Podcast: Renters rights and strata safety fright

Three serious stories straight off the website have caught our attention on the Flat Chat Wrap podcast this week – but there’s a bit of fun too.

The first two reports are changes planned in NSW laws to make life more secure and a bit easier for renters.

Premier Chris Minns announced last weekend that the government is going to stop no-fault evictions – where landlord move tenants out of their properties because that’s the easiest way of pushing rents up beyond what might be considered reasonable.

At the same time the government in going to bring in transferable electronic rental bonds for tenants who are on the move (willingly or otherwise).

When finances are tight, and moving home is costly anyway, people can’t afford to have a chunk of money tied up in their old bod when they are having to pay their new one.  You’ll find both stories HERE.

Then there’s the question of the strata scheme that was fined $235,000 for breaches of Workplace Health and Safety regs. Does the fact that it was non-residential mean we won’t be affected?

Or are we liable for WHS if there are Airbnbs in our blocks – or even if we are just working from home?

And finally, we launch Hug Your Strata Manager Day and you can do that HERE. That’s all in this week’s Flat Chat Wrap.

Transcript in full

Jimmy  00:00

Couple of big pieces of news for tenants over the weekend.

Sue  00:04

Yes, good news as well.

Jimmy  00:06

I think so. And since tenants are half the population of strata, that’s big news for us too. So we’re going to be talking about those items that came out, two different things that will affect tenancies in New South Wales and an alarming story about a commercial property and a strata scheme that was fined $225,000 for not fulfilling its obligations under the Work Health and Safety Act. I mean that somebody died, so that’s probably more important than somebody getting fined. Anyway. We’ll talk about that and some other stuff about my “give your strata manager a hug Day” plan

Sue  00:55

That was unexpected.

Jimmy  00:56

There you go. We’re were always full of surprises. Here. I’m Jimmy Thomson. I write the flat chat column for the Australian Financial Review,

Sue  01:04

And I’m Sue Williams, and I write about property for domain, the Sydney Morning Herald, the Melbourne age and the AFR.

Jimmy  01:10

And this is the Flat Chat Wrap.

01:14

Music.

Jimmy  01:25

So the two big pieces of news for tenants, were the premier Mr. Minns announced at the weekend, at the Labor Party Conference that they’re going to end. No Fault, evictions,

Sue  01:39

Fantastic. Well overdue, I think,

Jimmy  01:42

Brings us into line with Victoria, the AC T, I think South Australia. And what it means is, if you’ve got a lease, you know, you’ve gone past the original lease, what’s been happening is that, especially with rents going up, landlords are saying to tenants, okay, we want you out, because they can put the rent up by more than if they say, Okay, we’re going to put your rent up. Because if that rent rise is unreasonable,

Sue  02:09

It can be challenged.

Jimmy  02:10

It can be challenged, yeah, so they say, Okay, we want you out. And people have to move out of homes, and it’s not even that the landlord particularly wants those people out of their home. They just want to put new people in so they can get more money in the rent.

Sue  02:24

That’s right. Friends of mine were told that they had to leave, so they went straight back and said, Look, can we pay you more money? And in the end, they did a deal where they paid them kind of quite a lot of extra money. And the landlord was happy. But some other friends were asked to leave, and they went back and suggested more money, again, quite a lot of extra money. And the landlord said no, because he kind of felt that he would be able to get even more on the open market. And that apartment has been empty for two months now.

Jimmy  02:52

Haha, yeah, Greedy bugger. Yeah. But this is the problem. Is people getting booted out just so that the landlords can make more money. And it’s technically, legally correct, but morally not very good at all.

Sue  03:09

No, absolutely, because, I mean, landlords can increase the rent every year by a reasonable amount, so it’s not so they’re going to be hugely out of pocket in any way. Yeah, and it’s awful, I think renters having this kind of insecurity in their homes, yes, it’s absolutely awful that they can be cast out the whim of their landlord really.

