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In-Depth: Onerous and unfair lease terms

If you’ve ever had the unfortunate luck of getting caught without an umbrella in a sudden Victorian downpour, you might have decided to leave your soaking wet coat on your balcony to dry a bit instead of dripping water throughout the house.  (Anything to keep water stains off the carpet!)  Let’s pretend for a moment that you rent your home and your tenancy agreement contains a clause banning you from hanging washing on the balcony.  You figure that it’s reasonable to leave your coat out, as it is only going to be there for an hour or two.  Besides, a coat doesn’t count as hanging out the washing, right?

While there is a freedom of contract provision in the Residential Tenancies Act (RTA) that allows landlords and agents to include additional terms outside of the standard form contract, these terms are not always enforceable.  This means that even if your tenancy agreement contains a clause like the above-mentioned, your landlord cannot serve you with a breach of duty notice or evict you if you don’t always comply with that term.

Unfortunately, they could soon be able to evict you if property interest groups have their way.


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The Make Renting Fair campaign is calling on the Victorian Government to reject the proposed enforcement of onerous and unfair lease terms.  The ability to add terms of this nature to a tenancy agreement takes advantage of tenants’ lack of knowledge about their rights.  In many cases, tenants have no idea that some of the terms contained in their tenancy agreements are unenforceable.  It is natural to assume that because something is listed in an official document, it is set in stone.  This coupled with the threatening language used in these terms often misleads tenants into believing that these terms – even if they are inconvenient and unfair – are the norm.

Competition within the rental market also plays a role.  Tenants have very little bargaining power from the commencement of a tenancy because landlords have their pick of the litter.  This gives landlords and agents a sense of freedom to add excessive additional lease terms that suit them.  After all – it’s not too difficult to find a tenant willing to put up with onerous and unfair lease terms when there are 20+ people vying for the one property, particularly if a tenant may be desperate to secure a home because of their age, income, cultural background or health status.

AN IMBALANCE OF POWER

There are a number of genuine concerns surrounding the enforcement of onerous and unfair lease terms.  In an ideal world, tenancy laws would balance the rights of landlords and their tenants so that neither group is disadvantaged.  Giving landlords the ability to enforce additional terms removes this balance and diminishes tenants’ rights by:

Enabling circumvention of existing protections.
The RTA already provides sufficient provisions that give landlords the ability to evict their tenants should a genuine reason arise.  Giving landlords and agents the power to enforce additional terms could easily be used as a ‘loophole’.  For example: A landlord cannot legally evict their tenant if they are annoyed by multiple repair requests, but they could easily find another reason to serve a breach of duty notice and evict their tenant no matter how outrageous if the tenancy agreement contains a number of onerous or unfair lease terms.

Restricting quiet enjoyment.
Some additional terms that are commonly included in tenancy agreements include restrictions on using a washer or dryer inside the house, changing the oil on a car parked on the property or hanging artwork on walls using temporary adhesive hooks.  The reason why terms restricting these activities are not currently part of the standard form contract is because they are generally considered part of the tenants’ right to reasonable use and quiet enjoyment of their rental property.  Enforcing additional terms would punish tenants for doing ordinary things that others take for granted (like hanging your wet coat out on the balcony!).

Giving insurance companies power over tenants’ rights.
Many landlords add clauses in tenancy agreements that restrict certain behaviours based on the terms and conditions of the landlord’s insurance policy.  Enforcing additional terms of this nature essentially gives insurance companies the power to dictate what a tenant does or does not have a right to do in their homes.  This power should be held solely by the bodies that administer tenancy law.

Allowing more monetary claims against tenants.
One of the most common additional terms that are included in tenancy agreements states that tenants must get the rental property’s carpets professionally steam-cleaned at their own expense upon vacating the premises.  Tenants simply assume that this term is enforceable because it’s so commonplace, but current tenancy laws only state that a rental property must be maintained and, therefore, left in a ‘reasonably clean’ condition.  A tenant could reasonably dispute any claim against their bond for failing to steam-clean the carpets.  The proposed enforcement of additional terms would remove this right from the tenants if this clause is part of the tenancy agreement.

SECURITY OF TENURE MUST BE PROTECTED

With more people renting their homes for longer than ever before, it is vital that any changes made to the RTA protect security of tenure.  To do this, Consumer Affairs Victoria has proposed the creation of a ‘blacklist’ of additional lease terms that would be banned from tenancy agreements.  While a list of this nature could be a positive step, the inclusions could be too easily circumvented by landlords and agents.

If the Victorian Government wants to safeguard security of tenure for the state’s over 1.5 million renters, it must not allow tenants to be subject to punishment or eviction for breaching any onerous or unfair lease term.

 

GET INVOLVED! You can help us spread the word about rejecting the proposed enforcement of onerous and unfair lease terms by signing the petition and emailing your local MP in support of the Make Renting Fair campaign.