement of the relevant provisions; or

A resident who has an exclusive occupancy right, consents to share the room with one or more others.

An exclusive occupancy right is not necessarily a sole occupancy right—for example; a couple may occupy a room under an exclusive occupancy right. Whether a room is occupied under an exclusive occupancy right or a shared room right is a question of fact and law.

Whenever a resident is offered accommodation on a share basis, the rooming house owner, not the resident, has the right to determine who will be the coresidents of the room.

A rooming house owner must give all residents written notice of their occupancy rights—whether exclusive occupation or shared room rights—atthe commencement of the relevant provisions of the Act or at the commencement of their occupation, whichever occurs first.

If the residency right is a shared room right, the notice also needs to state theroom capacity (ie the number of people whomay occupy the room). Thenotice must also inform the resident that the choice of co-resident in a shared room rests with the rooming house owner, and must specify the (lower) rent to apply, compared to the rent that would have applied under an exclusive occupancy. A proposed increase in room capacity that exceeds the lawful capacity (currently specified by the Health (Prescribed Accommodation) Regulations 2001) will be of no effect.

If a rooming house owner seeks to change the occupancy rights of a room from exclusive occupancy to shared room, or to increase the intended room capacity, he or she must seek and obtain the written consent of the existing occupants, and offer a lower rent, to take effect from the date the change of status takes effect. The resident or residents must also be informed that the choice of co-residents will be the rooming house owner's. The written consent of every affected resident must be obtained before the change becomes effective, and the notice seeking the consent expires after 14 days.

There is a three-day cooling-off period in which a resident may withdraw consent. Where cooling off rights are not exercised, the notice becomes effective 7 days after the consent (or the last consent, if more than one) is obtained.

A resident of a room who has consented to sharing or who has consented to an increase in room capacity may seek a review of the rent, even though it may represent a reduction of the rent payable prior to consent.

The resident may apply to the Director of Consumer Affairs if he or she considers the rent reduction is insufficient and the rent is excessive. TheDirector may report on the rent compared to rents in a comparable rooming house with shared rooms in a similar location. The resident may then seek an order of the Tribunal that the rent is excessive. The Tribunal may determine whether the rent reduction is sufficient, and if it is not, determine the appropriate rent.

If a rooming house owner allows an additional resident to occupy the room unlawfully, the existing residents of the room are not required to pay any rent until the capacity is reduced to its previous capacity or the proper consents are obtained. The resident may also apply to the Tribunal for appropriate orders.

The provisions of the RTA permitting a rooming house owner to apply separate service charges for electricity and gas do not apply to shared rooms.

The provisions relating to quiet enjoyment of the premises continue to apply in a shared room situation. In addition to the obligations the rooming house owner has to residents of different rooms, the rooming house owner must take all reasonable steps to ensure that a resident of a shared room, or his or her visitors, do not interfere with the privacy, peace and quiet of other residents in a room. The Act makes it clear that merely permitting more than one resident to occupy a room does not breach this obligation. A resident has a corresponding duty not to interfere with the rights of another resident of the room.

A resident of a shared room must not use the room, or permit his or her visitors to use the room, for an illegal purpose.

The Act provides a short transitional period to enable all parties to prepare for the introduction of the new provision. During this period, room capacities are frozen and may not be changed. The rights of existing residents in sharedrooms are determined by the facts existing at the time of the "freeze". That is, if the room is shared, each resident has a shared room right, but the number sharing cannot be increased until the new provisions apply. A person or couple currently occupying the room with exclusive possession continues to enjoy that right during the freeze. A rooming house owner may not seek to change the nature of the occupancy right, or the room capacity, during the interim period.

Clause Notes

Clause 1sets out the main purpose of the Act, namely to clarify the residency rights of occupiers of shared rooms in rooming houses.

Clause 2provides that the Act (except clauses 7, 9,10, 11, 12 and 13) comes into effect on the date of Royal Assent, and clauses 7, 9, 10, 11, 12 and 13 come into effect on the earlier of the date of proclamation or 1 December 2005.

Clause 3provides that the Principal Act is the Residential Tenancies Act 1997.