Jimmy  03:31

Yeah. And if we cannot say to people that they’ve got a good chance of being able to buy a house or a flat anytime soon, then we should be encouraging them to put down roots and stay in the places that they want to live in.

Sue  03:45

Yeah, because renting can be a lifestyle choice, and if it’s a good lifestyle choice, then that’s fantastic. And we can’t, probably can’t build enough houses quickly enough to satisfy the market. So it’s up to us to make renting a much more positive choice,

Jimmy  04:00

And it’s good for owner residents as well. I mean, you don’t want the people who live next door to you to be changing over every six months, just so that the person who owns that apartment can make them a bit more money.

Sue  04:12

That’s right. I mean, apartment living is all about building community, and it destroys community when people are being turfed out of their homes for no good reason, really.

Jimmy  04:20

Yeah, they haven’t formalized the legislation that they’re going to bring in, but they said that there will be penalties for landlords who evict their tenants. I mean, you can still get rid of your tenants if they’ve damaged the property. And the property gets inspected twice a year. I think they’re allowed to inspect so you can keep tabs on that, that kind of thing.

Sue  04:41

Because we recently had our rental property inspected. We didn’t inspect it. The property manager inspected it, and I was amazed by the report that she sent back. You know, we’ve got fantastic tenants, yeah, but she kind of looked at every square inch of the apartment, I think really, I mean, she sent us loads and loads of photos, and. And wow, I don’t think we would have been able to have undergone such a rigorous inspection and come out quite well.

05:06

Did the inspection include the common properties of the building?

Sue  05:11

No, I don’t think it did.

Jimmy  05:12

So this is something that I’m going to be writing about soon in the Fin Review that you know you as a landlord, your apartment might be being well looked after by the tenant, but is the rest of the building being well looked after by the owner

Sue  05:12

That’s true, especially if you, you’re a landlord, and you don’t go back into the building very often or live away from it.

Jimmy  05:33

Yeah,

Sue  05:33

That’s a very good point. You need to know what the common property looks like,

Jimmy  05:36

Yes. So they’re going to bring in, I think in Victoria, the way it works is, as a tenant, you are told that the landlord wants you to leave for a valid reason, which is they are either selling or they want to move in. Now, if you then discover that they haven’t put it up for sale or they haven’t moved in, you can then go to court and get them fined for telling fibs, and I suspect it will be something like that here, so it will kind of be a reactive thing. You’ll have to get evicted first and then go and seek compensation. But that should deter a lot of landlords.

Sue  06:20

Let’s hope so, because I think some landlords say, Oh, they’re going to move in and they kick their tenant out and they never actually move in. Or maybe they, you know, go in there for a week or something and just pretend to be sleeping there, yeah, because they’ve got no furniture, obviously, yeah, and that’s a terrible way to circumvent the law.

Jimmy  06:40

Oh, yeah. I think there was a case in Victoria that somebody went to court, and the they’d been told that the landlord wanted to move back in themselves, and then they saw their apartment advertised with their stuff in the picture. Like the pictures taken in the apartment had their pictures on the wall, you know? And,

Sue  06:58

Wow,

Jimmy  06:58

This is just not right. Yeah,

Sue  07:00

No, it isn’t so I think some people have already reacted badly about this, haven’t they,

07:05

The Property Investors Council of Australia, and Mr. Ben Kingsley, that is his name. He has come out a bit predictably, saying this is a terrible thing. It means that rents will go up because landlords will stop putting their properties on the market.

Sue  07:25

What are they going to do with their properties? Then,

Jimmy  07:27

I don’t know. You know

Sue  07:29

They’re going to sell them. Maybe he’s, is what he’s going to say. Well, they’re no longer

Jimmy  07:34

They’re no longer available for rental.

Sue  07:37

That’s crazy. I mean, most good investors, they want great tenants, yeah, and they want to keep great tenants as well, and they’re not interested in just making a quick profit.

