A legal loophole means South Australian housing tenants could be forced into costly court cases to settle rental disputes if their landlord lives interstate.
Likewise, interstate landlords may find it difficult to evict tenants or force them to come up with unpaid rent.
On Tuesday, South Australian Civil and Administrative Tribunal (SACAT) president Judy Hughes handed down a decision that the tribunal was unable to rule in disputes between tenants and landlords who live interstate because it was not a court.
Attorney-General Vickie Chapman on Wednesday raised the matter in State Parliament, foreshadowing a change in the law so similar cases could be dealt with by the Magistrates Court.
The loophole emerged as a result of a separate racial vilification matter in New South Wales in April.
The High Court ruled in that case that state tribunals were unable to exercise judicial power to determine matters between residents of different states.
The loophole was further highlighted by a case in NSW in which a Sydney couple were left thousands of dollars out of pocket, after being forced out of their rented home because of toxic mould.
Sydney renters Anna Jacobs and Sefton Darby tried to get compensation for advance rent and belongings that had to be destroyed. (ABC News: Ursula Malone)
The couple took their SA-based landlord to the NSW Civil and Administrative Tribunal seeking to reclaim rent paid in advance and reimbursement for damage to furniture and clothing, but were told the tribunal did not have the jurisdiction to direct the landlord.
Tuesday’s decision involved a Melbourne landlord who was unable to get her Adelaide Hills tenants to pay their rent.
On May 14, the tribunal ordered the tenants to vacate the property, but this was appealed.
Justice Hughes decided yesterday that the tribunal did not have the power to resolve tenancy disputes across state borders, so it could not enforce the landlord’s notice to vacate.
Other types of SACAT disputes would not be affected without further decisions, she said.
New laws would move matters to Magistrates Court
Ms Chapman told Parliament she intended to introduce amendments to the law to allow the Magistrates Court to step in when the tribunal cannot enforce rulings.
“In a number of these cases we may not be able to enforce the collection of rent or indeed the eviction of tenants or indeed the refund of bonds so we’ve got a problem, we’re ready to clean it up,” Ms Chapman said.
She said there were 700 to 800 cases a year that this would affect.
Welfare Rights Centre lawyer Amanda Tsoundarou represented the tenants.
Despite winning the case, she said the decision would make it harder for tenants to seek compensation from landlords, such as when maintenance was not done, or in bond disputes.
“The decision in relation to the jurisdiction matter is understandable but it is not the preferable decision,” she said.
Moving such cases to the Magistrates Court would increase legal costs for tenants, she said.