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‘No grounds’ evictions are unfair

21st Apr 2022

When NSW tenancy law was under review (2015–2020) the NSW Government refused to remove ‘no grounds’ provisions, despite the Minister for Better Regulation publicly acknowledging the lack of security renters face:

‘No grounds evictions, retaliatory evictions … these things are currently undermining renters' rights in NSW.’[i]

The Victorian Government claims to have ended no grounds evictions, but still allows ‘end of fixed term’ notices. However, this is the jurisdiction closest to getting rid of them – only allowing a tenancy to be ended as such at the end of the first fixed term. This in fact creates an incentive for landlords to increase the churn of tenancies in order to ensure they always maintain control over the premises.

Tasmania sometimes claims to have ended no grounds evictions, but actually they only limit them to the end of fixed terms, as per s42(1)(d) of the Residential Tenancy Act 1997 (NSW). They have had this system since the Act came into effect, and now around 84% of renters in Tasmania are on fixed term agreements, preserving the ability of landlords to end agreements every 6 to 12 months. This is the system the Queensland Government has chosen to implement. The most obvious outcome is that this will drive more landlords to maintain rolling fixed terms as in Tasmania.

The ACT Government is also currently reviewing tenancy laws in order to 'reform and modernise' them, and looking at ending no grounds evictions (called 'no cause' evictions in the ACT). However, so far, they also seem to be misunderstanding end of fixed term evictions as separate from no grounds evictions. Their Consultation Paper suggests, for example, keeping 'end of a fixed term tenancy' in the same way Queensland has.[ii]

What is eviction?

Eviction can be understood as any instance where a landlord makes it known that they are exercising a power (whether lawfully or not) that will eventually lead to the tenant being dispossessed of the premises.

No fault evictions happen without any breach by the tenant. These can be divided into two categories – with and without grounds. Grounds here should be understood as a circumstance leading to the premises no longer being available for occupation by a tenant (note, not the tenant – any tenant). Some grounds are reasonable; some are not.

A landlord being able to end a tenancy without a reason is bad public policy. It undermines tenants' abilities to establish their homes with any certainty. Landlords tend to serve the no grounds notice in one of three circumstances: where they have a good reason that the law does not accommodate, where they have another legislated reason but would rather not be put to the trouble of proving it, or where they have a questionable reason that they'd rather not have examined.

There is always a reason – the reason may be one of the above grounds, or it might be that the landlord wants to increase the rent and believes that will be easier with a new tenant. Or the reason may be that the landlord would prefer a tenant who doesn’t keep asking when the roof will be fixed.

Some people defend no grounds provisions by claiming that contracts have to have an end date and that both parties should expect at that time to end the relationship. This is a limited understanding of contracts and tenancy.

A fixed term tenancy agreement establishes a contractual relationship between the parties (tenant and landlord). Under the agreement the tenant receives a service (the provision of housing) from the landlord for a fee (rent). Once this period ends, the agreement still continues – whether a new fixed term agreement is entered into or not. The terms may have changed, but the contractual relationship still exists.

The idea that at the end of a fixed term it is reasonable to assume that the agreement will end, or that this is a 'reason' it should end, is perhaps a hangover from earlier regulation of residential tenancies through common law and land law, and the continued 'dual nature of a lease'. That is, ‘a lease is both a contract between parties and an estate in land’.[iii] In the regulation of residential tenancies, modern residential tenancies law (consumer law) travels in tandem with an 'estate in land' (land law). And perhaps this is a root of the muddle.

It's probably most useful to just consider whether it seems sensible or fair that a landlord can evict a tenant simply because the 'fixed term' has ended but the premises remains available for rent. Is this really a reasonable ground? It allows all of the same problems of no grounds notices used during a periodic tenancy: retaliation, discrimination and continuing uncertainty for tenants.

An old issue

This is exactly why the Hon Ronald Sackville (now of the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability) wrote in his 1976 report on Law and Poverty clear recommendations against no grounds evictions in both fixed and periodic agreements. The report recommended most of the modernising elements we see in the Residential Tenancies Acts around the country, like minimum property standards, limits on rent increases, and recourse to tribunals. It made the point that many of those recommendations would have no effect if the ability to end the tenancy without grounds were to continue in either periodic or at the end of fixed term agreements, because ‘a tenant is hardly likely to insist on the full measure of his legal entitlement if the price of his actions is eviction from the premises.’[iv]

Sackville recognised that no grounds evictions have an invisible rather than explicit use. A landlord may never actually serve a no grounds notice. They may never even recognise their usage in this way, or the power it gives them. This is partly why some find it so challenging to consider in law reform. The real power of the no grounds notice is its usefulness in keeping tenants from raising issues at all.

Sackville recommended these grounds:

• rent arrears, other breaches or illegal conduct;
• the tenant serving their own notice but then not moving;
• the landlord or their immediate family moving in, or demolishing and reconstruction; or
• the landlord having sold the premises to another owner occupier who requires possession (which is really the same as the landlord moving in).

That's it. That's the list. These grounds fit neatly within the conception that while the premises remain available to rent, the sitting tenant should be able to assume they are staying unless they have breached the contract. Strangely, of the 37 recommendations Sackville made, this is the only one that still hasn't been implemented in any state or territory. Internationally we are also being increasingly isolated in our views, with the Conservative Party in the UK, and Labour in New Zealand (the last two Commonwealth OECD countries maintaining these rules) both committing to bringing them to an end.

Addressing the continuing lack of security renters face requires removing the ability for landlords to end tenancies without genuine reason that the premises are no longer available to rent. This means removing no grounds termination provisions from tenancy law, including provisions allowing such an eviction simply because the fixed term of an agreement has come to its end.

This is an edited version of an article first published by The Tenants Union of NSW.

 

The ALA would like to thank Leo Patterson Ross for this contribution.

Leo Patterson Ross is CEO of the Tenants' Union of NSW. He has worked in housing justice and community development for 15 years – assisting renters, their advocates and the broader public to understand and navigate the housing system. He has a strong media profile speaking to the experience of renters in NSW.

 

 

The views and opinions expressed in this article are the author's and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).

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Tags: Tenancy Eviction Leo Patterson Ross