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Residential Tenancies Act Review

Response to the Issues PaperAlternative Forms of Tenure

19 September 2016

RAAV’s response to Alternative Forms of Tenure Issues Paper

1. Preface

What responsibility do Registered Rooming Houses have to provide affordable accommodation to vulnerable and disadvantaged persons?

The Government says that the “the private rental market needs to be able to provide housing to low-income households”. We know of no social obligation on the part of landlords to be active in social housing.

How can government expect to regulate to require this? The lack of social housing for low-income families is a direct response to the failure of government, both Commonwealth and State to meet the demands for this and to meet rising population growth. Rent has increased faster than affordability – the Federal rental assistance level needs to rise commensurate to rental increases rather than the average wage, which is more likely to assist the vulnerable and disadvantaged.

As a result more people are suffering rental stress. This is not an industry problem but an issue for the Federal government. The private market would only find this sector more attractive for investment if the Commonwealth’s rental assistance levels were increased and over regulation of rooming houses reduced.

What is the role of Registered Rooming Houses

RAAV’s members are major providers of accommodation in both regional and metropolitan locations. In many metropolitan locations the supply of affordable rental accommodation is very limited, and rooming house owners are frequently approached by both government agencies and private agencies seeking accommodation for clients - who for a variety of reasons that can include ongoing homelessness, continuing unemployment, release from jail, domestic disputes, and general isolation from the general community, have been unable to find affordable accommodation.

This tenancy mix can produce a level of volatility in the rooming house residency group that requires skilful management in order to provide a safe and welcoming community for all residents. Registered Rooming Houses provide an important option in the market for affordable, flexible housing.

The numerous documents and Issues Papers published to date provide little direct evidence that Registered Rooming Houses fail in their responsibility to provide safe, affordable and secure housing for tenants who have chosen to live there. Registered Rooming Houses provide an important option in the market for affordable, flexible housing and provide a much-needed back-up for the government social housing programs. Registered Rooming Houses often support some of the neediest people in our society, e.g. women and families seeking refuge from domestic violence, tenants that have been unable to find local rented accommodation.

There is little statistical evidence to indicate that Registered Rooming House owners as landlords fail to provide safe, secure and affordable housing for their tenants. It is important to remember that Registered Rooming House owners, who have invested significantly in building and maintaining a


rooming house and in the costly compliance requirements to manage their businesses, have choices as to the best return on this investment.

Should the legislative environment for Registered Rooming Houses become overly restrictive as a result of recommendations arising from this Review, there is a very real threat that owners might reduce their involvement in the supply of rooms for residents in favour of other investments.

Registered Rooming House operators are typically professional business owners seeking long term, sustainable profitability and are less focussed on short term, speculative capital growth. The industry has concern that ongoing changes to the legislation governing the Registered Rooming House industry over the past 10 years have created an increasing administrative burden and as well as uncertainty for operators and residents alike. The risk of introduction of increasingly restrictive legislation could potentially reduce supply of affordable housing in Registered Rooming Houses and further disadvantage already vulnerable residents.

RAAV submits that the need for legislative change in this context is not supported by specific examples or quantitative evidence of complaints, applications to or decisions by VCAT.

The Government should consider the benefits to the Registered Rooming House industry and its customers that would arise from the removal of the current regulatory burden and high associated costs imposed by compliance requirements introduced in numerous pieces of legislation that have been implemented over the last ten years. This burden includes disability access requirements, Licensing requirements to name a few.

Registered Rooming Houses provide a safe environment for vulnerable and disadvantaged persons. Since the tragic deaths in the unregistered rooming houses in Brunswick and Footscray and the good efforts of the Rooming House (Standards) Task Force, RAAV is proud to announce that we are unaware of any deaths caused by similar circumstances in Registered Rooming Houses in recent past history.

RAAV believes that providing support and assistance to the Registered Rooming House sector, combined with vigorous pursuit and prosecution of unregistered, overcrowded, non-compliant accommodation in whatever guise, will do more to provide “fairer, safer housing” for all Victorians.

Rooming house requirements

There is a broad spectrum of tenants and residents in Victoria’s rental market. Some are viewed by landlords as higher risk, or potentially more costly to accommodate than others. This assessment is typically based on the landlord’s perception of the tenant’s ability to afford the rent on the property, the time and administrative cost of dealing with any behavioural problems that may arise and the probability and cost of any damage to the property.

Frequently, residents of Registered Rooming Houses are at the higher-risk end of this spectrum. Screening potential residents is a difficult assessment for rooming house owners as the information available to owners in making this judgement is imperfect. However the process is essential because these costs erode the profitability of the transaction and in the case of damage, also reduce the capital value of the property.


Registered Rooming House owners will attempt to minimise the costs of the residency risks outlined above by reducing their exposure to the risks, i.e. by accepting only those residents who pose the lowest risk of loss and by refusing to accommodate residents who are more likely to require eviction at a later time. This will inevitably provide more barriers to entry into the rental market for new renters and make renting more difficult for high risk residents to find housing.