Jimmy  07:47

Oh, some of them are, or they wouldn’t be changing the law. Yeah, that’s true. Okay,

Sue  07:51

That’s why I said good, good, landlords

Jimmy  07:52

Good landlord. So maybe that’s true. Maybe people are selling apartments that would otherwise have been on the rental market. I don’t remember him complaining. I may be misrepresenting him here, but I don’t remember him complaining about Airbnb taking properties off the rental market. But he said that this had already caused rent rises in Victoria. So I checked and he said there’s something like, you know, over 1000 apartments had come off, or the availability of apartments had gone down by 1000 more than 1000 Rents in Sydney have kind of stabilized a bit, but they’re still going up in Victoria, but not as fast as they were before. So okay, so there will be a kind of settling period, but these issues of the availability of housing and the level of rents and the cost of buying and all that, there’s so many moving parts in those calculations. It’s you can’t say, Look, this one thing will change everything radically. Maybe it will. Maybe some landlords will take their properties off the market and sell them, but that is probably just as much a function of the fact that property prices are still going up. And it could be a function of the they’re going to be another rate price they’re saying interest rate rise. So just to isolate this one thing as being near the end of property rental as we know it is probably not exactly accurate. Let’s put it that way.

Sue  09:28

Absolutely, I would welcome renters getting more rights. And it’s awful to move into a rental property and to get settled and you’ve been through all the costs of moving in, and then maybe you’ve signed a six month lease, and at the end of the end of the six months, they kind of ask you to go. I mean, it’s an awful way to live, and especially, there are more and more families renting now as well. If you’ve got young kids, you’ve got the kids at school in the area, you’ve got all their stuff around the place. It’s really, really difficult to move and to find another property that’s suitable really in the same school catchment area.

Jimmy  10:03

Yes, it’s far from ideal that people can just be moved on, just so that landlords can make more money. And you know, do you hear landlords saying this all the time. Oh, everything is stacked in the tenants favor. And you know, there’s no rights for landlords anymore. This is absolute nonsense, as we know. So, yeah, it’s a good thing. It probably won’t come in until next year, I’m guessing, but it will be good when it does,

Sue  10:28

Because if these people are paying a lot of money to rent our properties, generally,

Jimmy  10:31

 Absolutely.

10:38

Now, the other thing that was announced was that the are going to come up with a system of transferable bonds. So they pointed out, especially at a time when people are struggling a bit with the cost of living. If you are leaving an apartment or a house and you want to get another one, obviously you got to live somewhere, there’s a point where you haven’t got your bond back from the place that you’ve been living in, and you need to put down a bond for the place that you’re moving into. And the problem with that really arises when the landlord or the rental agent hangs on to the bond and says, Oh, you’ve damaged a cupboard or something like that. So the government is bringing in, again, they haven’t got the technical details sorted out, but they’re bringing in a system where the bond is electronic and transferable.

Sue  11:30

That sounds much more handy, doesn’t it, really,

Jimmy  11:32

Yeah, so it would still depend on the bond not being challenged by the landlord. But you know, we had stories a couple of years ago about, well, this is before covid Actually, overseas students were renting apartments and then going to get their bond back, and usually the rental agent was delaying and delaying and delaying, knowing that the students had to go back to their home country.

Sue  11:57

That’s so awful.

Jimmy  11:58

Yeah,

Sue  11:59

Oh my god, the way people take advantage of visitors. I mean, they’re propping up our education system with their fees.

Jimmy  12:06

Yes,

Sue  12:07

Jeez.

