Brogan Prestige Properties v Strand & Black
[2010] ACAT 60
•29 September 2010
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
BROGAN PRESTIGE PROPERTIES and STRAND & BLACK (Residential Tenancies) [2010] ACAT 60
RT 376 of 2010
Catchwords: Residential Tenancies – Bond dispute – Condition of Premises – Cost of repairs/replacement - Lessor’s obligation to repair – Rental reduction - Compensation
ACT Civil and Administrative Tribunal Act s. 48
Residential Tenancies Act 1997 (ACT) ss. 30, 31, 38, 71,
104(d)
Schedule 1, Standard Residential Tenancy Terms 54, 55, 59, 60
Fenton, Neist and Baker v. de Andrade [1999] ACTRTT 21 Irena Peters v Commissioner for Housing [2006] ACTRTT 6
Watson v. Douglas & Xavier [1999] ACTRTT 23
Worrall v. Commissioner for Housing [2002] FCAFC 127
Tribunal: Ms Jennifer David, Senior Member
Date of Orders: 29 September 2010
Date of Reasons for Decision: 29 September 2010
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 376 of 2010
BETWEEN:
BROGAN PRESTIGE PROPERTIES
Applicant/Lessor
AND:
ERICK STRAND & SAMANTHA BLACK
Respondents/Tenants
TRIBUNAL: Ms Jennifer David, Senior Member
DATE: 29 September 2010
ORDERS
1.That the tenants pay to the lessor a total of $6,151.83 made up of the following amounts for the repairs, cleaning, and replacements as indicated:
Ø$1,783.78 rental arrears to 15 February 2010
Ø$758.18 for water consumption during the whole period of the tenancy
Ø$707.37 to replace missing contents
Ø$2,016.00 to replace two couches and to dry clean 6 dining chairs
Ø$374.00 to replace two mattresses and to re-lacquer damager furniture
Ø$512.50 for gardening and rubbish removal
2.The lessors are to deduct the sum of $2,800.00 the amount of the refunded bond, from the amount the tenants are to pay under Order (1) above.
3.That the lessor's claim for $385.00 for cleaning during the tenancy is dismissed.
4.That the lessors are to pay the tenants compensation under section 104(d) of the Residential Tenancies Act 1997 in the total sum of $1,405.00 for breach of the obligation to repair the heating, leaking pipes and stained ceilings.
………………………………..
Ms Jennifer David
Senior Member
REASONS FOR DECISION
BACKGROUND
On 12 February 2008 the parties entered into a residential tenancies agreement for furnished premises at 7 Dooring Street, Braddon in the Australian Capital Territory for a fixed term of 12 months from 12 February 2008 to 11 February 2009. The rental was $700.00 per week, payable monthly. The Property Managers lodged the bond of $2,800.00 with the ACT Office of Rental Bonds. A further Tenancy Agreement in respect of the premises was entered into by the parties on 5 February 2009 for a fixed 12 months from 12 February 2009 to 11 February 2010 with an increased rental of $740.00 per week.
The actual owner of the property is Mr Tony Danilov; however, in the Tenancy Agreement the owner's Property Managers, Brogan Prestige Properties, was named as the lessor as prior to travelling overseas Mr Danilov signed an Authority to Act dated 24 January 2008 authorising Brogan Prestige Properties to act on his behalf with respect to the leasing of the property. The Authority to Act included the following provision:
This authority extends to the entering into of a lease with any future tenants in the name of the company, subject to my acceptance of the lease price offered.
The final tenant, Ms Samantha Black, vacated on 11 February 2010. Ms Black attended the Final Inspection on 12 February 2010 at which a number of issues were raised by the Property Managers; the Final Inspection Report dated 12 February 2010 listed various items of concern about the condition of the premises and about missing contents. Ms Black retained a key to the premises to attend to some of the items raised at the Final Inspection and handed the key to the Property Managers on 15 February 2010, which is the final vacate date.
The Property Managers claimed rental arrears, cost of cleaning both inside and outside the premises, cost of repairs to the premises, cost of replacement of missing and/or damaged contents and water consumption, in the sum of $7,597.72.
The matter was listed for a conference on 23 June 2010 at which neither tenant was present nor represented. The Conference Convenor ordered the bond be released in full to the Property Managers. The bond was so released by the Office of Rental Bonds.
The tenant, Ms Black, subsequently made application to set aside that order on the ground she had been ill on 23 July 2010 and unable to attend the Conference. Ms Black disputed the claims of the Property Managers and lodged a cross-claim seeking compensation for over-paid rent in the sum of $2,000 and compensation for the breach of the lessor's obligation to repair the premises during the tenancy. The Property Managers advised the Tribunal they were holding the bond refund cheque on file pending the outcome of these proceedings.