Persons seeking a tenancy in a Registered Rooming House are generally assessed by the manager or owner according to their potential to fit into the community of residents already in the rooming house. Since the rooms can be compact with shared common areas, it is important that prospective new residents can demonstrate a willingness to live in harmony within the existing community.

Prospective residents also must be able to live independently within the rooming house and to manage daily tasks of independent living such as shopping, cooking, and maintaining a basic level of personal hygiene. Rooming house owners report that this last requirement is very important in ensuring that the rooming house remains clean and safe for other residents.

Again we make the point that some residents who present at the initial screening interview as being suitable for selection into the community can for a variety of reasons fail to settle in. The owner has a duty to the community of residents to be able to call up the notice to leave provisions where this is necessary to preserve the peace and harmony of the rooming house, and the safety of all who call it home.

Registered Rooming Houses offer a safety net to some of the community’s most needy and vulnerable people. They may not always be physically or mentally able to operate as independent occupants of the house. They will not always make a successful transition into a shared community life. They may not always understand the need to be considerate of the requirements of others. And rooming house operators cannot always effectively predict who will and who won’t make this transition effectively. Tighter screening processes may in fact screen out some very needy people who are capable of settling well into rooming house life.

There are two tenancy options available to rooming house operators – rooming house tenancy or standard residential tenancy. Unfortunately the different rules and requirements of the two agreements create confusion and complexity for tenants and operators, particularly where there are tenants in the same rooming house that are resident under different agreements.

Rooming houses, like caravan parks, have shared common areas and amenities that create particular needs and responsibilities that are unique to that environment and bear no relation to the nature of the tenancy agreement. Many rooming house tenants, once established, prefer to go onto a standard residential tenancy agreement to give them certainty and security of tenure in the medium term. Similarly, there are benefits to operators to have tenants on longer term leases to stabilise their income and for insurance purposes. However, there are also disincentives for owners in this as it can affect land tax exemptions and also limit their ability to take action based on issues that impact on others within the rooming house.

It may be beneficial to retain and clarify the renting options available under Part 2 and Part 3 with variable options regarding tenure, however with provision in the Act to take specific measures relevant to rooming houses. As an example, the ability to ensure that tenants that do not abide by


house rules relating to common areas or health and safety can be dealt with in a timely and responsive manner for the benefit of other residents. A new model highlighting the importance of retaining current leasing options is detailed later in this submission.

Contents

Page Preface 2

1. Executive Summary 6

2. An alternative rooming house model 2.1 Introduction2.2 Use of a lease2.3 The New Model:

2.3.1 Option 1 2.3.2 Option 2

2.4 Complications with other legislation2.5 Similarities to caravan parks

8

3. RAAV’s response to questions 38 to 54

RAAV has reviewed the Issues Paper and is providing responses to Questions 38 to 54 as the preceding questions do not relate to or do not have any significant impact on rooming houses.

15

NOTE: This submission by the Registered Accommodation Association of Victoria (RAAV) is in support of the registered rooming house industry particularly for class 1B and class 3 buildings. Comments are not intended to be applied to regular tenancies in class 1A and class 2 buildings.

For the sake of brevity, the term “tenant” may also mean “resident” in this submission - and vice a versa, viz.

Residents are classified as occupants of a rooming house who are not on a lease and may be on an agreement; and

Tenants are occupants in a rooming house who are on a lease.


1. Executive Summary

Preface

The Government says that the “the private rental market needs to be able to provide housing to low-income households”. We know of no social obligation on the part of landlords to be active in social housing.

There is little statistical evidence to indicate that Registered Rooming House owners as landlords fail to provide safe, secure and affordable housing for their tenants.

Should the legislative environment for Registered Rooming Houses become overly restrictive as a result of recommendations arising from this Review, there is a very real threat that owners might reduce their involvement in the supply of rooms for residents in favour of other investments.

There are two tenancy options available to rooming house operators – rooming house agreement or standard residential tenancy. Unfortunately the different rules and requirements of the two agreements create confusion.

Rooming houses have shared common areas and amenities that create particular needs and responsibilities that are unique to that environment and bear no relation to the nature of the tenancy agreement.

New model

RAAV’s understanding is that approximately 50% of rooming house landlords use standard Residential Tenancy Agreements but they have to rely on the less appropriate Part 2 provisions instead of the more fit for purpose Part 3 provisions.

A new and streamlined model can be developed which can be underpinned by a number of amendments to the Residential Tenancies Act (RTA).

The requirement to use a lease should not be prescriptive but a flexible option which is available to landlords and tenants.

It is important that the Review recognises that proposed changes to the RTA may produce complications with other Acts that Registered Rooming House operators need to observe.

RAAV is unaware of any rooming house operator (or any regular landlord) who is alleged to have opportunistically used leases to claim compensation for lease-breaks as a strategy to make higher profits.

Response to questions in the Issues Paper


There needs to be clearer definition included in the RTA of what is not a “Rooming House” and the definition of a Shared House needs to be clearly identified as do situations where large numbers of family/extended family members live in the one house.

There is an emerging presence of purpose built accommodation which is being designed and deemed “class 1b”or “class 3” under the Building Act. These new properties may require little or no sharing of facilities and generally provide a higher degree of safety and amenity.