12:08

And I think that any person who’s involved in the rental industry who takes a high moral ground on any of this stuff is is on shaky ground, indeed. So the transferable bond. I had a feeling they had a press conference notified for yesterday morning where the Housing Minister was going to be somewhere, and they were going to announce, and I think it all kind of got overshadowed by the, you know, the no fault eviction thing. I just got a sense it was that, hey, we’re having this press conference. Then I never heard anything else. I didn’t even get an email about what the press conference said. So, but that’s all out in the open now. So that’s a couple of pieces of good news for renters. Not happening immediately, but it will happen soon. When we come back, we’ll talk about the Workplace Health and Safety fine of nearly a quarter of million dollars against a strata scheme. And how there’s a lot more to that than it seems that’s after this.

Sue  13:18

So how did this come to your attention Jimmy?

Jimmy  13:20

Well, there was two things arrived last week, two emails. One was from only two. One was from David Bannerman’s office, strata lawyers. And they’re very, very active on social media and whatnot. And you know, the website, website looks fantastic, by the way, and they’ve just brought out a free handbook for strata committees.

Sue  13:44

Oh, that’s nice,

Jimmy  13:44

You know? It’s kind of nuts and bolts stuff, you know. And that will be available via our website, of course, but they issued this note about strata schemes that have commercial entities in them, have to be careful that they’re fully covered for workplace health and safety. And the other people who sent this were our strata managers on our investment property Net strata, the notorious people who are being investigated by Fair Trading at the moment, they sent out a thing saying, look, you’ve got to be careful at your workplace, health and safety. The wording of the two things was very similar, which made me think that maybe they’d come from the same source. Anyway, I looked into this, because they just said, this is a strata scheme, and this is a strata plan number.

Sue  14:36

And you think, Wow. I mean for an apartment building, I mean, there’s always work being done,

Jimmy  14:41

Yeah,

Sue  14:41

And if something happens suddenly, the strata building is liable. That’s a huge concern, isn’t it?

14:47

So I dug in. I went on the famous, notorious strata hub, typed in the number of the strata scheme, got an address in Wollongong, got into Google Maps. And Google Earth basically went up, virtually arrived at the place, and it’s a light industrial site. It’s not an apartment block.

Sue  15:10

Oh

Jimmy  15:10

Yeah.

Sue  15:11

And that hadn’t been pointed out.

Jimmy  15:12

That had not been pointed out. And this you think, well, maybe they didn’t know, but then it turned out that net strata are the strata managers for this block.

Sue  15:21

So they should,

Jimmy  15:22

They should have known,

Sue  15:24

Bit misleading, isn’t it?

Jimmy  15:25

It is kind of a bit alarmist. Now, the story was that this industrial site, so it had, you know, several units owned by different people or as part of a strata plan. And this industrial site had a big rolling gate, big, giant gate, big enough gate for trucks to get through,

Sue  15:43

Right?

Jimmy  15:44

Okay, and it was a sliding, rolling kind of thing on rollers. Somebody hit it with their car or the vehicle. Maybe when it was closed, I don’t know, they bashed it, knocked it off its bearings, broke the electrical motor, and so what the owners of one of the industrial units did was they got a guy to come in in the morning, unchain the gate, physically move it open and then close it at night. Now this guy was manhandling this gate himself. You know, it’s a big, big iron gate, and at some point, it came off its bearings, toppled on top of him, and he was basically crushed underneath it for 15 minutes before anyone else arrived to help him, and he died in hospital later. And it’s really tragic for him and his family, but then the Workplace Health and Safety people looked into this and discovered that, because it was a strata scheme, there is a belief that strata plans are exempt from workplace health and safety issues.

Sue  16:51

Nobody is are they?

Jimmy  16:52

 Yes, they are. If you are, if your strata scheme only has homes in it, then you’re exempt, because homes are exempt, right? However, what if you have commercial enterprises in those homes and and the alarm went, ah, and it basically, it was saying, check with your insurer, because your standard $50,000 insurance for strata schemes is not going to cover your costs if you get sued by Workplace Health and Safety people. So yeah, I mean, that’s your first thing is to check with your insurer to say, if they come after us, are we covered for this? And are we covered enough? Because $225,000 was the fine that the district court issued to the strata scheme, they separately issued a fine to the employer, but the strata scheme got $225,000 plus $40,000 legal costs, plus their own legal defense costs. So you’re talking you’re getting up to about $300,000 in reality, most strata schemes have a $50,000 legal cover, which is not going to come close to that. Yeah. So the question then is, do you lose your exemption if you have commercial work going on in your building? And what is commercial work in your in your building anyway?