The matter came for hearing on 5 July 2010 when, after setting aside the orders of 23 July 2010, both parties were ordered to file and serve particulars of their claims and any documentary proof in support. The matter was heard on 28 July 2010 and a further hearing was held on 29 July 2010.
The matter was further listed on 18 August 2010 for submissions by the Property Managers on the sole issue of the legal effect of the Property Managers signing the tenancy agreement, not the owner of the property. The tenant, Ms Black, did not attend this hearing as she had to leave Australia on 3 August 2010 as her International Student Visa expired then. The Property Managers attended and produced the Authority to Act referred to above.
In all the matter was before the Tribunal for approximately 4 hours; this, together with the bundle of unsorted documents lodged by the Property Managers in support of their submissions meant that the Tribunal spent considerable time considering the oral and documentary evidence, the pleadings and the written submissions before coming to its decision. The Tribunal apologises to the parties for any inconvenience caused by the time taken to complete the decision and these reasons.
FINDINGS AND REASONING
An Inventory and Condition Report was signed by the Property Managers on 12 February 2008. The tenants did not dispute that they received copies of the Inventory and Condition Report; however, it was not signed nor returned by the tenants to the Property Managers. The Report contained a list of items headed "Contents". In these circumstances, I note that section 30(2) of the Residential Tenancies Act 1997 ('RT Act') provides that "a statement in a [condition report] about the state of repair or general condition of the premises and of any goods leased with the premises, is evidence of that state of repair or general condition on the day the tenant was given the report" if it is signed by the lessor. Thus the Inventory and Condition Report has been accepted as evidence of the condition and inventory of the premises and contents at the commencement of the tenancy.
The results of the Final Inspection on 12 February 2010 were entered on a Final Inspection Report form by Ms Kover, Manager of the Property Manager's office. That report was tendered as evidence of the condition of the premises at the end of the tenancy. The final inspection was attended by two representatives of the Property Managers and the tenant, Ms Black.
A.Lessor's Claim
The tenancy was obviously one that was difficult for all involved, including neighbours in near-by properties. The Property Managers lodged various documents which detailed complaints made by the owners of neighbouring properties concerning allegations of very noisy parties that continued well into the early hours of the morning. Two Notices to Remedy and a Notice to Vacate were issued by the Property Managers in relation to noise and rental arrears.
Apart from the rental arrears and water consumption charges, the Property Managers claimed the cost of cleaning both inside and outside the premises, the cost of repairs to the premises, cost of replacement of missing and/or damaged contents on the basis the tenants breached their obligation under Clause 64 of the standard residential tenancies terms in not leaving the premises in substantially the same state of cleanliness, including removing all their belongings, and in substantially the same condition as at the commencement of the tenancy, fair wear and tear excepted.
The owner, Mr Tony Danilov, stated in an email dated 16 July 2010 to the Property Managers, that he undertook "significant improvements" to the property when he purchased it in 2006 and lived in the property from 2007 to 2008 prior to letting the property to the tenants in these proceedings.
The Property Managers lodged Inspection Reports of previous inspections of the premises by the Property Managers during the two tenancies; the Reports demonstrated that the tenants had breached their obligations under Clause 63(c) of the standard residential tenancy terms, to "take reasonable care of the premises and their contents, and keep them reasonably clean".
Rental Arrears
The Property Managers claimed rental arrears to 15 February 2010 of $1,783.48. The claim was supported by a printed copy of the complete rental ledger for the property provided by the Property Managers' accountancy firm, Taubenschlag & Associates. The ledger showed that there was rent outstanding from 26 January 2010 to the vacation date of 15 February 2010.
Ms Black disputed the amount, stating that her father paid the rent on the 10th of each month and the rent should have been in advance at 15 February 2010, the date she vacated the premises. However, after being requested to do so by the Tribunal at the hearing on 27 July 2010, subsequently Ms Black did not provide documentary evidence to support her statement.
The Tribunal finds that the amount of $1,783.48 representing rental arrears from 26 January 2010 to 15 February 2010 is owed by the tenants to the Property Managers.
Water Consumption
The Property Managers claimed the amount of $1,213.99 was owed by the tenants for water consumption at the premises as it had not been paid by the tenants; the amount represented water consumption during the year of the original tenancy from 12 February 2008 to 11 February 2009 and of the present tenancy from 12 February 2009 to 15 February 2010.