It is important for the Government to be more active about closing down unregistered, non-compliant properties to deal with the danger to all tenants using this often substandard area of the accommodation market.

Mandating a uniform set of “house rules” is unworkable as they often need to be tailored to suit the specific property.


Operators need to retain the right to do unplanned inspections to investigate complaints by other residents in relation to drugs, theft, weapons, overcrowding, noise, pets, hygiene and odours, etc.

RAAV restates the position it has outlined in previous responses that rooming houses are not suitable accommodation to house pets and that it is not feasible to allow pets in a rooming house without the consent of the operator.

If the Act is changed and allows the removal of a tenant or guest of a tenant causing or threatening danger or injury to other tenants, the security of the other residents will be enhanced.

The duty to pay rent on time must remain as a duty. It is imperative that landlords and managers of Registered Rooming Houses retain the ability to

take action against residents and their visitors who flaunt the accepted behaviour in a rooming house.

o O o


2. New Rooming House Model

2.1 Introduction

RAAV’s past survey results indicate approximately 50% of rooming house landlords use standard Residential Tenancy Agreements. The drawback of this is that they have to rely on the less appropriate Part 2 provisions instead of the more fit for purpose Part 3 provisions.

There are good reasons for their decision to use leases and some of the typical reasons cited for using leases in a rooming house are listed below:

Stability of the tenure arrangement Financial security To seek and keep specialty insurance To seek and keep mortgage finance To prove Land Tax Exemption under pre-2013 guidelines To meet Housing Establishment Funding receipt guidelines To meet long term requirements of Housing Referring Agencies To meet tenant housing requirements. To take a larger bond to cover higher risks of damage. To use a standard managing agent.

Similarly the 50% of rooming house landlords that choose to not use leases also have good reasons for their decision and some of the typical reasons cited for not using leases in a rooming house are listed below:

To take quicker action in the case of rent arrears To be able to use a set of house rules To have greater rights in responding to pets introduced without consent Short term periodic tenure Excellent existing rapport between the tenants and operator Long term arrangements in place with the tenant

In other circumstance, a long term lease may not be appropriate, e.g. Registered Rooming House operators who cater for interstate clients on short term employment contracts, specific student accommodation which matches school or university terms.

Consequently, the requirement to use a lease should not be prescriptive but an option which is available to operators and tenants. It needs to be flexible in both the length of the arrangement and any specific circumstances of the tenancy to allow the operator and tenant to reach a satisfactory outcome.

2.2 Use of a lease

Section 27 of the Act prevents a party to a lease agreement from contracting out of any provision of the act, and this is sensible. It makes no sense then that when a resident and operator of a rooming house enter a lease agreement that this decision causes both parties to contract out of the entire Part 3 of the Act, which is specifically tailored to rooming houses.


With this in mind RAAV propose a new model underpinned by one fundamental proposition: that:

1. a resident should be able to enjoy the increased security of tenure of accepting a lease agreement; and

2. a landlord should retain the right to request a larger bond whilst all the rooming house provisions would still apply to other aspects of the arrangement for the proper management of the accommodation and the clientele. This is because regardless of the arrangement type, it is actually the close living arrangement of occupants which causes challenges for the landlord to address.

Of particular importance, this amendment could clarify the governance of common areas in rooming houses which appear to cause some confusion amongst advocacy groups, by clarifying that Part 3 would apply if the resident and landlord enter an agreement under Part 3.

Approval of this proposal would keep the review of the RTA in line with an aim of the Review being to support longer tenancies generally. In particular this proposed new model would support some of the most vulnerable and disadvantaged people who live in rooming houses, which is an important area for the Review to target.

2.3 The New Model:

2.3.1 Option 1 (a small, easy, predictable change for a big benefit)

A lease should provide the tenant with a fixed period during which tenure is protected from the use of a no reason notice to vacate and from any rent increases not listed in the lease agreement. If a lease is in place then the allowable bond would be the equivalent of 4 weeks rent.

A suggested method is to add the red sections to these two existing sections:

S94. Power to enter tenancy agreements or other agreements

(1) Nothing in this Act affects the right of a resident and a rooming house owner to enter into a tenancy agreement, and have the agreement governed exclusively under Part 2.

(1A) If a tenancy agreement is entered into by a resident and a rooming house owner in respect of a room in a rooming house, the rooming house provisions do not apply to the occupation of that room by that resident while the tenancy agreement continues.

(2) A rooming house owner and a resident may enter into a rooming house residency agreement (not being a tenancy agreement) specifying; the terms and conditions of the resident's use and enjoyment of the room and rooming house and any fixed term period of the agreement.

S 96. What is the maximum bond?

A rooming house owner must not demand or accept a bond that exceeds the equivalent of 14 days rent unless both parties have entered either a tenancy agreement or a rooming house residency agreement, in which case the maximum bond is 28 days rent.


2.3.2 Option 2 (all of option 1 and the following detailed amendments to certain provisions)

RAAV suggests that the following amendments be made to underpin the new model.

