Response to issues paper exempt selling regime madeleine kingston

Residential Tenancies Act 1997 - SECT 69 (Victoria)

Landlord must ensure replacement water appliances have A rating

69. Landlord must ensure replacement water appliances have A rating

A Landlord must ensure that if an appliance, fitting or fixture provided by the Landlord that uses or supplies water at the rented premises needs to be replaced, the replacement has at least an A rating.

55. Reimbursement

(1) If a Landlord pays for anything for which the tenant is liable under section 52, the tenant must reimburse the Landlord within 28 days after receiving a written request for reimbursement attached to a copy of the account and the receipt or other evidence of payment.

(2) If a tenant pays for anything for which the Landlord is liable under section 53 or 54, the Landlord must reimburse the tenant within 28 days after receiving a written request for reimbursement attached to a copy of the account and the receipt or other evidence of payment.

(3) Subsection (1) does not apply if there is an agreement to the contrary under section 53.

Comment MK

The problems with this cost-recovery arrangement are discussed more fully in the deidentified case study that I submitted to various arenas, including the MCE SCO NECF1 (2008) NECF2 Package (2010); the Gas Connections Framework Draft Policy Paper (2009); the Treasury’s Unconscionable Conduct Issues Paper (2009) and the Senate’s Economics Committee Consumer Inquiry (ACL-TPA Amendment Bill2) ((2010); and previously the Productivity Commission’s Consumer Policy Inquiry (2007-2008) (subdr242 Parts 1-5 and 8).

These include:

Inaccessibility to fair and just complaints and non-litigious dispute resolution processes. For example most industry-specific complaints schemes are expressly limited under their charters to deal with complaints relating to BHW arrangements; embedded or exempt selling regimes. In the case of EWOV (Vic) they have openly expressed conflicts of interests

Difficulties under VCAT or other Fair Trading jurisdictions in other States in dealing with third parties not party to the Landlord-tenant agreement – which is why it is so attractive for Landlords to use those third parties in collusive arrangements with energy providers, with or without tacit or explicit sanction from energy authorities.

Cost of filing fees on a quarterly basis or at least as often as bills are issued, these costs often outweighing the value of reimbursement in monetary and stress terms

Waiting time for 28 days before VCAT reimbursement claim can be met

Dealing with recalcitrant Landlords who refuse to comply with Orders – repeatedly as documented for instance by the Tenants’ Union Victoria

The imposition of conditions precedent and subsequent especially with regard to access to meters that are not in the care custody and control of end-users of utilities. Alleged denial of access to such meters results in unwarranted disconnection of heated water in the case of the BHW arrangements

Consequences of alleged “breach” of energy contracts that do not under contract and common law or tenancy provisions exist in the first place between energy providers and end-users of centrally heated water

Possible implications for credit rating

The inability of certain client groups to effectively participate and follow-through in litigious proceedings, especially because of the stresses and delays involved; language barriers; or generally compromised ability.

Unjust imposition of unfair substantive terms under contracts that are not reflected in parity with generic provisions existing and proposed.

Unjust use of inappropriate trade measurement practices that erode best practice stands and breach the spirit and soon the letter of trade measurement laws upholding the principles of legal traceability of measurement and measurement standards that include using instruments for the right purposes, in the manner intended, measuring the right commodity with the right instrument; using the prescribed units and scales of measurement.

As soon as remaining utility exemptions are lifted, many of the current practices may carry strict liability penalties under trade measurement provisions.

The current arrangements for BHW contractual imposition trade measurement and charging will leave providers of energy vulnerable as well as potential those who tacitly or explicitly sanction practices that breach the spirit and letter of other provisions and violate best practice.

VICTORIA

NEW COMMENTS 21 January 2013

Arguments have been put forward by various parties including some responding to the AER Exempt Selling Guideline regarding protection and adequate complaints or other redress.

I will discuss the inadequacy of redress options, note here cursorily again that the Victorian and Civil and Administrative Tribunal as with other such tenancy Tribunals, can only deal with disputes directly between landlords and tenants, not those arising as a result of contractual dispute, for example for the alleged sale and supply of either electricity or gas on the basis of contractual disputes such as frequently arise because of

1. 
   Engagement by landlords of third parties to pursue such issues as billing and alleged payment default for the supply of such goods (notably under the BULK HOT WATER PROVISIONS
   
2. 
   Cooperation by Landlords to have third parties such as Billing agents and/or other Metering Data Providers because of what can only be seen as unmonitored and unchecked third party line forcing¹¹⁷, including under s47 of the amended Trade Practices Act 1974, now known as Competition and Consumer Act 2010
   

Please refer to the completed Market Review by the AEMC of the Effectiveness of Competition in the Electricity and Gas Markets in South Australia (2008-2009)

Refer in particular to the response from Uniting Care South Australia [UCSA)¹¹⁸, prepared through a grant from the Advocacy Panel by Bob Lim from Headberry and Partners, wherein there is also reference to findings regarding the alleged competitiveness in Victoria I quote directly from that submission from UCASA

“Victoria was the first region reviewed and the AEMC assessed that the Victorian market was characterised as having strong retail competition.

