Carol Altmann – The Terrier

Why did the Warrnambool City Council last July suddenly move from a handshake deal to a written lease for a council-owned flat rented by a staff member for more than 30 years?

This question needs a whole separate story, and this is it.

 

To re-cap, the property in question is attached to the Archie Graham Centre at 130 Timor St, where the senior council staffer has lived since 1987.

And as I wrote yesterday, thanks to Freedom of Information* we now know that for decades the council had nothing in writing to cover this tenancy, including rent payable, any bond, term of the lease, utilities, repairs and replacements.

The council instead relied purely on a handshake deal, until July last year.

Why July last year?

Stay with me here, because this is where things get murky.

 

On 30 July 2018 I asked the council my first questions about this tenancy.

On 21 August 2018, the first story was published, prompting a huge response from readers.

In the days before that story was published, the council refused to provide a copy of the lease and shut down questions by saying it had “nothing further to add” – case closed.

Not quite.

 

I lodged an FOI application* asking for a copy of the lease agreement. These things take time, often a long time, and a copy of the lease was finally provided in mid December 2018.

The lease provided started on 1 July 2018 and ends on 30 June 2019 (and included at least three typos – see photo below).

 

It was immediately obvious to me that there was something odd about this lease document.

The big red light was the start date: 1 July 2018. 

Was it just a massive coincidence that I asked questions on 30 July 2018 about an on-going lease that just happened to be put in writing – after 30 years – from 1 July 2018?

 

The smell of fish was getting strong, but it became overwhelming when I asked the council spokesman in April why the council suddenly decided to put the lease in writing last July.

Here is his answer in full:  “While a verbal lease agreement is legally acceptable – and was accepted by both parties to the lease – given the external interest in the property Council decided to prepare a written lease.” (my emphasis)

So the written lease was in response to questions by The Terrier.

But hang on, there’s another red light: the official council date stamp on the lease is 18 June 2018 – five weeks before I began asking questions. (See photo below).

 

I went back to the council spokesman and asked if he could explain how the date stamp pre-empted my questions, and the explanation shifted.

The written lease was now the result of an internal review.

This review of council properties was apparently held in early 2018 and, blow me down, after 30 years, it zoned in on 130 Timor St.

“External advice was sought and provided and one of the actions arising from this review was the preparation of a written lease for 130 Timor Street,” the spokesman said via email.

“The lease was drawn up in June 2018 and executed by the tenant and returned to Council on June 18,” he wrote (my emphasis).

Wait a second. Which one was it? Was the written lease prompted by The Terrier’s questions in July, or by the internal review?

I again asked the council spokesman – (are you still with me?) –  and, this time, it was both:

“The move to have written leases for Council residential properties – although verbal lease agreements are legally acceptable – had two drivers. 

“One was you, the other – which preceded your interest – was external advice and a review undertaken by our property manager,” the spokesman said via email on 8 May. (my emphasis).

Whichever way I look at it, this date stamp just doesn’t add up. You can’t draw up a lease in June in response to questions asked in July.

So what am I trying to say here?

Well, I am saying that I believe when The Terrier started to ask questions and asked for a copy of the lease, this written lease was hastily prepared and dated retrospectively, to make it appear as if it had always been in place.

 

I don’t know who was involved in the preparation of this lease, but it was ready to go when I lodged my first FOI.

I believe things came unstuck, however, when I lodged a follow-up FOI, asking for a copy of any earlier written leases for this property.

There were none and this exposed the handshake deal that had been in place for 30 years – a handshake that I don’t believe we were ever supposed to know about.

Given the conflicting explanations, all the markers point to that conclusion.

Does any of this matter?

Yes, because this whole saga strikes at the very heart of the WCC’s transparency, governance and accountability for managing our public assets: that is the nub of it.

 

A 30-year handshake deal for a council-owned apartment might be legal, but it is a very dubious way to run the show.

As for the possibility of manipulating date stamps on documents, well, I will leave that for you to contemplate.

And this is why I am not naming the tenant. The name doesn’t matter: what matters is that this whole situation has been sanctioned by our council for years, to the point of hurriedly drawing up a lease, and this is of serious concern to me.

