Three strikes evictions a swing and a miss

Western Australia’s proposed overhaul of rental laws has sparked debate over whether landlords will have sufficient tools to deal with difficult tenancies, with the Real Estate Institute of Western Australia (REIWA) calling for significant changes to the State Government's proposed “three strikes” provisions.

The reforms to the Residential Tenancies Act (RTA) would remove “no grounds” terminations and instead allow landlords or tenants to apply to the Magistrates Court to end a tenancy after three serious breaches of the same provision within a 12-month period.

Explaining the changes, the Department of Consumer Protection said tenants would no longer be asked to leave “just because” a landlord did not want to renew a tenancy agreement, describing the reforms as providing greater security for renters.

REIWA, however, argues the characterisation oversimplifies how no-grounds terminations are used in practice.

In its submission to the consultation process, the institute said such notices are typically issued after a pattern of issues has developed over time, including repeated rent arrears, property damage, antisocial behaviour or other ongoing tenancy problems.

The institute said it broadly supports introducing a repeated-breaches mechanism but believes the proposed model should be expanded to better deal with persistent problem behaviour while avoiding unnecessary court action.

The real reasons landlords end leases

REIWA remains opposed to the removal of no grounds terminations. A no grounds termination is not used “just because” a lessor doesn’t want to renew an agreement. It is used to end tenancies where there has been build-up of issues over time, such as repeated rent arrears, property damage, antisocial behaviour and illegal activity.

As part of REIWA’s research provided as a response to the state government, they asked its members why they typically chose to end periodic tenancies or not renew fixed-term leases. There were 549 responses and the reasons provided were not arbitrary.

They included:

• repeated rent arrears (86 per cent)
• repeated issues over a period of time (other than rent arrears, 75 per cent)
• improper maintenance/cleanliness (63 per cent)
• property damage (63 per cent)
• antisocial behaviour (53 per cent)
• threats/safety concerns (e.g. to a property manager, neighbours, contractors, 49 per cent)
• drug use or other illegal behaviour (46 per cent)
• breach of strata by-laws (34 per cent).

The RTA reforms propose a range of grounds the government considers acceptable. One of these includes termination for repeated breaches.

The RTA will be amended to include a mechanism for dealing with repeated breaches of a rental agreement by a lessor or tenant.

It is proposed that the lessor or tenant can apply to the Court to terminate the agreement after three serious breaches of the same provision in a 12-month period. The Magistrates Court may consider a number of factors before making a possession order including the impact of termination on the tenant and the impact of the breaches on the lessor, other residents and neighbours.

A “serious breach” in relation to a tenant’s conduct may include things like:

• the tenant’s conduct at or on premises (e.g. nuisance); or
• non-compliance with a provision of a body corporate by-law; or
• threats to agents, lessors or neighbours.

REIWA broadly supports repeated breaches as an acceptable ground for termination.

This will cover issues that are not appropriately addressed by legislation and are instead currently addressed via a no grounds termination, however, we have recommended a number of changes to this ground.

Firstly, the ground shouldn’t be limited to three breaches of the same type.

It doesn’t make sense that a person could engage in nuisance twice, break strata by-laws twice, and threaten agents, lessors or neighbours twice, and still not have their lease terminated. A total of three breaches over a 12-month period, made up of any combination of the items listed as “serious breaches”, should be a ground for termination.

REIWA also believes a three-strikes system should not automatically require a court order, provided that instances of breaches are appropriately documented, communicated to the tenant, and neither party disputes the material facts.

Secondly, the ground for repeated breaches should be expanded to include non-payment of rent, late payment of rent and non-payment of utilities.

Consistent late payment of rent was raised by REIWA members as an area where property managers lacked adequate grounds to terminate a lease, particularly in situations where tenants were consistently in arrears but only paid once a breach notice was issued.

Thirdly, we believe the definition of a serious breach should also include a failure to adequately care for the premises, intentional property damage, and a failure to report damage not caused by the tenant that requires immediate and urgent repair.

Threatening behaviour

Finally, we strongly believe the last “serious breach” on the list – threats to agents, lessors or neighbours – needs to be clarified in terms of where it sits in the legislation, expanded in regard to whom who it covers, and broadened to include any form of harassment, intimidation, threat or illegal behaviour.

In the consultation paper, a tenant threatening the lessor or property manager is listed as a ground for termination, however, threats to agents, lessors and neighbours are listed as a “serious breach”.

It does not make sense that threatening the lessor or property manager could be grounds for termination in its own right but a tenant can threaten the neighbours three times before termination can be considered.

We recommend it be removed from the repeated serious breaches ground and be a ground for termination in its own right.

This ground should be expanded to include behaviour directed at agents, lessors, neighbours, contractors, and anyone else who is required to attend to the premises in the course of the tenancy.

It should also go beyond just threats and include any form of harassment, intimidation, threats, or illegal behaviour. In addition, this should apply to the tenant’s visitors and associates.

Consultation on the reforms continues.

It must be noted that the need to repeatedly breach tenants in order to manage a tenancy that might not work at some point, is going to make the system a lot more complicated, costly and adversarial. No grounds terminations were simpler for everyone and, in many ways, kinder for tenants.