Clause 4amends section 3 of the Principal Act to insert new definitions of "exclusive occupancy right", "room capacity", "shared room", "shared room right", and amends the definition of "resident" as it applies to caravan parks and makes a minor amendment to the definition of "rent".

Clause 5inserts new sub-clauses (2) and (3)into section 92 of the Principal Act, and provides that a residency right may be either an exclusive occupancy right or a shared room right.

Further, it provides that an occupancy right will be an exclusive occupancy right unless the rooming house owner has given the resident, before occupation, a notice specifying that the right being given is a shared room right; or that the resident after being given proper notice has consented to an increase in room capacity; or the room right is deemed to be a shared room right under the transitional provisions.

Clause 6inserts new sections 92A and 92B into the Principal Act.

Section 92A confirms that an exclusive occupancy right entitles a resident to occupy a room to the exclusion of others, and clarifies that a resident may enjoy an exclusive possession right jointly with others. The example given is of members of a domestic partnership occupying a room with an exclusive occupancy right.

Section 92B provides for a shared room right, under which a resident of a room occupies the room with one or more other residents selected by the rooming house owner.

Clause 7inserts a new section 92C into the Principal Act.

Section 92C requires the rooming house owner to give each resident a notice setting out his or her rights before the occupancy commences. The notice must be in accordance with the section, and must state the nature of the occupancy right (exclusive or shared room). If the occupancy right is a shared room right, the notice must provide additional information about the room capacity, the rooming house owner's right to choose co-residents within the room capacity, and specifying the rent payable for a shared room right as opposed to the rent applicable to an exclusive occupancy right.

Clause 8amends section 94 of the Principal Act to provide that a rooming house owner may not enter a tenancy agreement with a resident unless the resident has or is to have an exclusive occupancy right.

Note—the effect of entering a tenancy agreement would be to render the rooming house provisions of the Act inapplicable to the residency.

Clause 9inserts a new Division 1A of Part 3 of the Principal Act. Division 1A comprises sections 94B–94D inclusive.

Section 94B provides that a rooming house owner must not increase the room capacity of a room without the consent of all its current occupants. If a resident who previously enjoyed an exclusive occupancy right consents to an increase in room capacity, his or her occupancy right becomes a shared room right.

Section 94C specifies the contents of a notice seeking to increase the room capacity of a room. A notice expires after 14 days if the change in room capacity has not been consented to by all persons having occupancy rights of the room.

Section 94D specifies the form in which a resident's consent must be given—namely written, signed and dated consent. It also provides a cooling off period of three days in which the consent can be withdrawn. The section provides that the consent takes effect after 7 days, or if more than one consent is required, 7 days after the last consent is given. A consent is of no effect if the notice is not valid.

Clause 10inserts new sub-clauses(1A)and (2A) into section 102 of the Principal Act.

These sub-clauses deal with the resident's right to refer the matter to the Director of Consumer Affairs for investigation where there has been a reduction of rent following a change in room capacity, but the resident believes the rent reduction is insufficient, and the rent is excessive. The application must be made 30 days after the notice of the change in room capacity was given to the resident.

Clause 11amends section 104 of the Principal Act. New paragraphs (ba) and (bb) are inserted after section 104(3)(b); an new paragraph(f) is substituted for section 104(3)(f); and a new subsection (6) is inserted after section 104(5).

These provisions enable the Tribunal to consider comparable rents in other similar shared room situations, and to impose a reduced rent where applicable.

Clause 12amends section 105 of the Principal Act to provide that, pendinga decision, the resident must pay the rent specified in the section 94B notice. The Tribunal has power to order a refund of rent where the rent has been found to be excessive.

Clause 13inserts a new section 106A into the Principal Act.

Section 106A provides that a rooming house owner must reduce the rent if the room capacity is increased. The reduction takes effect when the resident's consent takes effect.

Clause 14amends section 108 of the Principal Act to clarify that the provisions of section 108 enabling a rooming house owner to charge for electricity and gas where these services are separately metered to each room, do not apply to shared rooms.

Clause 15amends section 111of the Principal Act to provide that a resident of a shared room must not use the room or permit his or her visitors to use the room for an illegal purpose.