The removal of price caps was expected to increase this competition and so further reduce prices seen by consumers. Subsequently, the Victorian government introduced legislation to move small consumers into “unprotected” retail marketing from energy providers. This move was in direct opposition to all groups representing small consumers.

Victoria was the first region reviewed and the AEMC assessed that the Victorian market was characterised as having strong retail competition. The removal of price caps was expected to increase this competition and so further reduce prices seen by consumers. Subsequently, the Victorian government introduced legislation to move small consumers into “unprotected” retail marketing from energy providers. This move was in direct opposition to all groups representing small consumers.

The AEMC has now reviewed the SA energy markets and again as in Victoria, the groups representing small consumers opposed a change from a retail price cap on the basis that there is no (or not likely to be) effective retail competition, especially in the light of recent market events (in electricity).

What was not carried out in either the Victorian review or the SA review, was any analysis of the competitiveness of the retail market where there is no price cap (i.e. for consumers using >160 kWh pa of electricity). The importance of seeking such input is that retailers operate across the whole spectrum of consumption and not just in the small consumer market. A review of the impact of large consumers of energy would provide first-hand information to AEMC of what is really occurring in the retail sector. In its response to the AEMC draft first report the UCW offered to provide access to consumers operating in the unconstrained energy market so that AEMC could access first hand data as to the real retail competition in the energy markets. This was not taken up by the AEMC.”

SOUTH AUSTRALIA

In South Australia has mandated tenancy terms require that the Landlord bears all statutory rates, taxes and charges imposed in respect of the premises (Div 11, s73 Rates taxes and charges)

See new comments since last submission to AER’s Exempt Selling Guideline below re water charges (meaning mains water supply not heated water)

See changes below current and proposed during 2012

In relation to the “bulk hot water arrangements” in Queensland tenancy and fair trading provisions have been diluted to reflect the warranties and arrangements made by the Queensland Government at the time of sale and disaggregation of assets which has left residential tenants and other occupants in multi-tenanted dwellings extremely vulnerable and has created a monopoly situation, albeit that these tenants do not receive direct flow of gas to their apartments where water is centrally heated.

Please refer to the submission of Kevin McMahon to the NECF2 2^nd Exposure Draft, now also included as submission 46 to the Senate’s TPA-ACL Bill2 enquiry, now completed and reported. Mr. McMahon was a direct victim of these policies albeit living in social housing, living in public housing in Queensland.

The SA provisions¹¹⁹ mention water within the Act itself as shown below

Division 11—Rates, taxes and charges

73—Rates, taxes and charges

(1) It is a term of a residential tenancy agreement that the Landlord must bear all statutory rates, taxes and charges imposed in respect of the premises.

(2) However, rates and charges for water supply are to be borne as agreed between the Landlord and the tenant.

(3) In the absence of an agreement—

(a) the Landlord will bear the rates and charges for water supply up to a limit fixed or determined under the regulations; and

(b) any amount in excess of the limit is to be borne by the tenant.

The SA tenancy regulations offer less clarification in relation to other utilities than do other provisions barring Queensland, but it is more than reasonable to conclude that the provision of electricity nor gas must be by direct flow of energy and not on the basis of using a water meter to pose as a gas or electricity meter or where heated water reticulated in water pipes, having been heated in a communal water tank supplied by a single gas meter on common property represents electricity or gas provision.

Extract South Australian tenancy regulations¹²⁰/¹²¹

8—Other amounts recoverable by the Landlord

Pursuant to section 53(2)(c) of the Act, a Landlord is also authorized to require or receive payments for the provision of electricity, gas or telephone services at the premises if the accounts for those items are in the name of the Landlord.

South Australia

(added fact and commentary since August 2010 submission to AER))

NEW ADDITION TO SOUTH AUSTRALIAN TENANCY provisions and further analysis¹²²

Some previsions within the revised Residential Tenancies Act 1995¹²³/¹²⁴ (February 2012 version, are yet to be adopted; with some Bills before Parliament relating to mains water rates, apportionment thereof and apportionment of any water security rebates

The Residential Tenancies Regulations 2010¹²⁵ revoked the following:

Residential Tenancies (General) Regulations) 1995 (repealed)

Residential Tenancies (Water Raters) Regulations 1995) (repealed)

Under the revised 2010 Residential Tenancy Regulations 2010 (SA) a relevant section is Clause 7, referring to s53(2) of the Act, wherein the landlord is authorized to require or receive payments for the provision of electricity, gas or telephone services at the premises if the accounts for those items are in the name of the landlord

However, I discuss below the implications of this especially as they relate to BULK HOT WATER PROVISIONS

Extract from Residential Tenancies Regulations 2010 (SA) (version July 2012)

7—Other amounts recoverable by landlord (section53 of Act)¹²⁶

Pursuant to section 53(2)(c) of the Act, a landlord is also authorised to require or receive payments for the provision of electricity, gas or telephone services at the premises if the accounts for those items are in the name of the landlord.

