Money Property Why are renters treated like second-class citizens?

Why are renters treated like second-class citizens?

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While more young people and families are renting, making their house a home is not always easy.

The one in four Australian households now renting must ask their landlord’s permission to spruce up the property in any way if it will impact on existing structures such as walls or floors.

While this can work well for both parties, in some cases tenants who decorate or update, improving the property’s amenity, are rewarded with a rent increase.

As house prices continue to soar, renting and its associated issues are on the rise.

An October 2013 Grattan Institute report found the proportion of renting households rose from 18.4 per cent in 1994-95 to 25.1 per cent in 2011-12.

Home ownership also fell from about 72 per cent in 1961 to 68 per cent now. The biggest drop was in the 25-44 age group, down from almost 80 per cent to about 75 per cent.

Tenants are also renting for longer. The report found 57 per cent of renting households in 2007-08 had been doing so for more than five years and a third for more than ten years.

State and territory laws vary slightly, but Australian tenants generally must ask their landlord if they want to make any changes that will mark a surface or install a fixture inside or outside the building.

Strictly speaking, this includes things as simple as hanging pictures if it puts a hole in the wall. Pets are usually prohibited unless you have a landlord who will make an exception.

Tenants’ Union of Queensland co-ordinator Penny Carr said tenants also needed permission to add things like wall mounted air conditioners.

Ms Carr said they could install curtains without permission if existing fixtures did not need modification, but had to ask if it involved new attachments.

She recommends written agreements covering all aspects, including what would happen to installed items when the tenant left.

“You really should ask about everything and put it in writing,” she said.

In some cases, the landlord may agree to the tenant not paying rent for a few weeks in exchange for home improvements, or pay for the materials. In others, tenants are not so lucky.

“The flip side we’ve heard from tenants who have put a lot of time and energy into the property is they get a rent increase because they’ve actually increased the amenity,” Ms Carr said.

Ms Carr said rental periods had increased slightly but in Queensland the most common term of a lease was just six months, compared with 12 months in southern states.

She said tenants would invest more in their properties if they knew they would be there longer or if there had to be a reason expressed in law for their eviction, rather than landlords being able to evict without any grounds.

“People don’t necessarily want to invest the time and energy if they’re not sure what’s going to happen,” she said.

In Victoria, Section 64 of the Residential Tenancies Act (RTA) prohibits tenants from installing any fixtures or making alterations without the landlord’s consent.

Tenants Union of Victoria (TUV) policy and liaison worker James Bennett agreed tenants should get such consent in writing.

The RTA does not mention pets so Mr Bennett said if a Victorian tenant had a pet or intended to get one they should make sure the landlord agrees in writing before the lease started.

“Once the landlord agrees to you having a pet, they cannot simply change their mind,” he said.

Mr Bennett does hear about disputes regarding fixtures and alterations, but they are not the major source of inquiries. In 2012-13 the union helped more than 16,000 clients. The top three issues were repairs, lease breaking and bonds, which accounted for more than 5000 cases.

“Many tenants do feel powerless and unfortunately the market conditions, particularly for low–income tenants, generally dissuade them from exercising the limited rights that they have,” he said.

The Grattan Institute’s Renovating Housing Policy found renters did not enjoy the same capacity to “make a home” as owners and typically could only make minor alterations at the discretion of the landlord.

“There are few rewards for tenants who improve their housing or devote time and money to keeping it in good condition,” the report said. “Renters often say they would like to be able to personalise their housing to make it a longer term ‘home’, and to have more flexibility to have pets.

“Many renters express a desire to keep pets for companionship. But many landlords and property managers have blanket rules against pet ownership, even in circumstances where it presents little or no risk.

“Other countries do not so severely restrict tenants’ capacity to make a home. For instance, in Germany renters can ordinarily keep small animals and make small holes in the wall to hang pictures.”

In Queensland renters must:

• Pay the rent according to your agreement.

• Keep the premises clean, having regard to their condition at the start of the tenancy.

• Repair any damage you or your visitors cause.

• If you live in a moveable dwelling park, keep your premises in a manner that does not detract from the standards of the park.

• Not cause a nuisance to neighbours or disturb other tenants or residents.

• Be responsible for the behaviour of your visitors.

• Get written permission if you wish to install fixtures or make changes to the premises.

• Get written permission if you wish to sub-let to another tenant.

Source: Tenants’ Union of Queensland

Victorian tenants must:

• Not cause damage

• Notify your landlord of any damage as soon as possible

• Ensure you and your visitors respect your neighbours’ rights to privacy, peace and comfort

• Ensure the property is not used for any illegal purpose

• Obtain consent from the landlord before installing any fixtures, or making any alterations/renovations.

Source: Renting a home; A guide for tenants. Consumer Affairs Victoria

NSW tenant responsibilities

Alterations to premises

The residential tenancy agreement sets out the tenant’s rights and responsibilities in relation to adding fixtures, or making any renova­tion, alteration or addition to the residential premises.

A fixture is something like a built-in bookcase or air-conditioning unit, which is attached to the land or building and does not function independently.

If a tenant wants to add a fixture or make changes to the residential premises

A tenant requires either the prior written consent of the landlord, or ensure that this is covered by an additional term in the residen­tial tenancy agreement. A landlord must not unreasonably withhold consent to a fixture, or to an alteration, addition or renovation that is of a minor nature. The tenant bears the cost of such improvements, unless the landlord agrees to cover the cost themselves.

If a tenant wants to remove a fixture

A tenant may, at their own cost and before they give vacant possession, remove any fixture that was installed in accordance with the Act or the residential tenancy agreement.

A tenant must notify the landlord of any damage caused by removing a fixture and must repair the damage, or compensate the landlord for the landlord’s reasonable expenses of repair­ing the damage.

A tenant may not remove a fixture without the consent of the landlord if the fixture was installed at the landlord’s expense or the landlord provided the tenant with a benefit equivalent to the cost of the fixture.

If there is a dispute over fixture and changes

If the landlord refuses to let a tenant install a fixture or make a renovation, alteration or addition, or remove a fixture installed by the tenant as provided for in the Act, then the tenant can apply to the Consumer, Trader and Tenancy Tribunal for the appropriate order.

A landlord can also apply to the Tribunal for an order prohibiting the tenant from removing a fixture, or compensation for the cost of rectify­ing work done, regardless of whether the landlord consented to the carrying out of that work.

Source: The Law Handbook; Your Practical guide to the law in New South Wales 12th edtion. Redfern Legal Centre publishing

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