Private Rental Incentives Fact Sheet

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Private Rental Incentives (Pilot Program)

Fact Sheet

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Overview

Private Rental Incentives is a housing assistance initiative funded under Tasmania’s Affordable Housing Action Plan 2015-2019 and administered by Housing Tasmania. The initiative provides eligible low income households with low or no support needs access to secure private rental homes (with 12 month leases) at an affordable maximum rent.

The initiative is designed to encourage property owners to make their private rental homes available and affordable for low income households. It will increase choice in the private rental market for low income households.

Private Rental Incentives is a partnership between the Tasmanian Government, registered Community Housing Providers, Housing Connect, and the private rental sector. The pilot initiative is currently funded until June 2019.

Dedicated Private Rental Consultants located in the North and South of the State will work with Community Housing Providers, real estate agents and private landlords to find Suitable Properties for the initiative. Community Housing Providers will enter into a head lease and a payment agreement with property owners to provide secure lease terms for low income households.

For each approved property, property owners will receive a financial incentive payment and guaranteed rent. Low income households will be provided with a suitable, secure private rental home at an affordable maximum rent.

Suitable Applicants will be invited to participate and can apply at Housing Connect from 29 May 2018.

Initial selection of Suitable Properties will commence before that date. Application forms are now available for property owners (or agents) online: www.dhhs.tas.gov.au/housing.privaterentals.

Steps will be taken through this program to ensure existing tenants are not displaced and choice in the private rental market for low income Tasmanian’s is increased.

Approved properties must meet the demands of the social housing tenant profile in terms of affordability, property type, size and location.

Applicant/Tenant eligibility

Suitable Applicants will be:

  • 18 years or older
  • Able to afford the rent and meet income thresholds
  • Able to live independently (with little to no support); and
  • Able to look after the property

If an applicant has lived in social housing before their tenancy history may be reviewed to help make the decision about whether the program is suitable for them or not.

Private Rental Incentives

Property owners (or their agents) with approved Suitable Properties will enter into a head lease and a payment agreement with a Community Housing Provider.

The head lease will provide the following benefits for property owners:

  • Experienced tenancy managers by Tasmanian Government registered Community Housing Providers – managed in accordance with the Residential Tenancy Act 1997.
  • Regular property inspections to confirm that tenants are acting in accordance with their obligations.
  • Guaranteed rent for 12 months from the commencement of a tenant entering into a residential tenancy agreement with a Community Housing Provider.

The payment agreement will enable disbursement of a financial incentive of $10 000 (North and North West) or $13 000 (South) per property, per annum, to be paid quarterly in advance (or more frequently if agreed by the Community Housing Provider).

Roles and Responsibilities

Housing Tasmania will:

  • Have oversight of the administration of the initiative including authorisation of suitable properties, monitoring, and reporting.
  • Engage Private Rental Consultants to promote the initiative, liaise with the real estate industry and Community Housing Providers, and to identify and secure properties from the private rental market.
  • Develop a media campaign to promote participation in the initiative by property owners and agents.
  • Facilitate the transition of the Private Rental Consultant function from Housing Tasmania to Housing Connect if the pilot is successful and continues beyond June 2019.
  • Provide a Private Rental Incentive payment of $10 000 or $13 000 per property for disbursement to property owners via Community Housing Providers.

Property owners (or their agents) will:

  • Submit a Private Rental Incentive Application Form for approval to Housing Tasmania.
  • Provide evidence of current Landlord Insurance for their property (including tenant damage cover).
  • Ensure their property is clean, tidy and fit for initial occupancy.
  • Enter into a head lease with a Community Housing Provider that takes effect for a 12 month term from the date that the Community Housing Provider enters into a residential tenancy agreement with the tenant.
  • Will not require bond payment by the Community Housing Provider as part of their head lease.
  • Enter into a payment agreement to receive quarterly Private Rental Incentive payments (or more frequently if agreed by the Community Housing Provider) under the head lease. Payments will be subject to continued eligibility requirements (see Suitable Properties for more details).
  • Prescribe and receive rent from the tenant via the Community Housing Provider that does not exceed the maximum rent.
  • Be responsible for the payment of council rates, maintenance repairs (excluding fair wear and tear) or improvements and all other property owner obligations as per the Residential Tenancy Act 1997.
  • Liaise with Community Housing Providers regarding tenancy and property management.

Real Estate Agents may also:

  • Promote the initiative to property owners.
  • Refer suitable property owners to the Private Rental Consultants.