See also Statutes Amendment National Energy Retail Law Implementation) Bill 2012 South Australia¹²⁷ A Bill for an Act to Amend the Electricity Act 1996; Essential Services Commission Act 2012; the Gas Act 1997, the National Electricity (South Australia) Act 1996 and the National Gas (South Australia) Act 2008

59A—Compliance with certain code provisions under Essential Services Commission Act 2002 and requirements of regulations

(1) A NERL retailer must comply with—

(a) code provisions as in force from time to time under the Essential Services Commission Act 2002 specified in, or in a manner prescribed by, the regulations; and

(b) any requirements imposed under the regulations,

relating to—

(c) technical or safety requirements or standards; and

(d) obligations as to the quality, safety and reliability of the supply of gas (relevant to the supply of gas by retail); and

(e) standards for, and installation of, meters relating to gas supply; and

(f) any scheme relating to energy efficiency; and

(g) any other matter related to the sale and supply of gas by retail specified in the regulations.

Maximum penalty: $1 000 000.

Amendments awaiting asset but passed through both houses SA

Part2—Amendment of Electricity Act 1996

4—Amendment of section 4—Interpretation

(1) Section 4(1)—after the definition of National Electricity (South Australia) Law insert:

National Energy Retail Rules means the National Energy Retail Rules as defined in the National Energy Retail Law (South Australia);

(2) Section 4(1)—after the definition of naturally occurring vegetation insert:

NERL retailer means—

(a) a person who is the holder of a retailer authorisation under the National Energy Retail Law (South Australia); or

(b) an exempt seller within the meaning of the National Energy Retail Law (South Australia);¹²⁸

16—Insertion of Part 3 Division 3AC

Part 3—after Division 3AB insert:

Division 3AC—Contestable services¹²⁹/¹³⁰/¹³¹

36AF—Contestable services

(1) This section applies in relation to the operation of a distribution network.

(2) For the purposes of this section, a service will be taken to be contestable if a customer (or potential customer) may choose the provider of the relevant service.

(3) The regulations may—

Some relevant extracts from the above Bill awaiting Royal Assent (South Australia)

Extract:

Part 2—Amendment of Electricity Act 1996

4—Amendment of section 4—Interpretation

(1) Section 4(1)—after the definition of National Electricity (South Australia) Law insert:

National Energy Retail Rules means the National Energy Retail Rules as defined in the National Energy Retail Law (South Australia);

(2) Section 4(1)—after the definition of naturally occurring vegetation insert:

NERL retailer means—

(a) a person who is the holder of a retailer authorisation under the National Energy Retail Law (South Australia); or

(b) an exempt seller within the meaning of the National Energy Retail Law (South Australia);

(3) Section 4(1)—after the definition of public powerline insert:

regulated entity means—

(a) an electricity entity; or

(b) a NERL retailer;

No 63 may 3210

Proposed

Part 11—Amendment of Residential Tenancies Act 1995

34—Amendment of section 73—Rates, taxes and charges

(1) Section 73(2)—after "However," insert:

subject to subsection (4),

(2) Section 73(3)(b)—after "is" insert:

, subject to subsection (4),

(3) Section 73—after subsection (3) insert:

(4) A landlord must, as soon as is reasonably practicable after obtaining the benefit of the water security rebate amount, ensure that an amount borne by a tenant under an agreement under subsection (2) or under subsection (3)(b) is reduced by—

(a) in the case of a tenant on land held as a single title consisting of a single place of residence—the water security rebate amount; or

(b) in the case of a tenant on land held as a single title consisting of more than 1 place of residence—the proportionate water security rebate amount,

(and if the reduction under this subsection results in a negative amount, 0 is to be substituted for that amount).

(5) If, during the billing period in which a landlord obtained the benefit of the water security rebate amount, the premises to which the rebate relates were subject to more than 1 residential tenancy agreement, the landlord must ensure that a reduction under subsection (4) is applied to the amount borne by a tenant under each tenancy agreement on a pro rata basis according to the number of days in the billing period in which each tenancy agreement respectively applied at the premises.

