Atherden v Commissioner for Housing for the Act
[2007] ACTRTT 20
•13 July 2007
AUSTRALIAN CAPITAL TERRITORY
RESIDENTIAL TENANCIES TRIBUNAL
CITATION:ATHERDEN V COMMISSIONER FOR HOUSING FOR THE ACT [2007] ACTRTT 20 (13 July 2007)
RT 2339 of 2006
Catchwords: Residential Tenancies Act 1997 (ACT)
Excessive rent increases- tenant’s capacity to pay rent increase-market comparators.
Tribunal: Mr A Anforth
Date: 13 July 2007
AUSTRALIAN CAPITAL TERRITORY )
RESIDENTIAL TENANCIES TRIBUNAL ) NO: RT 2339 of 2006
RE: JODIE ATHERDEN
(Applicant/tenant)
AND:COMMISSIONER FOR HOUSING FOR THE ACT
(Respondent/landlord)
DECISION
Tribunal : Mr A Anforth, Member
Date : 13 July 2007
Decision :
That the application is dismissed.
…………………………….
Member
AUSTRALIAN CAPITAL TERRITORY )
RESIDENTIAL TENANCIES TRIBUNAL ) NO: RT 2339 of 2006
RE: JODIE ATHERDEN
(Applicant/tenant)
AND:COMMISSIONER FOR HOUSING FOR THE ACT
(Respondent/landlord)
REASONS FOR DECISION
13 July 2007 Mr A Anforth, Member
This application relates to a 3 bedroom unit at 23/20 Tewksbury Circuit, Theodore in the ACT.
The applicant has been the tenant of the premises since 21 April 1996. She has lived in the house with her husband and 4 children. The current rent is $220.00 pw. The landlord is the Commissioner for Housing.
The applicant/tenant has been in a protracted dispute with the Commissioner for about two years concerning her application for a transfer to a larger house. This matter is irrelevant to the present dispute.
On 20 September 2006 the Commissioner served a rent increase notice on the tenant by mail. The notice notified an increase of rent to $250.00 pw from 19 November 2006. Prescribed term 38 Residential Tenancies Act 1997 (the Act) requires the landlord to “give the tenant 8 weeks notice in writing of the intention to increase the rent”. The Act does not define how a rent increase notice is to be served. Section 245-248 Legislation Act 2002 governs the situation and relevantly provides:
245. This part applies to a document that is authorised or required under a law to be served (whether the word ‘serve', ‘give', ‘notify', ‘send' or ‘tell' or any other word is used).
247(1) A document may be served on an individual—
(a) by giving it to the individual; or
(b) by sending it by prepaid post, addressed to the individual, to a home or business address of the individual; or
(c) by faxing it to a fax number of the individual; or
(d) by emailing it to an email address of the individual; or
(e) by leaving it, addressed to the individual, at a home or business address of the individual with someone who appears to be at least 16 years old and to live or be employed at the address.
Note See s 251 for service of documents under other laws.
(2) This section applies to service of a document outside the ACT in the same way as it applies to service of the document in the ACT.
248(1) A document served by post under this part is taken to be served when the document would have been delivered in the ordinary course of post.
(2) However, subsection (1) does not affect the operation of the Evidence Act 1995 (Cwth), section 160.
Note The Evidence Act 1995 (Cwth), s 160 provides a rebuttable presumption that a postal article sent by prepaid post addressed to a person at an address in Australia or an external territory was received on the 4th working day after posting.
Section 247 Interpretation Act 2002 provides that a notice posted to a tenant is taken to have been served when delivered in the ordinary course of post. Section 160 Evidence Act 1995 provides a rebuttal presumption that the postage occurred no later than the 4th working day after postage.
In the present case the notice was posted on 20 September 2006 which a Wednesday. Excluding the date of postage, the letter would normally be served in 2 working days. In the case the deemed service would have fallen due on the Saturday when no postal deliveries occur, therefore service is taken to have occurred on Monday 25 September 2006. It is exactly 8 weeks from 25 September 2006 to the 19 November 2006 and accordingly the notice of rent increase is valid.
The tenant applied to the Tribunal on 9 November 2006 for an order that the rent increase was excessive. The Applicant complained that the increase was excessive because:
(a) the house was too small for her families needs
(b) there had been a regular increase in the rent over the preceding years. On 22 September 2002 the rent increased from $155.00 to $175.00 per week. On 19 October 2003 the rent increased from $175.00 per week to $220 per week.
(c) the house required new carpets and repainting inside.