Relevant Provisions:

Locks:

The tenant may change the barrel of a lock device in a lock that complies with RTA’s minimum standards with consent from the owner or operator. If the tenant installs a lock which is not mandated under tenancy or building laws, the operator may notify the tenant that the lock does not meet the minimum standards and can remove the lock.

Define a duty for urgent repairs by tenant:

This would be applicable where an essential safety item has been tampered with, broken or removed. These items would be defined these items to include: Smoke detectors, fire blankets, fire hoses, fire extinguishers, safety information, mandated rooming house safety provisions.

Notice to vacate for urgent repairs:

After ignoring three notices of a breach which have been issued by the operator, allow a notice to vacate be served if any essential safety item requires repair.

Notice to vacate for damage:

Make this provision available, and only require damage be serious, intentional or reckless, but not require it be malicious as under Part 2.

Notice to vacate for hoarding:

Allow a vacate notice be issued where hoarding exists in the bedroom, the house or the property if it is supported by the MFB or CFA clutter rating scale if it is above “set point” .

Notice to vacate for negligent water or utilities usage:

Allow a notice to be served if after three warnings, the tenant tampers with cost saving and energy efficient devices.

Duty to pay rent (s112):

Make the method of rent payment a duty also under Part 2 for rooming houses so that the manager has the option of serving this alternative notice in the case of late payment by repeat offenders, despite the presence of a lease.

Notice for breach for interference with peace (s113):

Extend the provision which is available to also protect owners, neighbours and councils.


Notice for breach for room in poor condition (114):

Make this provision available if proof is available, e.g. photographs.

Notice to vacate for the presence of an animal (117):

Allow an operator to evict a tenant who after three breaches allows an animal to be on part of the property without consent of the operator.

Breach of duty for failure to observe house rules (s119):

Make this provision available under Part 2.

Breach for refusal to permit entry (s137, s140):

Make this provision available, particularly to allow more frequent inspections in the lead up, actual, and follow up inspections by Councils and CAV as inspections often occur on a monthly basis.

Notice to vacate for antisocial behaviour:

Create a definition for antisocial behaviour and include a list of specific behaviours and allow a notice to be served in this instance.

Notice to Leave amendments for threats, violence and co-tenant disputes:

Allow a rooming house operator the ability to use the “Notice to leave” in a greater range of circumstances and for greater protection of other residents, and without the burden of an automatic VCAT hearing.

Allow such things as a witness statement of the presence of a weapon to constitute having put others safety in danger, even in the absence of the willingness of a witness to attend a VCAT hearing.

2.4 Complications with other legislations that may be exacerbated by the RTA Review

It is important that the Review recognises that proposed changes to the Residential Tenancies Act may produce complications with other Acts that Registered Rooming House operators need to observe. Socially responsible rooming house owners and managers have to abide and comply with the following legislative requirements:-

The Residential Tenancies Act 1997 The Residential Tenancies Regulations 2008 The Public Health and Wellbeing Act 2008 The Public Health and Wellbeing Regulations 2009 Planning and Environment Act 1987 Victoria Planning Provisions 52.22 and 52.23 The Building Act 1993 The Buildings Regulations 2006, especially with hard wired smoke detectors Residential Tenancies Rooming House Standards Regulations 2012 also known as the

Minimum Standards The Rooming House Operators Bill (2015) – pending


As illustrated, the rooming house sector is heavily regulated and over governed by having to comply with ten separate legislative documents. Consequently, RAAV has seen a gradual reduction of some longer-term members who have decided to vacate the rooming house sector due to the rising cost of complying with the increasing restrictive legislation.

Potential changes to the Residential Tenancies Act may also impact on the financial viability of Registered Rooming House operations with the potential to cause the withdrawal of some operators if their businesses become financially marginal.

These considerations are: Land Tax exemption Licensing Insurance Mortgages Community expectations.

2.4 Similarities to caravan parks

Although the Government noted that there was scope to provide greater protection to residents of caravan parks and movable dwellings as part of its Plan for Fairer, Safer Housing – ref p9), this plan did not however identify the rooming house sector as needing similar protection for its residents.

As a separate point it is relevant to note that because residents of rooming houses, caravan parks and moveable dwellings live in close proximity to each other, many of the statements and recommendations by the Victorian Caravan Parks Association (VCPA) and footnoted in the issues paper are indicative of the similar challenges faced by rooming house operators. This section draws on those similarities, to add emphasis for the need for operators to have adequate control of their rooming houses – specifically for the protection of other residents and via the provisions under which an operator can respond to troublesome residents.

Unlike a landlord, who deals with a single tenant or co-tenants in a rental property, operators of parks and rooming houses must consider both the rights and needs of an individual resident as well as the wellbeing of the park or rooming house community as a whole.

RAAV landlords note that in the role of managing a park or rooming house community, operators are frequently called upon to mediate or adjudicate if disputes arise between residents.

2.4.1 Subletting:

It has been contended that the Act should permit park owners to prohibit sub-letting in the park rules, so that park owners can maintain adequate screening measures for residents (VCPA, issues paper p20). Similarly RAAV landlords believe that despite some rooming houses being run under a Part 2 agreement, a rooming house operator should always be able to withhold consent to subletting by a tenant in a rooming house.