Clause 16amends section 112 of the Principal Act. The existing general obligation on a resident to pay rent is qualified by the insertion of section 112(2) which provides that where the rooming house owner permits an additional person to occupy a room in contravention of either section 94B or section 529, an existing resident is not liable to pay rent for his or her occupation of the room during the period commencing on the date that the additional person commenced occupation of the room and ending on the earlier of either the date that the room capacity is reduced to the room capacity existing immediately before the additional person commenced occupation, or the date thatthe consent of the existing resident to the increase in room capacity takes effect under section 94D.

Clause 17amends section 113 of the Principal Act to clarify that, by simply sharing a room, a resident does not breach his or her duty to preserve the quiet enjoyment of the premises.

Clause 18inserts new sub-clauses (2) and (3) at the end of section 122 of the Principal Act to impose an obligation on a rooming house owner to take all reasonable steps to ensure that a resident of a shared room does not do, or permit to be done, anything which interferes with the privacy, peace and quiet of, or the proper use and enjoyment of the room by, other residents of the room; and to clarify that, by simply permitting the sharing of a room, a rooming house owner does not breach a duty to preserve the quiet enjoyment of the premises.

Clause 19amends section 133 of the Principal Act to require the Tribunal to include in an order relating to repairs, an obligation for the rooming house owner to give a copy to each resident of a shared room. The provision applies where one resident of the rooming house has made application to the Tribunal.

Clause 20amends section 136 of the Principal Act to ensure that a rooming house owner can gain access to a shared room in the circumstances permitted by that section.

Clause 21amends section 137 of the Principal Act to clarify the grounds for entry into a shared room by a rooming house owner, where a resident of the room has failed to comply with duties under the Principal Act.

Clause 22amends section 145 to require caravan park owners to notify caravan park residents of the residency rights that are conferred on them after 60 days of continuous occupation in the caravan park as their main residence.

Clause 23inserts a new section 210A into the Principal Act to enable the resident of a shared room to apply for an order under section 212(2A) of the Principal Act where the rooming house owner fails to comply with sections 94B, 529 or 531. The orders under section 212(2A) relate to remedies for breach of duty and compensation.

Clause 24amends section 211 of the Principal Act to enable the Tribunal to consider an application arising under section 210A.

Clause 25amends section 212 of the Principal Act by inserting a new sub-clause (2A). This enables the Tribunal to make compliance and compensation orders to residents of shared rooms.

Clause 26amends section 271 of the Principal Act to deal with abandonment of the premises by a resident of a shared room.

Clause 27amends section 284 of the Principal Act to permit a rooming house owner to give a resident of a shared room notice to vacate based on use of the room for an illegal purpose.

Clause 28amends section 355 of the Principal Act to ensure that a warrant of possession can be directed to a particular person in a shared room.

Clause 29amends section 377 of the Principal Act to enable a rooming house owner to accommodate a new resident in a shared room in managed premises in circumstances where the residency rights of a resident are suspended pending a decision of the tribunal, provided that accommodating the new resident would not breach to room capacity requirements (including the suspended tenancy right).

Clause 30inserts a new heading to Part 15—Transitional provisions.

Clause 31substitutes new sections 528 to 531 in Part 15. The sections that are replaced are spent.

Section 528 defines 2005 Act.

Section 529 freezes the capacity of shared rooms at their present level of occupation, pending proclamation of sections 7, 9, 10,11,12 and 13.

Section 530 provides that residents of rooms shared at the commencement of the Act are deemed to have shared room rights unless they have exclusive occupancy rights. A resident of aroom who is the sole occupant of the room atcommencement of the Act is deemed to have an exclusive occupancy right.

Section 531 provides that a rooming house ownermust give to all residents deemed to occupy a shared room notice setting out the room status and their rights. This notice must be given within 14 days of the commencement of section 9. However, if the rooming house owner is seeking to increase the room capacity on the commencement of section 9, he or she can serve notice under section 94B instead. The main difference between the two notices is that the 94B notice seeks consent to an increase in room capacity, while notice under this section informs the resident of the maximum capacity at commencement.