(d) the size of the rent increase would cause the tenant financial hardship. The family’s household income was $1126.00 per week.
In evidence before the Tribunal the tenant admitted that the Commissioner had offered to recarpet the house and paint the inside but the tenant declined the offer on the basis that the work was likely to cause inconvenience to her family.
The tenant produced evidence of household income and expenditure from the Care Financial Counselling Service. This showed that the income and expenditure was finely balanced.
10. The tenant produced evidence of 12 comparative premises. The rent for these premises ranged between $280-$340 per week.
11. The Commissioner commissioned a valuation of the premises from Egans National Valuers. The valuation considered 5 comparative premises, not including any of the 12 comparative premises proposed by the tenant. The rents ranged from $265-$295 per week. Egans assessed the market rent at $270 per week.
12. The Commissioner took issue with the tenants financial hardship argument. The Commissioner pointed to a number of discretionary expenditures in the income and expenditure statement.
13. The Commissioner pointed out that the increased rent constituted less than 25% of the house hold income. The figure of 25% is the benchmark for the rent charged to low income tenants on rebated rents. The Commissioner noted that if the tenant were to presently apply for a government house that the household income would exceed the permissible income level.
14. The Commissioner made strong submissions that the affordability of rent is an irrelevant consideration for the Tribunal when considering whether a rent increase is excessive.
Legislation:
15. Section 68 of the Act sets out the criteria for assessing whether a rent increase is excessive. Section 68 reads:
68(1) The Tribunal shall allow a rental rate increase that is in accordance with the prescribed terms unless the increase is excessive.
(2) For the purpose of subsection (1)—
(a) unless the tenant satisfies the Tribunal otherwise, a rental rate increase is not excessive if it is less than 20% greater than any increase in the Index number over the period since the last rental rate increase or since the beginning of the lease (whichever is later); and
(b) unless the lessor satisfies the Tribunal otherwise, a rental rate increase is excessive if it is more than 20% greater than any increase in the Index number over the period since the last rental rate increase or since the beginning of the lease (whichever is later).(3) Where a tenant or lessor proposes that a rental rate increase is or is not excessive, the Tribunal, in considering whether it is satisfied as to the proposal, shall consider the following matters:
(a) the rental rate before the proposed increase;
(b) if the lessor previously increased the rental rate while the relevant tenant was tenant—(i) the amount of the last increase before the proposed increase; and
(ii) the period since that increase;
(c) outgoings or costs of the lessor in relation to the premises;
(d) services provided by the lessor to the tenant;
(e) the value of fixtures and goods supplied by the lessor as part of the tenancy;
(f) the state of repair of the premises;
(g) rental rates for comparable premises;
(h) the value of any work performed or improvements carried out by the tenant with the lessor’s consent;
(j) any other matter the Tribunal considers relevant.(4) Where the Tribunal considers a proposed rental rate increase is excessive but a lesser increase would not be, it may disallow so much of the increase as is excessive.
(5) In subsection (2)—
“Index number” means the Consumer Price Index (Privately-owned dwelling rents expenditure class) for Canberra published from time to time by the Australian Statistician.
Consideration of the issues:
16. The proposed rent increase does not exceed the index number by 20% and accordingly the tenant bears the onus of showing that the rent increase is excessive.
17. For the reasons given in Donohue v Havelock Housing Association; McGough v Havelock Housing Association 2007 ACTRTT 1and in Davy v NSW Land and Housing Corporation 2007 NSWCTTT 25 the Tribunal does not accept the Commissioners submissions that the capacity of a class of tenants to pay a rent increase is irrelevant. The Tribunal adopts the conclusion reached in those cases:
If the intent of the legislation is to protect tenants and their families from dispossession arising from excess rents then this can only be done if regard is allowed to capacity to pay, at least in the limited sense of whether the proposed rent is within reach of a family on an income range likely to be seeking housing in the relevant premises. It is not suggested that the particular idiosyncrasies or spending habits of a particular tenant should be taken into account in considering capacity to pay.
18. Notwithstanding the above, in the present case the Tribunal is not persuaded that the proposed rent increase does cause affordability issues for the tenant. The tenant’s household income is about $55,000 pa which is of average dimensions. The increased rent constitutes less than 25% of that income thus, as a percentage of household income, is less than that charged to lower income families on rebated rents.
19. The parties have presented 17 comparative premises for consideration. The rent for all of those premises is greater than the proposed $250 per week.
20. In the circumstances of this case, the Tribunal is not persuaded that the rent increase is excessive.
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