Podcast: States’ split is rental as anything

This week, having survived a computer crisis on the home office front, we delve deeper into the differences between the way renters are treated in Victoria and NSW.

In the same week that Victoria’s new rental laws come in, curbing “no reason” evictions of tenants, NSW Fair Trading confirms that they will be reinstated as soon as the post-Covid period is over in September.

So why should property owners not have the right to end their tenancy leases when they want to? 

Why should they need to prove that their reasons are valid, such as showing that they have permission to undertake renovations, or that they have signed a contract to sell the property?

Jimmy puts up a strong argument that many landlords in Australia owe a debt to the community as a whole and that involves treating tenants fairly and decently.

You can find the details of the NSW transitional measures for renters and landlords HERE and the Victorian regulations HERE.

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Then we move on to the “brave” developer who, according to a story in a recent Sunday Telegraph, complained about building commissioner David Chandler closing down one of his apartment block building sites because of defects that were being built into the structure – faults that the eventual purchasers would probably end up paying to fix.

According to a story in the Sunday Telegraph last week, Omar Abdul-Rahman, director of OandE Developments, had a litany of building defect complaints raised against him, or companies of which he was a director, dating back to 2017.

He complained that he had never been on a building site where Australian Building Standards were resolutely adhered to.

Maybe so, but if he wasn’t on David Chandler’s radar before, he certainly will be now

Finally, we move on to an idea being floated – not for the first time – that voting at strata AGMs should be compulsory, as it is at every other level of the democratic process.

Jimmy argues that if strata really is the fourth level of government, then it should have the same compulsion to vote as in national, state and council elections.

Sue argues that it’s up to strata schemes to engage their owners more effectively and if they can’t do that, then why should owners turn out for dreary nights at AGMs when either nothing happens or nasty personal disputes are played out in public.

That’s all (and more) in this week’s podcast.

Transcript In Full

Jimmy  00:00

Computers, eh?!

Sue  00:01

Yes!

Jimmy  00:02

They’re great when they work, and they’re bloody useless when they don’t.

Sue  00:07

Well, I had a problem with my computer and you tried to fix it (which I was very grateful for), but apparently you ‘bricked’ the computer.

Jimmy  00:16

You’ve never heard that phrase before?

Sue  00:17

No, I havent.

Jimmy  00:18

Which means literally, you have turned the computer into something that is as useful as a brick.

Sue  00:25

Yes. Well, thank you very much for that, Jimmy!

Jimmy  00:28

I went and helped you get a new set up and almost stuffed that up, because I used the wrong dongle.

Sue  00:37

A complete nightmare. I hate computers!

Jimmy  00:40

I think they’re great. Okay, today we’re going to be talking about different attitudes to renters, between New South Wales and Victoria. We’re going to be talking about the brave but possibly foolish man who decided to take on Building Commissioner, David Chandler. And, we’re going to discuss whether it would be a good idea to have compulsory voting at AGM’s in strata buildings. I’m Jimmy Thomson. I write the Flat Chat column for the Australian Financial Review.

Sue  01:10

I’m Sue Williams and I write about property for Domain.

Jimmy  01:13

This is the Flat Chat Wrap. So, it was a very interesting coincidence regarding two political changes in Victoria and New South Wales the other week, concerning rentals. In New South Wales, they announced that they’re coming to the end of the period where you can’t evict somebody for non-payment of rent, thanks to the COVID thing, but then they have this complicated moratorium that will last until September, where if you have breached an agreement to pay off the rent that you owe, you can’t be evicted and landlords have to undertake to make an agreement like that in good faith. There’s lots of little complicated side issues, but basically, if you have reached an agreement with your landlord, and you fulfill that agreement (and even if you only miss a week’s rent, or a week’s payment of paying off your rent), you can’t be evicted. It gets difficult if you’re two or three weeks overdue, so that seems kind of fair and reasonable. Except in Victoria, they’ve come out with a law  (the law has just come into effect), that the tenants cannot have their leases ended without a valid reason.

Sue  02:42

And that valid reason will be something like the owner wants to move into the property or they want to renovate the property or something like that?

Jimmy  02:49

Yeah, but they’ve got to prove it. They can’t just say, ‘oh, we’re gonna move in.’ and you have to go ‘alright. You know, we’ll move out.’ And then the next thing you know, you see the property advertised for rent.