Sue  18:19

Yeah. So what counts as commercial work in your building is that just when somebody comes in and fixes the blinds or

Sue  18:25

No, because somebody coming in as a service provider, or somebody who’s coming in to fix something should have their own insurances. That’s one of the things they tell you now, is, if you’re employing somebody to come in and do repair work, check that they’ve got the appropriate insurances, and if they don’t, don’t let them anywhere near the building.

Sue  18:45

So what does it mean if there is commercial interests in there

Jimmy  18:48

Is running Airbnb a commercial interest?

Sue  18:51

Oh, gosh. So if you’ve got a couple of units in your building which are advertised on Airbnb, yep, suddenly it might be considered a commercial place.

19:00

Yes, yeah. Or specifically, you might have, like a lot of people who run Airbnb, get companies to come in and run the cleaners, come in and change the sheets and the towels and the things. So say you have got a pool of water that your committee keeps saying, “oh, there’s a puddle there that we need to get the drain sorted. But you know, we’ll do that in the future, sometime” and a cleaner from one of these service companies comes in, slips and injures themselves seriously. that could potentially be a workplace health and safety issue. There is also a possibility that people who work from home,

Sue  19:43

Oh, that’s a commercial undertaking as well.

Jimmy  19:45

If the work that you’re doing from home requires people to go across common property to get to your home workplace, then that could be liable as well. And it could be beyond that, you know, or it might not be that.

Sue  20:02

Or if you’ve got retail at the bottom of your building,

Jimmy  20:05

Oh, that’s definitely but, yeah, they should have their own cover anyway, but it’s that kind of area. I was talking to a couple of people from strata choice, who are our friends and sponsors, yesterday, and I asked them this question, and they said it’s just so many grey areas. You there are some that are pretty obvious. They said that they had an apartment building somewhere they managed and somebody opened a massage parlor on the ground floor. And they weren’t saying what, what kind of massage parlor it was, but they realized that this was a commercial enterprise that had the potential for injury. People, you know, if your feet are slippy or whatever, and you fall at the very least, so they increased the insurance cover, and then went back to the massage parlor people and said, we’ve had to increase the insurance cover because of your business, you have to pay the difference.

Sue  21:02

Oh, did they get the money?

Jimmy  21:04

Yeah.

Sue  21:04

Oh, good,

Jimmy  21:05

Because the people running the business just wanted to have the business there. It was in a good spot, and it was just a business expense.

Sue  21:11

And you don’t really know what people in your apartment building are doing. I mean, we just had a police raid on our apartment building the other day,

Jimmy  21:18

Yes,

Sue  21:18

And people were supplying drugs from the apartment, allegedly. So they were obviously having lots of visitors coming in to pick up their supplies, and they were crossing over common property,

Jimmy  21:30

Yes,

Sue  21:31

And in the past, there have been known to have been sex workers in various buildings where we’ve lived, yes, who have lots of customers come in. And so, yeah, you just can’t guarantee what people are doing in the security and the privacy of their own homes.

21:44

What about if it’s a sex worker who’s visiting? Oh, that too, yeah, or a food delivery person?

Sue  21:51

Oh, whoa, everywhere has food delivery people now,

Jimmy  21:53

Yeah,

Sue  21:54

Yeah, wow.

