Tenancy case studies

Consumer and Commercial Division 

The following case studies reflect decisions made by the former Consumer, Trader and Tenancy Tribunal, which became the Consumer and Commercial Division of NCAT from 1 January 2014.

These case studies should not be viewed as precedents.  They are provided as a general guide only and should not be treated as legal advice or relied upon as such.  All Tribunal matters are determined on the merits of the individual case and the supporting evidence.

Alterations and additions 

The Residential Tenancies Act 2010 makes provision for tenants who wish to make renovations, alterations or additions to the rental premises. Section 66 makes it clear that the landlord’s consent must be given before any changes are made, and section 67 provides that the tenants may remove any fixtures they installed at their own cost before giving vacant possession.

A couple rented an apartment for just over 12 months from a landlord who managed the property herself. During the tenancy the couple carried out various modifications to the apartment with the landlord’s consent, including the installation of light fittings, shelving and blinds.

When the tenancy ended the landlord lodged an application to the Tribunal under section 69 of the Residential Tenancies Act 2010 seeking compensation for the cost of rectification work required as a result of the alterations made to the property.

At the hearing the landlord conceded that she had consented to any alterations "as long as it adds value to the property". However she was shocked when she discovered the extent of the alterations and now she was seeking compensation. The tenants replied that every alteration was made with the landlord’s consent and that she had even agreed to reimburse them for their expenses.

The Tribunal Member reviewed the evidence provided by both parties, including the rental ledger, written correspondence, quotes and receipts for the alterations. The Member found that the tenants had met their obligations under the Act as they had the landlord’s written consent. There was also no evidence that the work was not done to a satisfactory standard or that it required removal or rectification. The landlord’s application for compensation was dismissed.

Damage caused by mould 

The Residential Tenancies Act 2010 clearly sets out the rights and responsibilities of both tenant and landlord regarding repairs and maintenance. Section 52 provides that a landlord has an obligation to provide the residential premises in a reasonable state of cleanliness and fit habitation by the tenant.

A man rented an apartment through a real estate agency for 13 months. Shortly after ending his tenancy, the former tenant lodged an application to the Tribunal claiming a substantial rent reduction, compensation for damaged items, moving and cleaning costs. He also sought compensation for stress, disappointment and breach of privacy. The claim related to mould in the apartment.

At the Tribunal hearing, the former tenant gave evidence that as soon as he had moved into the apartment the smell of mould was overwhelming. He said that the problem continued throughout the tenancy and he found it extremely frustrating. Despite constant cleaning, damp and mould treatments, and the purchase of a dehumidifier, the mould began to affect his health and it damaged his clothing and other belongings.

The former tenant said that he regularly complained to the real estate agency about the damp and mould, but that they “kept passing off the issue” to the strata managers as a common property problem. He said that nothing was done to resolve the issue.

The real estate agent did not dispute the claim about the mould, nor that they had not disclosed the ongoing mould issues at the beginning of the tenancy. The agent however gave evidence that they had struck a deal with the tenant early on in the tenancy to reduce his rent for the inconvenience of the mould. They also regularly credited the tenant for the purchase of damp rid products, mould treatments and the dehumidifier. The agent said that strata managers had arranged for a handyman to attend the premises to increase air flow into the rooms, and that litigation was pending against the builders of the unit.

The Tribunal Member acknowledged that the mould related to issues with the common property, however they were not relevant when it came to considering the rights and obligations between the landlord and tenant. The Member found that the landlord had failed to comply with the general obligations of section 52 of the Act and in particular failed to provide the premises in a reasonable state of cleanliness and fit for habitation by the tenant.

The Tribunal Member ordered the landlord to pay the tenant $6,000 compensation for economic loss, including for moving and cleaning costs, purchase cost for equipment to beat the mould and for damage to the tenant’s goods rendered unusable by the mould.

In relation to the rent reduction claim, the Member acknowledged the agreement struck between the landlord and tenant a few months into the tenancy and found the agreed rent represented what the parties thought to be an appropriate reduction. The claim for non-economic loss was dismissed as the evidence of distress, disappointment, loss of enjoyment and breach of privacy did not exceed the threshold to recover damages under the Civil Liability Act 2002.

Proof on the balance of probabilities 

The standard of proof required in the Tribunal is proof on the ‘balance of probabilities’ (the civil standard) - i.e. it is more likely than not events happened as asserted.  If a respondent is unable to attend the Tribunal hearing in person, it is essential that they provide sufficient evidence in the form of statutory declaration and supporting documents if they want to contest the application.