Sue  03:00

For a high rent.

Jimmy  03:01

Yeah. So, the reason that landlords would use what they call the no- fault, or the no -reason eviction, is because they’re limited in how much they can  raise rents, when  they’ve got a sitting tenant,  and it’s like, only once a year and it’s got to be a reasonable amount. Obviously, at the moment, that would be kind of irrelevant, wouldn’t it?

Sue  03:26

Yes, because the consumer price index has actually fallen. Really, it’s quite hard to justify raising rents in any way.

Jimmy  03:34

And also, there’s a lot of availability, isn’t there?

Sue  03:36

Yep, that’s right. There’s lots of supply. So, rents are falling, particularly apartment rents.

Jimmy  03:42

Right, so now would be the perfect time to bring in the no-fault eviction, when it’s not going to actually affect landlords. Julia Finn (the opposition spokesman in New South Wales, on strata and Fair Trading, which covers rent and stuff like that), she came out with a proposal that in September, New South Wales should also get rid of the no- reason evictions.

Sue  04:10

Yep, that sounds like a really good idea. I mean, we have no-fault divorces, don’t we?

Jimmy  04:14

Yeah, well, she was absolutely rubbished in Parliament and in press releases by the Fair Trading minister (or one of his spin doctors), saying that this was a cheap political point that she was making and taking advantage of their generosity in this moratorium, and all that, but really,  it’s pretty basic stuff.

Sue  04:36

Yeah. It’s kind of fair-dealing. I mean, tenants create wealth for owners and it’s only right that owners treat them with respect.

Jimmy  04:45

You know, we’re moving into a very different world, where a lot of people either can’t afford to buy houses, or they don’t necessarily want to spend the first 20 years of their working lives, paying off a mortgage. People should have that choice, but they should also have a reasonable expectation that they’re not going to be asked to move house every six months, just so that a landlord can pump up the rent.

Sue  05:13

Yeah, absolutely, and it seems a bit daft to suggest that it’s only threatening landlords, to say that you can’t evict people. It’s a social justice issue, isn’t it really?

Jimmy  05:14

Yeah. Julia Finn’s Amendment (which was laughed out of Parliament, pretty much), had a list of reasons where people could be asked to leave and it included things like non-payment of rent or damage to property, or being anti-social with the neighbors. All the kinds of things you go, ‘yeah, that’s reasonable.’ What it stopped was the landlord saying, “it is easier for me to raise the rent by kicking you out and getting new people in, than it would be for me to go through the process of  (in a civilized way,) saying, ‘hey, I need to put the rent up a bit. Are you okay with that?’ There’s another aspect to this; I was thinking about this the other day. I’m sure a lot of landlords and property owners listening to this will go ‘hang on. This is our property. We’re paying through the nose for this. We paid the mortgage; we can do what we want.’ I think it’s not just a moral, social responsibility that comes into play here, (although I think any decent person would have consideration for their fellow human beings, but that seems to be in short supply). You’re looking at me oddly…

Sue  05:39

No.

Jimmy  05:43

So, is this surprising?

Sue  06:38

No, I’m agreeing with you, Jimmy. I was just thinking; I wonder if some of the problem is that some of the Liberal politicians who are talking about this, have never actually rented in their lives, or they don’t know people who have rented. Or, they have this very old-fashioned idea that renters are kind of no-hopers, who should be buying property and should be saving their money and buying less mashed avocado on toast, and they should be going into the property market. So, the only people left renting are the people who are just no-hopers and so therefore, they deserve to be treated badly.

Jimmy  07:13

I think there’s an element of that, but as I was going to say,  the idea that property owners have no responsibility to renters, falls over when you think, ‘you’re getting a massive tax break on that property’.

Sue  07:27

With negative gearing.

Jimmy  07:28

Yeah. So the community has contributed to your wealth; the payback is that you treat members of the community, decently and fairly.

Sue  07:38

That’s an interesting way of looking at it.

Jimmy  07:41

I hadn’t really thought about that before. I mean, they’ve just got done away with negative gearing in New Zealand and they keep talking about doing it here. It just makes so much sense. Except, the politicians are terrified they might lose votes. But, if you’re going to get people benefiting financially from negative gearing, there is a payback, which is that they behave reasonably with the people who are paying their mortgages for them, basically. So, that’s my little soapbox.