Community Housing Providers will:

  • Inspect and confirm that a property is clean, tidy and fit for initial occupancy.
  • On acceptance of a property and after sighting the required insurance documentation, enter into a head lease and payment agreement with the property owner (or agent).
  • Allocate properties to Suitable Applicants off the Housing Register and enter into a residential tenancy agreement with the occupant for a term of 12 months (fixed term for pilot period).
  • Provide tenancy management services in accordance with the Residential Tenancy Act 1997.
  • Collect rent from tenants and disburse rent payments to property owners or their agents.
  • Manage any vacancies that occur during the term of the lease and meet the costs of any rental arrears.
  • Be able to call on the bond paid by the tenant under their residential tenancy agreement.
  • Put processes in place to recover costs associated with tenant damage.
  • Administer the Private Rental Incentive payments to property owners or their agents, subject to continued eligibility requirements (see Suitable Properties for details).

Housing Connect will:

  • Provide advice and information on the initiative.
  • Provide intake and assessment services and assess and submit suitable applications using SHIP-Tas.
  • Refer property owners and agent enquiries about the initiative to the Private Rental Consultants.
  • Provide housing support to tenants or applicants, as required.

Tenants will:

  • Be selected from the Housing Register (see Suitable Applicants) by Community Housing Providers.
  • Enter into a residential tenancy agreement with the Community Housing Provider for a term of 12 months (fixed term for pilot period).
  • Pay a bond (and be eligible to apply for Private Rental Assistance from Housing Connect).
  • Pay an affordable rent and be eligible to apply for Commonwealth Rental Assistance (CRA).
  • Pay water and electricity usage (where applicable).
  • Be responsible for any tenant damage to the property.
  • Be required to meet all tenant obligations in accordance with the Residential Tenancy Act 1997.

Suitable Applicants

Suitable Applicants will be low income households with low or no support needs who can afford a private rental property at the prescribed maximum rent.

Suitable Applicants will be 18 years or older and must meet the income eligibility threshold for social housing.

Suitable Applicants will be able to live independently, pay the rent and look after the property.

Applicants will be eligible to apply for Private Rental Assistance.

How tenants can apply

Housing Tasmania has identified applicants on the Housing Register who may be suitable for the initiative. These applicants are assessed as low risk tenants who can afford to maintain a secure lease for no less than 12 months at the prescribed maximum rent (see Suitable Properties).

Housing Tasmania will initially invite Suitable Applicants to apply from 29 May 2018 by contacting Housing Connect and completing the application process. Participation in the initiative will be voluntary.

Over the term of the pilot, Housing Connect will use the new SHIP-Tas application form to register applicants.

Suitable Applicants may be new to the Housing Register or may have an existing social housing application. Multiple applications are acceptable under the initiative.

How tenants will be selected

Community Housing Providers will allocate a tenancy to a Suitable Applicant off the Housing Register to fill a vacant property.

To ensure that the property is affordable, the Community Housing Provider will first check that the rent does not exceed 30 per cent of the applicant’s household income plus CRA.

The Community Housing Provider will also review any tenancy history an applicant has in social housing to ensure they are suited to this program. Issues such as substantial rental arrears or a history of anti-social behaviour and property damage are factors which would make you ineligible for this program.

Where a person has an existing social housing application and is successfully housed under this initiative, their housing needs will be deemed to be met and their social housing application will be cancelled.

Applicants who unreasonably reject a property offered under this initiative (one that meets the preferences they specified in their application) will have their Private Rental Incentives application cancelled. This cancellation will not impact the status of any other social housing applications they have.

Suitable Properties

Suitable Properties will be sourced from the private rental market and must be located in close proximity to services, especially:

  • Health services
  • Public transport
  • Shops/grocery stores (open on weekends)

Properties must also meet minimum standards under the Residential Tenancy Act 1997 and be covered by landlord insurance (evidenced by a certificate of currency which must be provided prior to the payment agreement being signed).

Properties to be selected will:

  • Currently used for short stay accommodation
  • New to the rental market (includes new ownership of an investment property)
  • Current rental properties that are vacant at the time of application (if previously rented, the vacancy must have been tenant initiated and able to be verified)

Properties that are already available at an affordable rent won’t be selected for the initiative.

Properties must be available to rent for a minimum 12 months with the option of extension

It is anticipated that 110 households will be assisted through this pilot initiative (of which at least 50 will be young people as per Action 7 in Tasmania’s Affordable Housing Action Plan 2015-2019).