Jimmy  21:55

I remember years ago, we had friends and they complained about their neighbors next door, their dogs would start barking at midnight, and then half past midnight, and then one o’clock in the morning. And they complained, and the people with the dog said, “Well, it’s not us. It’s a guy next door. He keeps having people come to his door like all through the night, and the dogs are barking at that.” And they said, “Oh, the guy next door is obviously a drug dealer”, so the building manager confronted him, and the guy said, “How dare you I’m a private detective. These are my operatives who have to work under cover of darkness.” He moved out. Eventually he realized that the next call the building manager would make would be to the cops, and the game was up. Yeah. So the message we got from the strata managers, the strata choice, people we were talking to yesterday was it will take something to happen to somebody and to go to court before it’s established that Airbnb, or whatever, is a commercial enterprise that has to have workplace health and safety. As far as strata schemes are concerned, you have to decide, do you want to take the chance of being the strata scheme  that’s the first one. That is the test case.

Sue  23:13

Sure.

23:16

And finally, just a little thing. Last week on my newsletter, I suggested that people could hug their strata managers, asking their permission first, of course, but I just felt that we we knock strata managers quite a lot, especially recently, with the whole Netstrata scandal, and you know, the rumors that we’re hearing that Strata Community Association, SCA, are just kind of closing ranks now, and there probably won’t be any fundamental change. That’s somebody on the inside has said SCA, right now is not interested in fundamental change. They want to get back to the point where they are protecting strata managers. So anyway, we do tend to take a pop at Strata managers. And we know there are some really good ones out there. We know them personally. We hear from other people. So I have said, Let’s have “hug a strata manager day.”

Sue  24:12

If they’re a nice strata manager,

Jimmy  24:13

If, well, you don’t want to be hugging nasty strata managers. So what I’m doing, in reality, is in the forum, I’m inviting people to send us commendations for their strata managers, why they love them and how good they are,

Sue  24:27

Fantastic.

Jimmy  24:28

So I’ve had a flood of two responses, but there will be more, especially after people here and read this. So that’s something nice and positive,

Sue  24:40

Absolutely.

Jimmy  24:41

Put on the website, all right,

Sue  24:43

It must be a tough job. And the people out there doing it,

Jimmy  24:46

You wouldn’t do it. Would you for quids? You would not do it?

Sue  24:49

No, not really. It would be, it would be really hard, all those personalities, all those conflict, it’s really difficult.

Jimmy  24:56

I mean, this is where we’re talking about the. The Bannerman’s Handbook on strata committees. I mean my experience of having to deal with our investment property, most of the people in there are retired. Most of them have been successful in their business or whatever. Many of them can tell when things are right and when things are wrong and want things to be done properly, but they don’t know what properly means. For instance, you know, the very basic thing, they turn up at a strata committee meeting online and they start wanting to ask questions, and you it’s very reluctant to say to them, you’re not allowed to speak. Yeah, but you know, people have to learn, and this is where the conflict comes from, and it’s always the strata manager who’s in the nexus there between the committee and the owners and knowing what’s right. And often the committee doesn’t know what’s right, and they’re the people who cop it in the neck so yes, I would not that is not going to be my next career, right? Sue. Thank you again for coming in and your words of wisdom.

Sue  26:02

Pleasure, Jimmy,

Jimmy  26:03

Do you know that when we do the transcript on otter, it analyzes how much each of us has been speaking?

Sue  26:11

Oh right,

Jimmy  26:12

You have yet to get 50% I don’t think you’ve even got to 40%

Sue  26:18

Really, that’s because…

Jimmy  26:19

That’s because I talk too much, yes, but we’ll try. And we’ll try and because you’ve been told that you have a lovely voice recently,

Sue  26:26

I have been told that

Jimmy  26:27

When you were doing your readers Festival in Kiama last week, they said you had a lovely voice. That’s very nice. So we are going to hear more from Sue in the future. Woo hoo. Thank you again. Thank you for bringing your lovely voice to the podcast, and thank you all for listening. We’ll talk to you again soon.

Sue  26:47

Bye,

Jimmy  26:47

Bye.

Jimmy  26:49

Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website, 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, 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 you