Sue  08:15

We need the New South Wales Government  to get their asses into gear…

Jimmy  08:19

On this and so many other things.

Sue  08:20

Yes, and  have a really close look at the Victorian legislation and start thinking, ‘well, there’s a lot of good points in that legislation and we don’t want to be left behind.’

Jimmy  08:25

Yeah, but the Victorian legislation would just make their hair curl (those that still have hair). One of the things is, if you say, ‘I’m renovating,’ in that notice you send to your tenants… ‘I need you to vacate, because I’m renovating,’ you have to have a copy of your plan of works. If you say you’re selling, you’ve got to have a copy of the contract with a real estate agent, to list the property.

Sue  08:55

I think that’s really fair enough. I mean, we both know people who have been renting for a long time, and who have had to move almost every year. They just set up a place; they might have a pet as well and then suddenly, they have to move for no good reason whatsoever. They have to find somewhere else; have to find somewhere else that accepts pets. Somewhere else in the same area or close to work, or within the same train line of work. It can put an enormous amount of stress on people.

Jimmy  09:16

Absolutely and there’s been a report out this week about victims of domestic domestic violence being forced to stay where they are, when they want to move, because they can’t find reasonable accommodation. The whole private rental market, it needs another, closer examination. People can’t just say,  ‘my home is my castle. I can do with it what I want and if people don’t like it, they can go somewhere else.’ The reality is right now, there are other places for people to go, but we know in this economy, it’s boom and bust,  and it won’t be long before people are scrambling to get rental accommodation.

Sue  10:05

There was also that idea of having a blacklist of owners; of landlords. There’s a blacklist of tenants, as well. It’d be nice to see that get a bit of traction, too.

Jimmy  10:18

I was talking to a Labor MP;  a NSW Labor MP the other day, who shall remain nameless.  It was quite funny, because we sat and had a coffee for about an hour and he basically said, ‘so, what are the issues in strata?’ Of course, half of the people in strata are tenants, so that came up, but at the end of the hour, he was just sitting there with his eyes like saucers,  going, ‘what did I even think I was doing, when I got into this, because this is just such a big, messy, complicated business.’ It would help greatly, if somebody came along and just simplified things, and got us out of Fair Trading. The day after the Fair Trading minister is accusing Julia Finn of scoring cheap political points, he’s down at the Easter show saying, ‘I have given my personal tick of approval to the showbags.’ That’s how important we are; we are on the same level as showbags. After this, we’re going to talk about the brave (possibly foolish), man who decided to take on David Chandler, the Building Commissioner, and boy, did he come off worse. Okay Sue, who is this brave, but foolish, man?

Sue  11:37

He’s the director of a development company called OandE Developments. They’ve done lots and lots of developments, mostly around the inner west of Sydney. He’s received the ire of Building Commissioner David Chandler, who’s issued a Stop Work Notice on one of his buildings. He said it’s not up to standard. The director of this development company has said in return,  ‘no building companies are up to standard.’ He’s never been on a building site, which has been operated to Australian standards before. He’s basically saying, ‘other developments are shit, so it doesn’t matter that my one is really, either.’

Jimmy  12:22

Given the amount of times this guy’s been breached for various building faults, I’m not surprised that he hasn’t been on a building site that didn’t have substandard work going on, because most of them sound like they were his!

Sue  12:36

Yes, that’s right. He’s been picked on many times. He had a building on Liverpool road at Enfield, where the front wall just fell down in a pile of bricks, onto the street. He’s had  so much criticism, really, for his standards, but he’s always defended himself and said in the past (in court cases), that he’s been the victim of a conspiracy. It’s other people; it’s never him and he’s doing his best…

Jimmy  13:08

Well, he may well be; he may well be doing his best.

Sue  13:11

It’s not good enough, is it? He’s been fined many times, and been issued with lots of orders to remove infill from the site and restorate to previous levels.  Okay, yep, well, he’s been in a lot of trouble and he’s hitting out at David Chandler and saying, ‘look, this is not fair. Nobody else is doing a good job and therefore, he shouldn’t pick on me.’ David Chandler’s hit back and said that ‘no, this development company isn’t doing such a great job, and he should get his act into gear.’

