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Consumer legislation and marginal renters

There are a number of pieces of legislation that modify the common law in relation to ‘consumers’. Depending on the circumstances, a marginal renter may be a ‘consumer’ (that is, a consumer of rental accommodation services), and have some rights and recourse to dispute resolution under the legislation.

The Australian Consumer Law

The Australian Consumer Law is a piece of Federal legislation (Competition and Consumer Act 2010(Cth), Schedule 2) that has been adopted by each State and Territory (for New South Wales, see Fair Trading Act 1987(NSW), section 27). The Australian Consumer Law imposes certain obligations on persons who are in ‘trade or commerce’ and supply goods or services (including rental accommodation services) to consumers.

Whether your landlord is in ‘trade or commerce’ will depend on the circumstances. Most boarding house operators will be in trade or commerce; a person who rents out a room in their own house might not be; a head-tenant in a typical share house probably will not be. You are presumed to be a consumer (section 3(10)); if your landlord disputes that they are in ‘trade or commerce’, the onus is on them to prove it.

The Australian Consumer Law contains numerous provisions that address conduct in relation to consumers and the content of consumer contracts. Table 8.1 identifies a few of the most relevant provisions, and indicates how each might apply to problems in marginal rental. (The application of the Australian Consumer Law to marginal rental is largely untested, so these possible applications – particularly those marked with a question mark (?) – really are just possibilities.)

Table 9.1. The Australian Consumer Law and marginal rental

Provision

Possible application to marginal rental

Misleading or deceptive conduct is prohibited (cl 18)

Remedy where landlord falsely represents that boarding house is operating lawfully

Unconscionable conduct is prohibited (cl 20)

Remedy where landlord attempts to make you share your single room with another occupant?

Remedy where landlord attempts to make you perform work for no reward?

Remedy where landlord assumes control of your finances?

Unfair terms of consumer contracts are void (cl 23)

Penalty terms (for example, for late payment of rent, or breaching house rules, or terminating agreement during semester) may be void

Notice periods that are unfairly short may be void?

Guarantees as to fitness for particular purposes (cl 61)

Remedy where the premises are in a very bad state of repair

Supplier must provide proof of transaction (cl 100)

You are entitled to a receipt

Breaches of the Australian Consumer Law may be investigated and prosecuted by NSW Fair Trading and the Australian Competition and Consumer Commission. You can also apply to a court for a range of remedies, including:

  • Damages (clauses 236-238) – that is, compensation for loss;
  • Pecuniary penalties (clauses 224 and 225) – that is, fines (these apply to breaches of certain provisions only, such as unconscionable conduct, but not guarantees as to fitness (clause 224(1)(a));
  • Injunctions (clause 232) – that is, an order that a person do something, such as refund money or honour a promise (section 232(6)(a) and (c)), or refrain from doing something.

Note that you must apply to a court for these remedies, not the Tribunal.

Your landlord cannot apply for a remedy under the Australian Consumer Law against you.

This is new

The Australian Consumer Law commenced January 2011, replacing various State and Territory-level consumer regimes with a nationally consistent regime.

Consumer Claims under the Fair Trading Act 1987 (NSW)

The Fair Trading Act 1987 (NSW) is relevant to marginal renters in another way: the provision at Part A about ‘consumer claims’. These provisions do not affect the content of a contract, but do allow ‘consumers’ to apply to the Consumer and Commercial Division of the Tribunal for remedies.

This is new

Prior to 2015, the consumer claims provisions of the Fair Trading Act 1987 were in a separate piece of legislation, the Consumer Claims Act 1998 (NSW).

A marginal renter may be a consumer if their landlord supplies rental accommodation services in the course of carrying on ‘a business’ (section 79D). Like the ‘trade or commerce’ requirement in the Australian Consumer Law, the requirement that the landlord be carrying on ‘a business’ means most boarding house operators could be subject to a consumer claim; but a person who rents out a spare room in their own home might not be; and a head-tenant in a typical share house probably will not be. You are presumed to be a consumer (section 79H); if your landlord disputes that they are ‘in business’, the onus is on them to prove it.

A consumer claim may be a claim for:

  • Payment of a specified sum of money (section 79E(1)(a)) – for example, compensation for a breach, or the return of your bond;
  • The supply of specified services (section 79E(1)(b));
  • Relief from payment of a specified sum of money (section 79E(1)(c)); or
  • Delivery, return or replacement of specified goods (section 79E(1)(d)) – for example, your own goods left behind after termination.

Consumer claims may relate to a breach of contract (including breach of guarantees provided by the Australian Consumer Law), but can also be made in relation to problems that do not necessarily involve a breach: in particular, unconscionable conduct by a landlord.

When it deals with a consumer claim, the Tribunal must consider the range of factors at section 79U (these factors are mostly concerned with inequalities between the parties), and make orders that are fair and equitable to all the parties (section 79U(1)).

Your landlord cannot apply for a remedy under the consumer claims provisions against you.