2.4.2 Compensation for early termination

Park owners who charge an exit fee contend that they provide a mechanism for compensating the park owner for encumbering their land with longer-term leases, enable them to keep site rents


lower, and provide ongoing capital for the maintenance and improvement of the park infrastructure (VCPA, issues paper p23).

Similarly RAAV landlords cite similar reasons for expecting the right to claim compensation against a bond of up to 4 weeks when a rooming house tenant terminates early and (on rare occasions) causes a significant loss.

In contrast to a view expressed by a tenancy advocate organisation, RAAV is unaware of any rooming house operator (or any regular landlord) who is alleged to have opportunistically used leases to claim compensation for lease-breaks in conjunction with deliberately encouraging antisocial behaviour to cause lease-breaks as a strategy to make higher profits in preference to maintaining longer and more harmonious tenancies.

RAAV members suggest that in their own experience; “You can’t run a successful business without happy clients”, and believe there would be great difficulty in finding evidence of such irrational behaviour by any landlord.

RAAV landlords also highlight that the total claimable compensation from the bonds of all residents or tenants in a rooming house is typically many times higher than the bond under a single lease for an entire regular house because this is required to keep in line with the equivalently higher total risk such landlords face from all their tenants/residents combined.

2.4.3 Notice for Rent Increase

An industry stakeholder has argued that for rent increases that have been disclosed in the site agreement and agreed to by both parties in advance, the notice of rent increase should not require a statement advising of CAV rental assessment rights.(VCPA, issues paper p23). RAAV support this in rooming houses for identical reasons.

2.4.4 Community considerations and conduct of other residents

When screening prospective residents, operators may consider the prospective resident’s potential to fit into the community of occupants in the park and their willingness to live in harmony within the park community. This enables operators to maintain a safe and comfortable living environment for their residents, and to minimise the risk of violence and other anti-social behaviour. (Log Cabins, issues paper p29).

The close living conditions in a park mean that disagreements and tensions sometimes arise between residents, tourists and other occupants. An industry stakeholder has raised concerns about the difficulties that can be created where a resident’s conduct, through acts of aggression, bullying and intimidation, can create a hostile environment affecting the safety, peace and wellbeing of other residents.

The resident’s conduct, while unpleasant, may fall short of constituting grounds for issuing an immediate notice to vacate or a notice to leave, 60 and/or it may be impossible for the operator to establish adequate proof of the offending conduct, particularly in circumstances where other residents may be unwilling to provide formal evidence for fear of reprisals.


In these circumstances, which require the operator to consider both the rights of the individual resident and the rights of all residents in the park, an industry stakeholder contends that the ‘no specified reason’ notice to vacate (a 120 day notice for Part 4 residents and a 365 day notice for Part 4A site tenants), while rarely used, can be an important tool for operators to ensure the overall wellbeing and morale of the park community.

RAAV landlords rely on the 120 Notice to “Leave for No Reason” and wish to note that the use of long notice terminations for severe safety breaches is evidence that the Notice to Leave provision is too onerous on Landlords where residents are unwilling to provide formal evidence for fear of reprisals, and recommend that the evidence requirements for Notice to Leave VCAT hearings should be relaxed.


3. RAAV’s response to Questions 38 to 54


Questions 38: Should the definition of a rooming house be changed to include emerging accommodation models, and if so, how should it be changed?

The current threshold in the definition of a “rooming House” is generally acceptable and should certainly remain untouched. The current definition in the RTA clearly states that:

A ’rooming house’ is defined under the Act as a building in which there is one or more rooms available for occupancy on payment of rent – in which the total number of people who may occupy those rooms is not less than four, or

the building has been declared by the Minister of Housing to be a rooming house.

However, there needs to be clearer definition included in the RTA of what is NOT a “Rooming House”. There is often confusion about what constitutes a rooming house and the definition also needs to be consistent across all Acts which impact on the rooming house sector. As an example, there are instances of some local councils that are applying different definitions by relying on the Building Code, etc. and adopting outside interpretations.

Extending the definition to include other forms of accommodation appears unnecessary and unworkable especially as there is no mention of what emerging models might apply.

Changing the definition to clearly define what does constitute a rooming house would appear to be of great importance as the Rooming House Operators Act (2015) will need this to be able to determine what constitutes a rooming house to easily enable action to be taken against Unlicensed Rooming House operators. The definition of a Shared House needs to be clearly identified, as does the situation where due to cultural norms there can be large numbers of family/extended family members living in the one house.

RAAV has provided a new rooming house model in section 1 of this submission which suggests that the current rooming house model can be streamlined.

Question 39: What alternative models of regulation may be appropriate for the rooming house sector and why?

RAAV has indicated in Section 2 that a streamlined model can be developed. This would incorporate an increased level of self regulation.

Registered Rooming Houses do not generally offer support services for tenants and should not be viewed in this manner. Self regulation by operators or groups that have a proven history of compliance and evidence through annual CAV inspections indicates a high level of compliance amongst Registered Rooming House operators.


In addition to the mandatory minimum standards which they must observe, they desire to do the right thing which is evidenced by them being registered and seeking to operate under the forthcoming Licensing requirements.