Jimmy  13:48

This is exactly what David Chandler said he was gonna do, a year ago, when I spoke to him. He already had identified companies, (building companies and developers and builders), who were doing shoddy work. He was sending out a warning, ‘I’m on your case. If you are doing shoddy work, I am going to shut you down.’ Now this guy, he’s not saying ‘hey, my work is perfectly good and the standards are too tightly enforced.’ He’s saying, ‘no, it’s shoddy,  but everybody’s shoddy!’ It  reminds me of a story, when I worked on the Glasgow Herald. There was a guy up in one of the islands, who was done for drink driving and (this is a true story), his friend was called in as a character witness. They said, ‘what kind of character is he?’ He said, ‘ he’s a really good bloke, and by the way, he’s driven the car and been much more drunk than he was the night he got stopped by the police.’ The Sheriff (what they call the judge in Scotland), didn’t take kindly to that.

Sue  14:57

It’s hard when people just try and blame everybody else, but don’t actually look at their own…

Jimmy  15:03

It’s also good. I mean, this guy is doing David Chandler a great favor by highlighting the fact that he isn’t just issuing empty threats. He’s looking at building projects and going ‘this is substandard. People  are going to be expected to pay good money for this, and I’m stopping it, now.’  I can’t remember what the exact figures are, but it’s something like, if you correct faults in a building while it’s being built, it’s one eighth of the cost of doing it afterwards. So, he’s actually doing them a favor, in a way. This gentleman just doesn’t seem to be able to appreciate that.

Sue  15:45

You can guarantee one thing; this guy’s never gonna do another development now, without it being inspected by David Chandler.

Jimmy  15:52

He will be all over it. It said in this story in the Daily Telegraph last week, that he’d been a director of seven other companies (building companies), that had been breached for defects. This is exactly the kind of person that David Chandler was brought in to hunt down and if need be, put out of business.

Sue  16:16

Yep. If he doesn’t come up to scratch, I quite agree.

Jimmy  16:22

After this, we’re going to talk about something that rears its head every so often in strata land, and that is compulsory voting at AGM’s. That’s after this. Okay Sue, you’ve got compulsory voting for the federal election, you’ve got compulsory voting for state election, you’ve got compulsory voting at local council elections; why not strata AGM’s?

Sue  16:50

No, I think we have too many levels of government in Australia as it is and I think it is just too much to even consider compulsory voting in strata elections. I think the role of a strata committee is to really make sure the community is really engaged and interested in what  you’re doing, and if people aren’t voting or aren’t turning up at AGM’s, I think it’s a reflection on you; that you’re failing to get your community caring about it’s building.

Jimmy  17:23

Yeah.

Sue  17:26

I think there’s a real balance. Sometimes you have an AGM which is packed full of owners, because they’re all alarmed or angry at certain…

Jimmy  17:35

One issue.

Sue  17:36

Yeah, that’s right. Sometimes, you have nobody there, because nobody cares anymore. Or, they might not feel that they’re being taken much notice of. Lots of different reasons. I think there is a balance. The healthiest buildings might have half the residents in the building coming along to the AGM, because they care about the building; they’re interested. There’s lots of issues being discussed, and they feel they’re being listened to. I think that’s the ideal mark.

Jimmy  18:10

I think now that they’ve done away with the blind proxies; everybody just giving their proxy to the chairperson or the secretary or the strata manager… There’s a limit on how many proxies any one person can hold. That does bring the onus back on the owners to be involved. Sometimes, people just not having to be involved, means that people only look at if the levies are going up. If the levies are staying roughly the same, that’s all they care about. If they had to vote, then it would increase the chances of people going to the meeting. There’s also, quite clearly (and I’ve seen it firsthand), where the meeting itself can be such an unpleasant experience because of personal vendetta’s being played out. You know, usually between somebody on the committee and one of the owners, and it gets really nasty, and people just don’t want that in their lives. If they go along and they go through that, they go ‘that’s it; I’m not taking part anymore.’ So, you’re right. It’s up to the owners corporation (well, the strata committee), to make people want to be involved, but that is such a rarity. It’s certainly not more than half of the buildings around, where people feel ‘this is a great community; I want to be part of it.’ Much more likely, are people who are just going to say ‘I can’t be bothered. As long as my levies aren’t going up, I don’t care. Okay, there’s all these other issues. They don’t affect me directly. So, you know, why would I waste my time?’ You can’t force them to go to the meeting, but you can force them to vote. I also think that owners corporations should have to canvass all the ideas before the meeting. I think there’s something that should go out and say, ‘we want to do this, we want to do that, or we don’t want to do this and here are the reasons why.’ At least people can decide and vote electronically, knowing something about the issues, rather than just going, ‘oh, what does the secretary want? What does the strata manager want or what does the strata manager not want,’ and vote accordingly.