At the end of a tenancy, a real estate agency lodged an application with the Tribunal on behalf of the landlord seeking an order that the tenant pay $5,000 for unpaid rent, cleaning costs, and compensation for damage to blinds, door knobs and several down-lights in the kitchen.

At the Tribunal hearing, the agent appeared on behalf of the landlord. The tenant did not appear at the hearing in person. She had instead sent the Tribunal a letter denying the landlord’s claims, and had attached copies of various emails between the tenant and real estate agency.

The Tribunal Member noted that the tenant’s letter was not in the form of a statutory declaration or affidavit, and she did not provide any evidence to contradict the landlord’s application, other than to give some context to the dispute. On the other hand, the landlord’s agent gave evidence under affirmation as to the money owing for rent, and the condition of the property. The agent also produced copies of the condition reports, invoices, receipts and photographic evidence.

The Tribunal Member weighed the evidence of the agent against that of the tenant, and found that the landlord had made his case. After making an allowance for the rental bond, which had already been paid to the landlord, the Member made an order for the tenant to pay the amount of the shortfall.

Security and safety 

If a tenant wishes to add or change locks and other security devices to make the premises more secure, they must first obtain the landlord’s consent. The Residential Tenancies Act 2010 requires the tenant to also supply a copy of the new keys to the landlord.

The tenant of a rural property was concerned about the safety of his possessions and asked the landlord if he could change the locks to front and rear doors of the premises. The landlord agreed to this on the condition that a copy of the keys to the new locks would be supplied. The tenant then bought new locks and arranged for them to be installed. When the tenant failed to supply a copy of the new keys as agreed, the landlord lodged an application with the Tribunal.

When the parties arrived at the Tribunal, they attempted conciliation which was unsuccessful and the matter proceeded to hearing. At the hearing, the tenant gave evidence that the landlord had never held a set of keys to the premises. The tenant had concerns for valuable items of artwork which were kept on the premises and that as a gun licence holder he may, from time to time, have guns and ammunition on the premises. The tenant expressed concern about his personal security and the security of his valuables, firearms and ammunition if the landlord were to be given a set of keys to the premises.

The landlord explained that it was the landlord’s policy to have duplicate keys to all its properties for use in emergencies. It was also recognised that the Residential Tenancies Act 2010 contained provisions relating to the rights of parties to hold keys to residential premises.

The Tribunal Member found that the tenant had failed to insure the contents of the property to protect his valuable artworks, and that he had also failed to keep his guns and ammunition in a gun safe as required by law. There was also no evidence of any breaches of entry by the landlord. It was on this basis that the Tribunal Member found there was no reason the landlord should not be allowed to possess a copy of the keys to the premises. Final orders were made that the tenant was to provide the landlord with a copy of the keys to the front and rear door locks within a specified timeframe.

Sub-tenancy agreement 

The onus of proof for any claim against a rental bond is always placed on the landlord.  When the tenancy terminates, the landlord must be able to substantiate any claim they may have against the bond.  In a sub-tenancy agreement, that onus falls upon the head tenant.

Two students agreed to rent a room for ‘up to 6 months’ in a shared household and paid a rental bond equivalent to 4 weeks rent to the head tenant.  In this agreement, the head tenant effectively became the ‘landlord’ in a sub-tenancy agreement with the students.

Less than a month later, the students moved out of the house and asked for a refund of their bond. The head tenant refused to refund the bond alleging that the students had breached the tenancy agreement. The students lodged an application with the Tribunal for the full refund of the rental bond.

When both parties appeared before the Tribunal, they were encouraged to attempt conciliation.  Although a conciliator was available to help them reach an agreement, this was not possible and the matter was referred for hearing.

During the hearing the head tenant was asked to substantiate her claim against the rental bond. She argued that the students had moved out early and therefore they were in breach of the agreement. The students disputed the head tenant’s claim, stating that she had ordered them to move out ‘immediately’ and they had complied with her wishes. The head tenant also made a claim for cleaning costs but she did not provide any evidence such as photographs or a condition report to support the claim. 

The Tribunal found that the ‘up to 6 months’ term of the agreement was not specific, and that the students had moved out at the direction of the head tenant. Therefore it could not be argued that the students had breached the agreement.  As the head tenant was unable to provide evidence to support her claim for cleaning costs, orders were made for the full rental bond to be refunded to the students.