Question 40: What models of rooming houses are emerging, or from interstate or overseas experience are likely to emerge, in Victoria, and what issues arise in relation to these models?

There is an emerging presence, albeit in its infancy, of purpose built accommodation which is being designed and deemed “class 1b”or “class 3” (under the Building Act). These new properties may require little or no sharing of facilities. As these buildings generally provide a higher degree of safety and amenity than traditional Registered Rooming Houses, it is relevant to consider exempting operators of these buildings from some parts of the RTA, for example some of the rooming house provisions.

Gentrification of the inner and middle ring suburbs over the last 20 years or so has had a major impact on the availability of affordable accommodation for disadvantaged and vulnerable persons. The impact has been the gradual demise of the larger homes or accommodation such as private hotels which operated as the traditional style of Registered Rooming Houses. This reduction has been accelerated by the overburden of legislation to stay compliant.

The implementation of the Rooming House Operators Bill (2015) will only encourage more operators to give up and either sell the properties for redevelopment or convert to standard rental housing.

A grey area of housing in the RTA is where there are multiple separate and unrelated tenants in standard homes i.e. four people in a four bedroom home which can be and are called Share Houses. This is the area talked about in question 38 which needs defining. If this style of property is deemed to be a rooming house, then all of the appropriate legislation including the disability access provisions will need to be addressed to become compliant.

The issues here are the unregistered non-compliant ones that are giving the whole industry a bad name. The non-registered sector consists largely of ordinary landlords renting to several individuals under the one roof. Typically advertisements for such places can be seen on gumtree, flatmate finders, etc. The problem is exacerbated in high rise buildings when safety becomes a concern. RAAV is concerned that both Councils and CAV are reluctant to take a hard line on such operations. Instead an easier option by regulators is to target compliant operators. A result is that this causes the unregistered sector to flourish.

Questions 41: What other measures might be considered to strengthen protections for residents from unscrupulous rooming house operators, and enforcement against unregistered rooming houses?

As stated in the answers to earlier questions, clearly define what constitutes a rooming house. Once that is done, identify the unregistered houses, encourage the owners/landlords to become compliant and if they don’t, then start enforcing the rules and prosecute those landlords. It will not


take long for the word to get around that this is happening and there would be an immediate & significant reduction in tenants being taken advantage of.

Assistance could be provided for compliant Registered Rooming House Operators. There is obviously a demand for this type of accommodation so help the good operators to provide more quality accommodation.

Other industries recognise the need to provide assistance to their operators. Measures could be copied from other industries, for example the annual revenue from the sale of Victorian Recreational Fishing Licences goes to sustainability initiatives like restocking of fish levels and upgrades of fishing facilities. Similarly the Government may consider quarantining all or part of the fines collected from Un-Licensed operators and use these funds to subsidise council registration and licensing fees for Registered Rooming House operators.

Question 42: What issues arise with the monitoring and enforcement arrangements for the regulation of rooming houses, for example by local government, and how could these be strengthened?

A major threat to Registered Rooming Houses is by some local councils who use monitoring, enforcement and the cost of annual registration as a tool to curb rooming house growth or actively trying to get rid of them due to political pressures by the community. There is too much time spent by them “inspecting” Registered Rooming Houses.

Some local councils focus only on attempting to tax/fee/charge existing Registered Rooming House operators as they are easily identified and provide a source of funds. When you apply this comment from the Issues Paper, Section 7 Rooming Houses “Within the regulated rooming house sector, the CAV state-wide inspection program has demonstrated a high degree of compliance with the current prescribed minimum standards requirements” , it is self evident that the Registered Rooming Houses are not the problem.

Some councils have in the last year raised their annual registration fees by over 400%. This occurred in the same year that hairdressing business registration revenue was lost and rate rises on properties were capped at 2.5%. An obvious solution to this problem is that the State Government takes over the administration of rooming house registration and set state wide rates or at least limits on the cost of registration.

The demand/need for Registered Rooming Houses has been with us for decades and will not go away. It is important for the Government to be more active about closing down unregistered, non-compliant properties to deal with the danger to all tenants using this often substandard area of the accommodation market. As stated in previous responses to the Review, an electronic system that identifies both tenants and Landlords will assist in keeping an eye on landlords who are running unregistered rooming houses as tenants who have issues will be lodging complaints that will be kept in the system. Also it will be evident that operators who register multiple bonds for one property will show up straight away.

Again, once the definition of a rooming house is clearly made then councils could more easily identify and tackle the increasing level of unregistered rooming houses.


Question 43: What are the risks, if any, of limiting the type of agreement a resident can enter into with a rooming house operator?

Almost every rooming house is operated differently to the next one. There would be no sense in limiting or attempting to limit the types of arrangements that can be entered into with tenants.

If tenants are limited to only being able to use the Rooming House Residency Agreement then tenants who are looking for security of tenure, as afforded by a standard RTA agreement, would be disadvantaged. RAAV supports comments made by TAAP agencies who often state that tenants face uncertainty when they do not have a feeling of being settled especially if they are vulnerable or disadvantaged.

