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Legislative Assembly for the ACT: 2000 Week 6 Hansard (24 May) . . Page.. 1628 ..

MR RUGENDYKE (continuing):

I am particularly worried about the ramifications of this environment for the future of the genuine, independent, small business owners in the ACT. With large shopping malls having a preference to place national franchises with a national identity in their shops, the independent local retailer gets squeezed out and does not receive any support under the current arrangements. This bill proposes to eliminate this problem by introducing a minimum five-year lease with an option for the tenant to renew.

If an owner proposes to re-lease the premises and the existing tenant wants to renew or extend the term of the lease, the owner must give preference to the existing tenant over other possible tenants. The owner must also commence negotiations between six and 12 months before the end of the term of the lease. These measures will help protect the goodwill of tenants.

Consider this hypothetical situation: a tenant owns a supermarket in a suburb and the goodwill of the business is worth $200,000. Rent payable to the landlord is $100,000 per year. The time for lease renewal arrives and market rental is assessed at $100,000 per annum. The landlord refuses to renew the lease, and instead gives the lease to the landlord's mate. The rent charged is $120,000 per annum for five years. So, in summary, the landlord gets an extra $100,000 over five years, the mate gets $200,000 worth of goodwill for $100,000, and the former tenant loses the $200,000 business. This bill will enable the tribunal to identify harsh and oppressive behaviour by the landlord against the former tenant, and will protect the tenant against this type of behaviour or other similar scams.

This bill also includes clear guidelines and criteria for the termination of a lease and sets out clear responsibilities for both tenants and landlords. For example, I do not propose an unconditional option for tenants. Tenants will still have to meet all of their obligations under their lease and, if they fail to do so, their leases may be terminated in certain circumstances. The bill incorporates and maintains the present role of the Tenancy Tribunal. However, it does give parties to disputes easier access to the tribunal. It also recognises the existing code of practice under the Tenancy Tribunal Act.

Presently the registrar of the tribunal must follow a series of processes before a dispute can be heard by the tribunal. It is not uncommon for these dispute applications to be tied up for long periods in this regimented process, sometimes for months on end. This bill gives the registrar a series of options for responding to cases. They range from seeking information to resolve the dispute to referring the dispute to a mediator or a conference and, in clear-cut cases, referring the dispute immediately to the tribunal for hearing. In the case of a failed mediation, the registrar must refer the matter to the tribunal automatically.

Among other rights, this bill provides for tenants to have legal or other representation at conferences or tribunal hearings. If this bill is adopted, the tribunal will be able to grant an appropriate interim order if it is satisfied that the person applying, whether landlord or tenant, would suffer if it was not granted.

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