 

This is what makes this whole story of public interest and why I have pursued it for almost a year.

A final word from the council spokesman:

“Council no longer has verbal lease arrangements in place for residential properties that have a lease of more than 12 months.”

That, at least, is a start to ending the rot.

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This story is the Terrier Tip Jar at work. All of the above is now public because of a series of Freedom of Information applications that were paid for by supporters of The Terrier. To be part of it, click below:

Terrier Tip Jar

Carol Altmann – The Terrier

Almost a year ago, The Terrier revealed a senior staff member of the Warrnambool City Council had been living in a council-owned, CBD apartment for more than 30 years.

Since then, I have been trying to get a copy of the lease.

As it turns out, there wasn’t one: the deal was based on a handshake deal.

This handshake deal – a verbal lease agreement – apparently covered everything from annual rental reviews, to repairs and the $12,000 replacement of a garage.

 

First, a quick recap.

The council-owned apartment in question is in the old bank building at 130 Timor St, which is part of the Archie Graham complex and where the staff member has lived since 1987.

According to the council responses to my questions last July and August, the apartment is leased for $190 a week, with the rent reviewed annually.

Any repairs to the property were also included in the rental agreement, it said, including a $12,000 garage that was built for the tenant mid-last year after an old garage was demolished as part of larger works at Archie Graham.

(To get the full background, you can find my earlier stories here and here and here. You can find the council’s original response and justification for the ongoing lease here. It essentially argues that because the property is linked to the Archie Graham complex, it would be difficult to rent out to most people.)

Given the prime property is owned by the people of Warrnambool, I was keen to see a copy of the lease agreement that had covered its use for three decades.

 

The council refused to supply a copy, so last October I lodged a Freedom of Information* application and in December last year was given a copy of a lease.

This lease shows a start date of 1 July 2018 and and end date of 30 June 2019. (More about this document later).

I lodged a second FOI application, this time for a copy of the lease that was in place before 1 July 2018 and that is when things shifted from the unusual to the unbelievable.

This FOI revealed that there was no written lease in place for a public building, for 30 years, before the one I was given that shows a start date of 1 July 2018.

 

To quote the FOI officer: “I have conducted a thorough and diligent search for the document you have requested, however as a result of gaining internal advice I have been informed that the document does not exist.”

“The reason for the nonexistence of the document is that prior to the current written lease, the preceding lease was verbal,” she wrote.

Verbal lease agreements are not illegal, but for long-term leases they are rare and I would suggest in government they are virtually non-existent.

The only time a verbal lease might be used in the public service is for short-term rentals, say up to three months, while a new staff member finds their own accommodation.

When it comes to a council lease of more than 30 years, for a CBD apartment owned by the public, you would assume a written lease would be mandatory.

 

I doubt you would find any other council among the 79 in Victoria that would have a similar, handshake deal in place with a council staff member, or anybody else for that matter.

In fact, when I first wrote about this apartment last year, I couldn’t find any other council that rented long-term accommodation to a staff member unless it was part of their contract, like a caravan park caretaker.

So it begs the question of who at the WCC started this handshake deal in 1987?

And who has since agreed to it continuing?

 

Most importantly, how did the successive WCC officers in charge of managing council properties ever keep track of it?

Were the annual rent reviews and any increases jotted down on a Post-it note?

And what about responsibility for repairs and replacements – including the $12,000 garage – was that documented in writing? Was there an understanding about the use of power, gas and water? How about a bond?

Apparently all of this detail was kept in somebody’s head.

 

This on-going, open-ended, verbal-only arrangement came to an end last July, when a written, 12-month lease was finally put in place, which opens up another whole storyline.

To be blunt, I believe how this written lease suddenly came about smells more than a fish-cleaning bin at the Hopkins River on a hot summer’s day.

That is the next instalment and you can read it tomorrow night.

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This story is the Terrier Tip Jar at work. All of the above is now public because of a series of Freedom of Information applications that supporters of The Terrier have funded. To be part of it, click below:

Terrier Tip Jar