Headleasing - EST0012A

Policy

Headleasing refers to properties that Housing NSW leases from the private rental market and sub-leases them to social housing tenants.

There are two types of headleasing programs that are used by Housing NSW to acquire private rental properties to house tenants whose needs cannot be immediately met through public housing. These programs are:

• short-term headleasing in which Housing NSW leases a property from the owner for 6 months to 3 years
• spot headleasing which is medium-term headleasing undertaken as part of a local allocations policy.

For more information on this policy, look in Entitlement, Background and Business Rules.

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Entitlement

Tenants housed in headleased properties will be treated in the same way as tenants living in properties owned by Housing NSW. Before the client agrees to the tenancy we will explain:

• the implications of living in a headleased dwelling
• tenancy agreement arrangements and length of tenure, and
• the consequences of breaking the conditions of the tenancy agreement.

Tenants housed in headleased properties will be rehoused when the lease expires. Housing NSW will pay reasonable relocation expenses.

Background

The level of demand for priority housing exceeds the supply of public housing in many areas. This causes a backlog of applicants unable to be housed in the short term. Headleasing helps Housing NSW increase its supply of housing.

Headleasing provides a way to meet immediate needs without requiring additional capital funds, particularly in areas where a long-term investment is not warranted.
Headleasing offers landlords advantages which help Housing NSW negotiate lower than market rents. Advantages to private landlords include:

• rent payments are secure
• the rental period is defined
• Housing NSW will return the property in the condition in which it was originally leased, apart from fair wear and tear.

Headleasing involves two leases. One lease is between Housing NSW and the landlord, and the other lease is between the tenant and Housing NSW. The Residential Tenancies Act applies to both leases.

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Business Rules

Housing NSW is committed to getting best value for money in the rental market. We will monitor the Rental Bond Board’s quarterly guide to rents to ensure that  we are paying market rent or below.

Housing NSW leases dwellings that are of a similar standard to the properties we own.

If the quality of the dwelling is below our standards we may ask the landlord to upgrade the property.

When selecting a property for headleasing we will apply the same care and principles as we do when buying property. See the policy on Acquiring New Public Housing (EST0001A). Negotiations will always be done at ‘arms length’.

The lease we sign with the landlord will always contain a clause that allows Housing NSW to sub-lease the property continually and unconditionally. The landlord will remain responsible for most maintenance requirements for the duration of the lease, and may be required to repaint and replace carpets periodically in longer leases.

When we house a tenant in a headleased property we will tell them about the implications of providing a home in this way, including that they:

• may have to move to another Housing NSW dwelling when their fixed term lease with Housing NSW expires
• will not be permitted to make any alterations or improvements
• will not be able to buy the property, and
• may not be able to keep pets.

Spot Headleasing

Where there is a need for housing that cannot be met by Housing NSW from its stock of properties, we will consider spot headleasing. Often we use spot headleasing to house clients that are approved for immediate or priority housing.

We will first determine the client’s needs and then search for a suitable dwelling. We will then approach real estate agents, making sure that we distribute our inquiries for rental properties equally among the agents in an area.
We will inspect at least three suitable rental properties before making a selection where practical.

When an applicant is approved for headleasing in a different allocation zone from the assessing team zone, the relevant Area Director for that zone is responsible for coordinating the headleasing process by delegating a Team/Officer to set up the headleasing process.

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When a lease terminates

When a lease ends Housing NSW may enter into a new lease arrangement with the private owner if:

• the property meets Housing NSW’s needs, and
• the terms of the lease are favourable.

If these criteria are not met, the property will be returned to the landlord.

Any repairs required at the end of a lease (other than for normal wear and tear) will be completed by Housing NSW contractors and not paid for out of any bond monies.

If the landlord terminates the lease before it has expired, Housing NSW may seek compensation.

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Appealing Decisions or Actions

Tenants who live in headleased properties may appeal decisions in the same way as tenants living in properties owned by Housing NSW.  That is, if a client disagrees with a decision we have made, they should first discuss their concerns with a Client Service Officer. The next step if they still believe we made the wrong decision is to ask for a formal review of the decision. For information on how reviews work, the client can ask the Client Service Officer for a copy of the fact sheet ‘Reviewing Decisions’, or read the Appeals and Review of Decisions Policy.

Tenants of headleased properties cannot appeal if they are required to move because the lease between Housing NSW and the private owner has expired. This decision is outside the control of Housing NSW.

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