(6) In this section—

proportionate water security rebate amount, in relation to a tenant on land held as a single title consisting of more than 1 place of residence, is the amount that results from dividing the water security rebate amount for that title by the number of places of residence at the land to which the title relates;

water security rebate amount, in relation to rates and charges for water supply to residential premises, means the amount specified in an account for those rates and charges as representing the rebate for water security purposes.

MK Comment

The relevant recent and/or proposed changes to the current RTA SA 1995 SA (version February 2010) and associated regulations that are pertinent refer to water security deposit for apportionment but this means cold water as supplied to a mains water meter serving a premises (on-street single meter provided by WATER AUTHORITY for a property subject to property rates. Rates are applied to the owner of a property in respect of council, water, sewage, waste disposal services.

Where rebates apply the landlord must ensure that each residential tenant receives a proportional reimbursement of such water security rebates, where land is held as a single title consisting of more than one place of residence.

This should not be confused with direct supply of energy (electricity or gas only as goods not services) if supplied by a separate meter that can calculate consumption by legally traceable means (refer to National Measurement provisions)

At present billing agents or other categories of Metering Data Providers are relying on deeply flawed direct or tacit sanctions regarding provision of goods and services and to whom these are provided BULK HOT WATER practices

Careful perusal of this section yet to take effect will show precisely what is meant by apportionment to residential tenants where a single property houses more than one place of residence.

Subject to the passing of a Bill¹³² before the SA Parliament regarding changes to SA Tenancy laws, landlord responsibility will be to meet

Water authorities are not involved in provision of “bulk hot water”

Water authorities supply mains cold water to a meter. It is that mains supply that is associated with rates charges applied to the owner of title or Body Corporate, including multi-tenanted dwellings

Hot water flow meters as used currently to calculate deemed usage of gas relies on legally untraceable methods. Hot water flow meters do not measure water volume. They do not measure gas volume or electricity. They merely measure water flow. The heated water in any case is of varying quality depending on lagging, distance from original installation etc.

In any case, the Bill before the South Australian Parliament is clear about landlord liability regarding proposed changes to the Residential Tenancy Act 1995 SA relates to mains water supply applicable mains water rates and apportionment thereof and apportionment of any water security rebates received.

This has nothing to do with heating of water served by a single gas meter, using hot water flow meters (that do not measure either water volume; temperature (heat) or volume of gas (megajoules) or KW of electricity) (BULK HOT WATER ARRANGEMENTS – defying principles of legal traceability and also stripping rights under tenancy laws, since Tenancy Tribunals can only deal with direct disputes between landlord and tenant not third party supplies of either goods or services – the service provided is a billing or management service to the Body Corporate or Landlord not to the tenant.

Heated water is an integral part of a tenancy agreement and supply charges the responsibility of a landlord or Body Corporate in the absence of a separate meter which can legally calculate the amount of gas or electricity used to heat that water

There is no reference in the National Electricity Law and Rules that form part of the NECF to water meters or their use in calculating deemed gas or electricity usage.

In the case of cold water meters and electricity meters previous exemptions for utilities under National Measurement provisions have already been lifted with gas pending. The spirit and intent of these provisions prevail despite thwarted perceptions by other authorities state and federal. The National Measurement Institute is the sole authority regarding measurement.

Creative algorithm calculations regarding consumption or provision of goods is a legally unsustainable concept defying the fundamental principles of legal traceability.

Yet many jurisdictions, including Victoria persist with relying on legally unsustainable principles notably in relation to bulk hot water provision in multi-tenanted dwellings

Pursuant to the National Electricity Law and Rules that form part of the National Energy Customer Framework¹³³ stipulate that the provision of electricity or gas is on the basis of ‘flow of energy’ to the premises of the contractual party, deemed or otherwise, enjoying a tripartite contractual relationship with both retailer and distributor and impliedly any third party involved in the provision of electricity or gas as goods (not services)

In the case of service provision of ‘bulk hot water’ heated by a single gas or electricity meter, the contractual relationship between distributor-retailer and landlord or body corporate as owner or Controller of Premises (see National Measurement provisions discussed further elsewhere and in appendices)

The bulk hot water arrangements that defy best practice trade measurement, the spirit and intent of Trade Measurement provisions, subject to further lifting of utility exemptions are ignored as is the case for all other Acts

Not clarified but implied that this does not relate to energy (gas or electricity) supplied to a single gas or electricity meter which heats water of varying quality delivered in water service pipes not gas pipes or electrical conduits.

The bulk hot water charging issue will remain unaddressed if this legislation is passed

Meanwhile, though the current Regulations for the Residential Tenancy Act 1995 (SA) version February 2010 (current)¹³⁴ does allow for landlord to recover electricity and gas charges if the bill is in his name (but not heated water products as composite products, see sale of Goods Acts, fair trading provisions generic and trade measurement laws in which electricity and gas are described as goods not services)

This refers to situations where the landlord retains responsibility for electricity and gas charges.