Termination 

Ending the tenancy early

If a tenant wants to end a residential tenancy agreement early, he or she may become liable for some extra costs. Under the Residential Tenancies Act 2010 the landlord can claim compensation from the tenant for any loss suffered as a result of the early ending of the agreement - such as payment of rent until new tenants move in, reletting fees and advertising costs.

A landlord and tenant entered into a tenancy agreement for a 12 month fixed term. After only 4 months the tenant advised the landlord of her intention to abandon the tenancy and vacate the premises and did so soon afterwards. The tenant had paid rent in advance, covering a further three month period. As soon as the tenant advised the landlord of her intention to vacate, the landlord began advertising the premises through his real estate agent. The landlord was unable to find a new tenant until a further 4 weeks had passed and lodged an application with the Tribunal claiming for 28 days loss of rent.

At the hearing the tenant claimed that the landlord did not advertise the property in the newspaper and consequently had failed to actively mitigate their loss. The landlord replied that as 95% of properties are let following enquiries made directly to the real estate agent’s office this is where the property was best advertised. The landlord also pointed out that following the closure of two large local businesses, the current vacancy rate was about 11%, adding that some properties had been vacant for over 12 months.

The Tribunal Member considered section 107 of the Residential Tenancies Act 2010 which sets out the rights of a landlord to compensation where a tenant abandons premises. The Tribunal was satisfied that the tenant abandoned the premises and that the landlord had taken the appropriate steps to mitigate any loss by advertising through the agent.

On that basis the Tribunal Member found that the landlord had successfully made out the case for the payment of rent arrears.

Retaliatory eviction

The Tribunal may refuse to make a termination order for a tenancy where termination of the tenancy by a landlord is motivated by steps taken by the tenants to enforce their tenancy rights.

Tenants had been living in a rental property for two years when they complained to the landlord that the swimming pool was leaking. Rather than repair the pool, the landlord agreed to a $20 per week rent reduction.  At the same time, the tenants also reported a leaking shower recess in the bathroom.  The shower leak was initially ‘patched up’ by a tradesperson but not properly repaired.

One year later the tenants wrote to the landlord again requesting repairs to the swimming pool and shower recess. They also stated that they would take further steps to protect their tenancy rights if the repairs were not carried out. The landlord did not respond to the repair request, but instead issued the tenants with a 60-day ‘no grounds’ notice of termination. At the end of the notice period, the landlord applied to the Tribunal for orders terminating the tenancy.

During the Tribunal hearing, the landlord stated that he had issued the notice of termination as he intended to carry out extensive renovations to the property to prepare it for sale.  Under section 115 of the Residential Tenancies Act 2010 the Tribunal may refuse to make a termination order if it is satisfied that the landlord was motivated to issue the termination notice as a result of steps taken by the tenants to enforce their tenancy rights.

After hearing the evidence of the landlord and the tenants, the Tribunal was satisfied that the main reason for issuing of the termination notice was because the landlord was reluctant to carry out repairs to the property and he was concerned that the tenants would take steps to enforce their rights under the Act.  The landlord’s application to terminate the tenancy agreement was dismissed.

Unexpected sale of property 

Under the Residential Tenancies Act 2010 a landlord has an obligation to disclose a proposed sale of the property before entering into a residential tenancy agreement. Otherwise the tenants may terminate the tenancy during the fixed term without being liable to pay any compensation or additional amount for the early termination of the agreement.

A young family signed a 12 month fixed-term tenancy agreement via a real estate agency to rent a house. Six months into the tenancy, the family received correspondence from the agency stating that the landlord had instructed them to place the property on the market and that they wished to conduct open house inspections every Saturday, and a second evening inspection during the week until the property was sold. This was the first time that the tenants were made aware of the landlord’s intention to sell the property.

After seeking independent legal advice, the tenants gave the agency a written notice advising that they sought early termination of the tenancy under section 100 of the Residential Tenancies Act 2010. The agency then lodged an application to the Tribunal on behalf of the landlord seeking orders to stop the tenants from terminating the tenancy and to pay compensation for any loss caused by the abandonment of the premises.

At the hearing, the Tribunal Member determined that the tenants’ notice of termination was valid as the landlord had not informed the tenants, prior to entering into the fixed term lease, that the landlord intended to sell the property.  The Tribunal also found that the tenants had complied with all the provisions of the Act in serving the notice of termination and vacating the property.

The Tribunal determined that the tenants were allowed to vacate the property without penalty and orders were made dismissing the landlord’s application.