Submission: Draft standard form occupancy agreement for general boarding houses

The Tenants' Union of NSW supports the draft standard form occupancy agreement for general boarding houses (the draft standard form). Subject to three qualifications discussed below, it is a practical, balanced agreement that is consistent with the occupancy principles set out in the Boarding Houses Act 2012 (BH Act).

We submit that consideration should be given, after an initial period of voluntary use and monitoring by NSW Fair Trading, to making use of the standard form mandatory per s 29(4) of the BH Act.

Recommendation

After an initial period of voluntary use and mentoring, consider making use of the standard form mandatory.

We also submit that a standard form occupancy agreement for assisted boarding houses should be approved. It should be based on the draft standard form (subject to the discussion and recommendations below) with additional terms that reflect the requirements and standards of the Boarding Houses Regulation 2013 (the BH Regulation, currently in draft form). This would mean that those requirements and standards, which are enforceable by NSW Ageing, Disability and Home Care as statutory obligations, could also be enforced by residents as contractual obligations. This would strengthen the program of reform that the BH Act represents.

Recommendation

Issue a standard form occupancy agreement for assisted boarding houses, with additional terms reflecting the relevant provisions of the BH ACT and BH Regulation.

Utility charges (cl 7)

This clause provides:

The proprietor may charge an additional amount for utilities if the resident is made aware of the charge on signing this agreement AND the resident has been informed as to how the charge will be calculated.

We submit that the occupancy agreement is the place to do both these things: that is, making the resident aware that there will be a charge, and informing the resident as to how the charge will be calculated. As it is currently drafted, cl 7 does neither. Instead it leaves these things to be done by the proprietor somewhere else: perhaps in an addendum to the agreement, on a notice stuck to a notice board at the premises, or orally.

This has the potential to make the obligations and liabilities of residents and proprietors in relation to utilities unclear, and to generate disputes unnecessarily. Clause 7, like the other clauses of the draft standard form, should be drafted as a term that is as nearly complete as possible. It should require a minimum of additional drafting by the proprietor: an indication whether a charge applies (perhaps in either a ‘yes/no’ or ‘tick box’ format), and a statement of method (for example: ‘coin-operated’).

Recommendation

Insert a table or list to the following effect after the text in the current cl 7.

Termination by the proprietor – ‘vacant possession required’ (cl 9)

The table headed ‘Reason for Termination by Proprietor’ provides for the following ‘reason’:

Vacant possession is required, for example because the premises have been sold or require renovation or demolition or there is to be a change in the use of the premises

We submit that ‘vacant possession is required’ is not really a ‘reason’ for termination; it is really just a way of stating that the proprietor seeks to terminate the occupancy. By itself, ‘vacant possession is required’ is no more a reason than is ‘I want you to move out’, the only difference being that it is phrased in the passive voice. It begs the question: why is vacant possession required?

Each of the examples given – that the premises have been sold, or require renovation or demolition, or there is to be a change in the use of the premises – is a reason, but as the provision is currently drafted, they are cited merely as examples, and there could be some other unstated reason as to why vacant possession is required.

This is a defect in the provision, because an occupancy agreement that provides for termination by a proprietor without a reason is inconsistent with occupancy principle 9, which amongst others things provides that ‘a resident is entitled to know why… the occupancy may be terminated’. ‘Vacant possession is required’, without a further specific reason, does not allow a resident to know why the occupancy is being terminated.

Provision should be made for termination for each of the reasons currently given as mere examples. This would be consistent with occupancy principle 9.

Recommendation

Delete ‘for example’ and the preceding comma.

Termination by the proprietor – ‘no grounds’(cl 9)

The table headed ‘Reason for Termination by Proprietor’ provides for the following ‘reason’ and suggested notice period:

The provision for a ‘no grounds’ termination notice is inconsistent with occupancy principle 9, which provides that ‘a resident is entitled to know why… the occupancy may be terminated’. ‘No grounds’ does not allow a resident to know why the occupancy is being terminated.

Provision could be made in an occupancy agreement for termination for a reason not specified in the occupancy agreement, provided that the reason is specified in the termination notice. We submit that this would be consistent with occupancy principle 9.

Recommendation

Delete ‘No grounds/’, so that the provision is for ‘Any other reason (as stated in the termination notice)’.

In relation to the suggested period of notice, we note that the period – four weeks – is the same as that for a termination notice for the reason that vacant possession is required because the premises have been sold, or require renovation or demolition, or there is to be a change in the use of the premises. We submit that those reasons will generally be more compelling than ‘Any other reasons’, and so a longer notice period is appropriate for the latter.

Recommendation

Amend the suggested notice period to ‘8 weeks’.