Location

Properties are needed in all regions of the state but approvals will be informed by the demands of applicants.

Property Attributes

The number and location of Suitable Properties will be demand driven. The location and size of suitable approved properties may vary; however, the highest demand is for one and two bedroom homes in each region.

Suitable Properties will be:

  • Affordable to low income households with maximum rents capped at 20 percent below the median market rent for the size and location of the property. This is the amount that is considered to be sustainable for the tenant at the end of the pilot should the tenancy return to market rent.
  • Vacant (or will become vacant before 30 June 2019) and is available to rent for a 12 month period with an option for extension.

Suitable Properties are not required to be furnished.

Property Approval Process

Private Rental Consultants have been engaged to promote the initiative and to identify and source Suitable Properties. Community Housing Providers are also encouraged to identify Suitable Properties from the private rental market.

Enquiries from property owners and agents may be directed to the Private Rental Consultants by Community Housing Providers and the Housing Connect Front Door.

Property owners or agents will complete a Private Rental Incentive Application Form and return it to Housing Tasmania. If the property meets suitable property requirements, the property will be deemed eligible which will trigger a physical inspection by the Community Housing Provider in that region.

Properties will be considered by the Director within two business days of receiving the completed Property Approval Form. Housing Tasmania will then advise the property owner or agent whether the property has been deemed eligible or not.

The Director of Housing Programs has discretion to approve more (or less) properties in a particular region if required due to an identified change in demand and need.

Housing Tasmania will notify Community Housing Providers of an eligible property’s availability. The Community Housing Provider will liaise with the property owner or agent to inspect the property within four days and confirm their acceptance that the property meets minimum standards under the Residential Tenancy Act 1997, has the required insurance in place, and meets the identified demand of existing applicants.

On acceptance the Community Housing Provider will enter into a head lease and payment agreement with the property owner.

If the property is vacant and immediately available, then the initial inspection will also confirm that the property is clean, tidy and fit for occupancy. If the property is not immediately available, then a second inspection by the Community Housing Provider is needed prior to vacant possession to confirm that the property is clean, tidy and fit for occupancy.

Payments will start from the commencement of the residential tenancy agreement between the Community Housing Provider and the tenant.

Tenancy Arrangements

The Community Housing Provider will enter into a residential tenancy agreement with the tenant (occupant/s) for a term of 12 months (fixed term for pilot period). The term of the head lease must not be less than the term of the residential tenancy agreement.

Shared tenancies will not be permitted whilst the initiative is a pilot.

Community Housing Providers are not required to pay a bond under the head lease.

Terminations

Both the head lease and the residential tenancy agreement can only be terminated by any party in accordance with the Residential Tenancy Act 1997.

The sale or transfer of a property is not a reason for termination for fixed term tenancies.

Termination of Residential Tenancy Agreement

If the residential tenancy agreement is terminated either by the Community Housing Provider or the tenant, the Community Housing Provider may source another Suitable Applicant from the Housing Register (at their discretion with consideration to the remaining term of their head lease within the pilot period).

During any periods of vacancy from the commencement of the residential tenancy agreement, the property owner will continue to receive rent from the Community Housing Provider under the head lease.

If the exiting tenant needs further housing assistance the Community Housing Provider will help them to contact the Housing Connect Front Door to ensure a social housing application or other form or housing assistance is made. Discretion may be applied by the Front Door to reinstate a tenant’s social housing application (if any).

Termination of Head Lease

If the head lease is terminated either by the Community Housing Provider or the property owner:

  • Tenancy management by the Community Housing Provider will cease.
  • Private Rental Incentive payments will cease.

Disputes

The Private Rental Consultants will regularly consult with Community Housing Providers, Housing Connect and property owners and/or agents to address any operational issues that may arise during the pilot period.

They will provide general advice to assist in the management of any issues that arise in this context and will be the contact point for relevant person/s on matters that arise individually or between parties.

Dispute resolution processes will be as prescribed under the Residential Tenancy Act 1997. Parties to agreements may make use of representative bodies such as (but not limited to) Consumer, Building and Occupational Services – Residential Tenancy Commissioner and the Tenants Union of Tasmania.

Further Information

Further information about Private Rental Incentives is available via the options listed below.

Website: www.dhhs.tas.gov.au/housing.privaterentals

Email:    housing.privaterentals@communities.tas.gov.au

Phone:  Private Rental Consultant – South (03) 6166 3625

Private Rental Consultant – North and North-West (03) 6777 1267