Limiting the type of agreement used could have serious commercial consequences. For example, this may affect the type and cost of insurance available to the operator. It may cause hardship to the owner and also indirectly to the residents if a change is made which limits types of lease arrangements and leads to a breach of the owner’s insurance policy or bank loan agreement. We are aware of the hardship that has been caused to tenants when rooming houses have been closed or sold as a consequence of a loss of eligibility for insurance or finance.

If anything, there needs to be greater flexibility to enter into a suitable agreement for the type of property and to protect residents and operators better.

Question 44: What arrangements should apply where a rooming house resident and operator wish to enter into a fixed-term agreement?

RAAV recognises that an objective of this Review is to support longer and more stable tenancies and encourage renters to stay longer and sometimes indefinitely. It would therefore be counterproductive to support some tenancies whilst limiting others, and particularly as Registered Rooming Houses often accommodate the most vulnerable.

Where a standard RTA lease is used on a six month or 12 month period, an issue to be considered is that the tenant needs to accept a higher level of inspection due to the various regulatory agencies coming in for scheduled or random inspections as well as the need to maintain the house for the benefit and wellbeing of all residents.

Fixed-term agreements should be available under part 3 of the Act. This would provide a better balance between security of tenure and protecting the rights of other residents in the rooming house.

Question 45: What reforms, if any, are necessary to strengthen the existing provisions in the Act in relation to the application and enforcement of rooming house rules?

They are called “house rules” for a good reason as each house requires its own uniquely tailored set of rules. Mandating a uniform set of “house rules” is unworkable as they often need to be tailored to suit the specific property and even sometimes tailored to issues that are prevalent in some resident groups, but not others. There are some Registered Rooming House operators who do not use or require “house rules”.


Provisions to challenge rules are adequate and this provision is sensible. The idea to increase the display requirements is overkill. It would make more sense to change the requirements to “display “house rules” only in the common areas”. It makes no sense to require the owner or operator to display something in each room that is the same for all residents

The “house rules” may also be provided to tenants as an addition to any written agreement which would remove the need to display them in the tenant’s room. This would also eliminate the need for the operator to confirm that they are on display in each room.

A uniform set of house rules would not cater for the many different types of Registered Rooming Houses and CAV would be inundated with requests for variations. There have been no facts provided in the supporting documentation outlining the numbers of Registered Rooming House tenants applying to VCAT seeking orders to have unreasonable rules declared invalid.

The existing system where a resident can seek to have a rule made invalid is fine.

Question 46: What is an appropriate frequency period for general inspections in rooming houses?

There are many different levels/standards of rooming houses with some high end ones housing a more corporate level of tenant are less likely to need frequent inspection than standard Registered Rooming Houses that support/accommodate vulnerable & disadvantaged persons. The latter properties are more likely to house hoarders or have sanitary standards that might place other residents at risk so they will require more frequent inspection.

General inspections can occur up to 12 times per year at the request of external authorities despite the nature of a written agreement being a residency agreement or tenancy agreement. This is because operators typically get separately inspected by CAV, the council’s building department, the council’s health department, the council’s planning department and social welfare advocates. In addition most smoke detectors (mandatory in bedrooms) must be tested monthly, often by the operator.

Operators also need to retain the right to do unplanned inspections to investigate complaints by other residents in relation to drugs, theft, weapons, overcrowding, noise, pets, hygiene and odours etc.

With all this in mind, it is sensible to keep inspection frequencies at one every 4 weeks for the harmonious running of the rooming house and to the benefit of all residents.

A beneficial amendment to the RTA would clarify that inspections should be permitted every 4 weeks if there is a lease for a room in a rooming house.

Residents do not get upset by the inspection itself but sometimes react if they are unaware of the valid reason for the inspection. The current rules appear adequate; however again stating that it would be advantageous to give operators the ability to inspect the rooms of tenants on standard RTA leases more often.


Question 47: In respect of pets in rooming houses, what is the right balance between the interests of a resident who wants to keep a pet, the rooming house operator, and other residents?

RAAV restates the position it has outlined in previous responses to this matter in Issues Paper that rooming houses are not suitable accommodation to house pets. RAAV considers that the comment at 7.5.3 of the supporting documentation says it all, viz.

The Act prohibits the keeping of pets in rooming houses without the consent of the rooming house owner. This prohibition recognises the communal nature of residence in this form of tenure, where residents live in close proximity to one another and share facilities/common areas, and the disruptive effect one resident’s pet may have on other residents of the rooming house.

As stated in our response to an earlier Issues Paper, RAAV believes strongly that Registered Rooming Houses are not suitable accommodation for, and it is not feasible, to allow pets in a rooming house without the consent of the operator.

Allowing pets in a rooming house would create numerous issues, viz.

How many animals will the council allow on the property? Will the pets fight with one another? Will they disturb the peace and quiet of other residents/neighbours? Will they spread allergies in an environment where residents are in close contact with each

other? How does the operator insist on cleanliness? If the pet has left fleas behind when its owner vacates, will this affect the wellbeing of the next

tenant? And so on.

