Thursday, June 11, 2015

Landlords... finally some hope!

There is a new judicial system - and feedback seems to be counting! The new system replaces the Residential Tenancies Tribunal and is called the South Australian Civil and Administrative Tribunal, or to all of us, simply SACAT.

SACAT have been quite responsive and common sense seems to be getting traction. However, investors and property management agencies are still wading through the unknown as this new judicial SACAT body was only introduced on 30 March 2015.

SACAT now handles matters that were previously in the Residential Tenancies Tribunal, including bond claim disputes and the resolution of various tenancy breaches.

There has been a lot of third hand information about the new SACAT system, so here's my overview on some of the changes and what we are experiencing first hand.

Technology updated. The IT capabilities have improved and there is now the ability to lodge applications online, automatically list orders for vacant possession due to unpaid rent, video conferencing and use of email and SMS for hearing notices. As well as additional facilitates on site. This is great news!

But it is still in transition.

Costs. A fundamental change to tribunal costs affecting investors has recently been reversed. Under the first reforms with SACAT, if you wanted to claim against your tenant's bond, and they either didn't respond or there was a dispute, you had to make an application to tribunal to claim against the bond for a $69 fee. This was not refundable. So in the event that you 'won', landlords still had to cough up the $69.

This had serious practical implications. A common item, such as a claim for additional cleaning ($150) ended up in the tribunal if the tenant didn't get back to you in ten days or if they disputed it. This left very little (if any) money in the landlord's back pocket after the $69 application fee and standard costs to your property management agency (to prepare all the documentations to prove your claim). It simply wasn't worth it.

All credit to SACAT - they took on board industry feedback and this new process was reversed in late May. 

Transition issues. SACAT is getting up to speed, however I still have concerns over what the effect will be for investors who are caught in this transition stage with substantial claims. 'Urgent' hearings are now taking almost twice as long (up to three months) to obtain, which means the risks are high for investors. 

Speed and prior knowledge is what appears to be stalling things. 

Classic frustrating transitional example. A matter we currently have on the go was first heard in the Residential Tenancies Tribunal (pre SACAT) and an order was granted in favour of our landlord (for a significant amount of money). An application was subsequently lodged by the tenant to overturn this order but this was denied.  

We were then asked earlier this month to appear in front of SACAT as the tenant appealed (again). Our landlord is now waiting for the final verdict under SACAT. It has been four and a half months.

From our recent experience with this matter, no one really knows what to expect, including SACAT. They had no transcript of the original hearing or the previous order, no documentation and our property manager was handing over HER highlighted and flagged document copies to ensure all parties were aware of the background and facts. Our team spent a huge amount of time preparing for the hearing (as we would ordinarily do for such an important event) and now the matter has been adjourned as the member didn't have the information required to make a decision at the hearing. 

Based on the recent changes in May, SACAT are looking to make things more fair and equitable for investors in South Australia. 

We are currently navigating through the changes and are looking forward to when the new SACAT is bedded in.

So, investors bear with us. We will continue to go into bat for landlords with the hope that common sense and fairness will prevail. 

If you have been caught in transition like our landlord has and you have any suggestions or feedback (even if we don't manage your properties), let us know. Maybe we can make a difference. 

Suzannah Toop

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