Renters must pay for their own evictions

SYDNEY renters have plenty to gripe about. Not only are their rents soaring but they are also funding the legal machinery used by landlords to evict them.

The Consumer, Trader and Tenancy Tribunal is among a number of government services sponsored by interest payments from rental bonds lodged by tenants.

But tenants rarely use the tribunal to complain about lax landlords or unfair rent rises. The tribunal mostly deals with landlords' appeals to have rental contracts torn up, and these appeals are up by about 5 per cent from the same period last year.

Of the 14,400 appeals in the three months to March, there were only 130 relating to excessive rent rises, compared with 7900 relating to "termination."

"We think rental bond money should be put to purposes that advantage tenants collectively," said the policy officer for the Tenants Union of NSW, Chris Martin. "The cost of the administration of justice should be borne by the community generally, not by tenants."

As Sydney rents and interest rates have soared, the NSW Government has enjoyed a growing windfall from bonds lodged with the Rental Bond Board when renters move. Barely any of the money is paid back to tenants when they leave the property and reclaim the bond.

The board pays the same interest rate to tenants as a Commonwealth Bank Streamline account: 0.01 per cent. But with interest rates on fixed-income investments about 9 per cent, the board's own surplus is ballooning.

Last financial year, the board earned $42.5 million after investing $680 million from rental bonds. The tribunal is just one of the tenancy-related services it spends the money on.

Last year the board paid $30 million to the State Government's affordable housing program as part of a two-year, $40-million investment.

Part of the money was spent on 70 new rental properties for low- and moderate-income earners on the old Australian Defence Industries site at St Marys.

Mr Martin said it was "a little disappointing that this Government, which has not done enough on affordable housing policy … has tapped tenants".

The majority of applications for termination made in the tribunal do not result in evictions.

The tribunal's deputy chairwoman for registry and administration, Elizabeth Tydd, said that even though it was mainly used by landlords, it was nevertheless an important protection for renters.

Mr Martin, whose organisation is also partly funded by the board, nevertheless called for interest earned on rental bonds to be returned to tenants.

The number of new bonds lodged has been falling as tenants ride out rising rents by staying put. Inner-city tenants have been particularly inclined to settle, with the number of bonds lodged in areas such as Woollahra, Waverley, Leichhardt and Ashfield dropping almost 15 per cent since 2003. The Government has said it was planning to stop paying the 0.01 per cent interest on bond money, which amounts to just $80,000 a year on the $650 million it holds.