In addition, operators have the right to approach and enter their properties without fear of attack by a dog or escape of a pet. They should further have the right to know the rental property is not at risk of damage by pets and that the tenants or they won't step in excrement when outdoors.

Landlords may use their discretion to allow residents to keep specified pets only. For example a cat may be permitted in a single house and a resident may be allowed to keep a goldfish in a Registered Rooming House. Another resident may be permitted to have a snake in a heated terrarium because the rooming house has separately metered electricity and that tenant has proved to be responsible.

The operator must retain the right to treat the interests of himself and all other residents above that of the individual and should be allowed to exclude pets as a house rule. Any proposed right for a tenant to keep a pet should not apply to properties with internal shared areas such as a rooming house.

Question 48: What should a rooming house operator’s obligations be under the Act in relation to the security of a resident’s person, and the security of a resident’s mail?

Operators cannot be made accountable for actions by others. It is up to each person to take responsibility for their own safety and behaviour. The Act works well as it is currently worded.


If the Act is changed and allows the removal of a tenant or guest of a tenant causing or threatening danger or injury to other tenants, the security of the other residents will be enhanced. However, making it a duty to provide more than what can be provided at law places an impossible burden on a landlord.

It is RAAV’s experience that the disputes in rooming houses are mainly between tenant and tenant and not between tenant and the landlord.

As for suggestions that there should be separate mailboxes for all rooms, there are at least two problems with this:

Australia Post only permits and recognises one legal postal address per property and Australia Post will not allow the postie to sort through the mail for non titled properties. Also tampering with mail or mail theft is illegal.

Any changes to the Act should take into consideration that there is now a significant drop off in the volume of mail being posted to the point that in the next few years alternate forms of delivery will be the norm.

Question 49: What are the advantages and disadvantages of making the timely payment of rent a duty owed under the Act by rooming house residents?

RAAV is concerned that there is not a prescribed duty to pay rent on time under Part 2 of the Act. The duty to pay rent on time MUST remain and part 2 should also include this duty.

This should be a duty on all tenants under the RTA. It is part of the contract entered into that the landlord provides the accommodation and the tenant pays for it. When those two things are not done there is a problem.

The timely payment of rent helps keep residents accommodated and reduces disputes at VCAT so it is effectively good for both parties by encouraging and causing more stable tenancies.

Question 50: How should the Act address damage caused by a rooming house resident?

As discussed in previous submissions the provisions around damage are so important that it is imperative that they be retained. In fact, the provisions should be strengthened to allow the owner to treat rent payments as compensation for damage. This would be an incentive to prevent tenants from deliberately and maliciously destroying safety systems like smoke detectors, fire blankets, extinguishers, etc which are mandated and are there to protect all residents.

A tenant who breaks something or causes damage should pay for the repair or replacement.

Question 51: What obligations should a rooming house resident owe under the Act in relation to the quiet enjoyment of other residents in the rooming house?

It is imperative that managers of rooming houses retain the ability to take action against residents and their visitors who flaunt the accepted behaviour in a rooming house. Antisocial behaviour can be common and the neighbours, both within the property and externally deserve to know that


managers of such premises are provided with the right tools to do their job in line with community expectations.

Again, it is imperative that tenants have responsibility for their actions and the behaviour of their invited guests to assist with ensuring the satisfactory amenity and quiet enjoyment of the other residents and guests.

Consideration should be given that the tenant’s responsibilities should extend to the manager or agent when they are on site as RAAV is aware that there have been instances where threats have been made against them when implementing these important matters.

Question 52: How should the Act regulate liability for utilities in rooming houses?

Where a rooming house has separate metering of a utility per room, it is reasonable for that consumption to be on-charged to a tenant if that is the arrangement agreed to when the lease commenced. The legislation on standard rentals is clear that if there is no metering, then there is no legal ability to charge tenants.

The definition in the RTA for Separately Metered does not accommodate metering in an Imbedded network as there is no need for approval requirements for child meters installed by the building owner’s licensed contractor and parent meters are installed and controlled by the utility provider. The RTA does not provide opportunity for operators to charge tenants for water usage.

When the RTA in its various iterations was written, the cost of water was relatively cheap and we now have different rooming houses models with new examples featuring individual bathrooms and washing facilities. This situation has changed and operators should be able to charge tenants for water in the same way as electricity or gas.

Where the majority of residents in a rooming house have health care cards, there should be alternative options to enable the winter energy concessions to apply directly to that property via the utility suppler.

Question 53: What other issues arise in relation to residency in rooming houses?

As stated in response to Question 48, the majority of disputes in Registered Rooming Houses are between residents and not with the landlord.

As evidence of this, RAAV has seen a growing number of cases where tenants evict each other using the intervention order process because they know that too often a landlord will have insufficient evidence to reliably expect to win a possession order.

This indicates that the notice to leave provisions should be made more accessible to Registered Rooming House operators.

The RTA Review should consider implementing a better and faster process for dealing with disputes between residents.


Question 54: Are there any housing models not currently regulated by the Act that should be covered by the Act, and what are the key considerations that need to be addressed?

There are so many different models available, they cannot all be regulated and many should not be regulated for rooming houses.


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