Sue  20:38

I think there should be carrots in place, to lure people into meetings, rather than sticks.

Jimmy  20:44

Carrots arent going to do it. Chocolate might.

Sue  20:48

Well, that’s a nice idea, but if you’ve got a really lively strata committee, which is always coming up with good ideas to improve buildings; maybe improve the communications or start herb gardens or start a wine appreciation society or a book club. A really interesting, vigorous strata committee with lots of ideas, rather than people just being on it, because they’ve got nothing better to do. You want people there who want to improve the community.

Jimmy  21:02

Yeah, but we know the reason people go on committees; some people want to go on the committee to push their own agendas. Some people want to go on a committee because they want to stop other people from pushing their agendas, or at the very least, protect their own interests. Some people go on the committee because they might be retired, and they’ve got nothing better to do with their time than be in a committee and they feel that sort of compensates for not having a job anymore, and not having the social life that comes with having a job. Some of these people are great, because they contribute their skills and energy to the building. That’s fine, but there are very, very few people who go on committees on the basis of, ‘you know what, I just want to give something to the community.’ That’s their only agenda.

Sue  22:14

That’s a real shame and that kind of atmosphere should be engendered by the strata committee. They should be working to make sure that they get great people and they could say to them, ‘look, you only have to be on for a year, and then we’ll let you go, but  you just come and contribute for a year.’

Jimmy  22:32

We’ll release your cat from captivity.

Sue  22:36

Unfortunately, you see so many buildings, where people have been on committees for years and years and years, and nothing ever changes. They don’t have any new ideas; they don’t want to see anything changed.

Jimmy  22:46

Well that’s it. I mean, a lot of them are on the committee to make sure nothing changes.

Sue  22:49

But, it’s up to them to make sure that you have committees with a huge range of experience. I remember in one of our buildings, when we started up, we had something like four hairdressers on the strata committee, because that was the nature of the demographic of the building. You kind of always want to have somebody who’s got some engineering interests; you want somebody who’s into finance, you want somebody who’s creative. You want people really determined to make the building a bit better. We’ve had some weird things over the years. There was somebody who wanted to turn the gym into a steam room, which was kind of a bit bizarre, but at least they were thinking about these things. People were respectful and discussed things and then either decided yes or no. We kept the gym.

Jimmy  23:37

I mean, that’s the function of democracy, that the crazy ideas get airtime. You do get a lot of people who just don’t want anything to change, especially if it’s going to cost them money, because more than 50% of the apartments in New South Wales (probably in Australia), are owned by investors. There are people who never set foot in the building from the day that they buy it, or even before then. They’ve got no idea if the building’s deteriorating or not. If the committee is tightly held by a small number of people who are controlling the message, then they don’t know what’s happening to the building, until suddenly, they’re finding it’s harder to rent or harder to sell, because the building just looks crap, because it’s been allowed to get rundown.  I don’t know if forcing people to vote is the way to get around that, but getting people to turn up occasionally and have a look at their investment might be a step forward.

Sue  24:37

Certainly.

Jimmy  24:39

Thank you very much, Sue, for your contribution.

Sue  24:43

Great Jimmy, nice to be here.

Jimmy  24:44

And we can get back to our Easter eggs now. And thank you all for listening. Bye.

Sue  24:51

Bye.

Jimmy  24:53

Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website, www.flatchat.com.au and if you haven’t already done so, you can subscribe to this podcast completely free on Apple podcasts, Google podcasts, Spotify, Stitcher, or your favorite pod catcher. Just search for Flat Chat Wrap with a W click on subscribe, and you’ll get this podcast every week without even trying. Thanks again. Talk to you again next week.