Fair Rents Bill

Progress, Volume XI, Issue 6, 1 February 1916, Page 542

Fair Rents Bill

■PROVISIONS OF NEW SOUTH WALES ACT A Fair Rents Bill came into force on January Ist in New South "Wales, The Courts constituted under the Act, consisting of a special stipendiary police magistrate, will have power to determine the rental of any dwelling-house where it does not exceed £156 per annum, that is £3 per week. Before the Court can act, of course, application by the tenant has to be made, and the decision of the Court will be final, no appeal being allowed. The Bench will be empowered to fix the rent for a period of from six months to three years, on "conditions prescribed by the Act, and the new law affords protection against what is known as victimization of a tenant seeking the jurisdiction of the Court.

The capital value of the house in question is to be first fixed. The mode of determining the capital value is by taking the unimproved value of the land, added to the amount it would take to erect a similar structure, less depreciation. The rental value that will be allowed on this basis is not less than the Commonwealth Bank of Australia rate of interest and the Court will then have a margin over and above this rate of interest to the extent of 2| per cent. This total percentage is to be clear, the landlord being allowed deductions for rates, taxes, repairs, renewals, painting, and so forth. There is a provision in the Act that a tenant who applies to have his rent fixed cannot be turned out for a period of three months, except the landlord is able to show reasonable excuse. During the remainder of the three years the landlord is debarred from letting the house at more than the declared rental. The procedure before the Rents Court will be the same as in the Supreme Court that is to say, parties may be represented by solicitor or barrister. The Court is given the right to order the rent to operate at any time it thinks fit, between the date of application and the date of determination.

The Act will not automatically apply to the whole State, but only within districts to be proclaimed. A registrar of each Court is to be appointed. Regarding the application of the Act, it is provided:—

"This Act shall apply to any dwelling-house which is subject to a lease made before or after the commencement of this Act, for any term not exceeding three years, at a rent not exceeding one hundred and fifty-six pounds a year, or a proportionate sum for a less period, or which at any time during a period of six months before the passing of this Act has been let at a rent not exceeding the above-mentioned amount; provided that nothing herein contained shall apply to dwelling-houses ordinarily leased for summer residence."

The method of determination is set out as follows

(1) In determining the fair rent the Court shall first ascertain the capital' value of the dwellinghouse. Such capital value shall be the unimproved value of the land, being the capital sum which the

fee simple of the land might be expected to realize if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that the improvements (if any) thereon or appertaining thereto had not been made; plus the estimated cost of erecting a similar dwelling-house thereon at the time of the receipt of such application, less such fair and reasonable sum as may be estimated for any depreciation.

The Court shall determine the fair rent at a rate of not less than the rate of interest which is for the time being charged upon overdrafts by the Commonwealth Bank of Australia, and not more than two" and a half per centum above such last-mentioned rate on the capital value of the dwelling-house determined as aforesaid, plus the annual rates and taxes on the same, plus the amount estimated to be required annually for repairs (including painting), maintenance, and renewal, and plus insurance of any buildings, and plus an amount estimated to be the annual depreciation in value of the building, if such depreciation diminishes their letting value, and plus such amount (if any) as the Court may deem proper to be allowed for the estimated time per year when the dwelling-house may be untenanted, Furnished dwelling-houses arc dealt with in section twelve:—

"In any case where the applicant is the lessee of a dwelling-house and furniture, the Court shall determine the fair rent of the dwelling-house irrespective of the furniture, and shall also determine in its discretion the amount of rent to be paid for the furniture."