The Property Managers produced ActewAGL receipts for water consumed at the premises from 7 January 2008 to 12 January 2010. The Tribunal notes that the amounts in the receipts charged for water consumption totalled more than the amount claimed: the amounts were as in the table below:
Period Water consumption
charge7/1/2008-9/4/2008 $121.91 9/4/2008-9/7/2008 $59.40 9/7/2008-10/10/2008 $655.81 10/10/2008-8/1/2009 $193.25 8/1/2009-8/4/2009 $101.16 8/4/2009-8/7/2009 $208.41 8/7/2009-12/10/2009 $209.74 12/10/2009-12/1/2010 $215.59 TOTAL $1,765.27
The tenant, Ms Black claimed that the water charges had been paid every three months during the tenancy. At the hearing on 27 July 2010 the Tribunal requested Ms Black to lodge with the Tribunal any documents that evidenced the payments made for water consumption during the two tenancies. No such documents have been lodged with the Tribunal.
Whilst the receipts produced by the Property Managers covered a period of just over a month prior to the original tenancy commencing on 12 February 2008, they also did not cover the period of almost a month prior to the date of vacation on 15 February 2010. Thus these two periods in a practical sense cancel each other out.
The Tribunal finds that the amount of $1,213.99 claimed by the Property Managers for water consumption during the two tenancies is proved and now turns to the issue whether the tenants owe the full amount to the Property Managers under Clause 46 of the standard residential tenancy terms which provides:
The tenant is responsible for all charges associated with the consumption of services supplied to the premises, including … water.
The tenant, Ms Black, argued that the high water consumption occurred while the pipes were leaking and thus should be paid for by the lessors. It is apparent from the above table that there was significantly higher consumption at the premises during the period 9 July 2008 to 10 October 2008 as that charge was almost three times the amount of the charges for the other periods during the tenancy.
The Property Managers stated that, by email on 14 August 2008, they had requested R & B Solutions to check the ridge capping and to check for any entry points where water may be getting into the house. R & B Solutions replied by letter dated 25 August 2008 stating that there were a number of problems causing leaks, two of which they had repaired. They reported that the 'bulk of the water problem is flooding of the laundry when the bath plug is pulled. We suspect there is a partial blockage further down the line, so the substantial quantity of water in the bath can't run off quickly enough, thus flooding back up through the laundry waste outlet (and when covered up to pipe to the bathroom”[Emphasis added]. They suggested the use of a plumbing camera to identify the fault and advise a remedy.
Boss Plumbing was then employed by the Property Managers on 6 August 2008 to repair the above water leak and another leak the tenants had reported from a pipe under the kitchen sink. Boss Plumbing reported on 12 August 2008 that the 'leak in the kitchen was due to small holes in drain from dishwasher caused by cat biting hose. The result from this is severe damage to kitchen cupboards and drawers'. The tenants had kept a cat (against the Property Managers' request in an unendorsed clause attached to the tenancy documentation) which had apparently bitten the hose. The Tribunal finds that the kitchen leaks were from the tenants' cat biting the pipes and were thus the tenants' responsibility to repair.
Boss Plumbing also reported on 12 August 2008 that 'no other leaks were found'. However, a further invoice from Boss Plumbing dated 27 October 2008 reported that they had 'unblocked drain between laundry and out side of house'. This supports the explanation given by R & B Solutions that the 'bulk of the water problem is flooding of the laundry when the bath plug is pulled" and that there was most probably "a partial blockage further down the line". The Boss Plumbing invoice of 27 October 2008 coincides with the period of the significantly higher consumption which ended on 10 October 2008. As a result the Tribunal has accepted the tenants' explanation for the higher consumption during that period.
In the circumstances the Tribunal determines that the tenants should only pay the sum of $200.00 for water consumption during the period 9 July 2008 to 10 October 2008. The sum is based on the amount charged for water consumption during the equivalent period in 2009, which was $209.74. This results in a determination that the tenants should pay the total amount claimed $1,213.99, less the balance of $455.81 for the period 9 July 2008 to 10 October 2008 that the Property Managers are to pay (being $655.81 less the $200 ordered to be paid by the tenants). This results in a total of $758.18 to be paid by the tenants to the Property Mangers under Clause 46 of the standard residential tenancy terms.
Cleaning
The Property Managers claimed $385.00 for cleaning of the premises during the tenancy in August 2008. However, the amount was actually claimed by a cleaner who was engaged by the tenants directly and who was not party to these proceedings. The Property Managers had not engaged the cleaner, nor paid her for her services. As such, the Tribunal dismissed this part of the Property Managers' claim.
Missing Contents
The Property Managers claimed a total amount of $785.25 for the cost of replacement of contents missing from the premises at the Final Inspection on 12 February 2010 and/or on 15 February 2010, the date Ms Black handed the last key to the Property Managers. The cost of replacement was comprised of $239.20 for an exercise bike and a total of $468.17 for following items, making a total claim of $707.37 for which receipts were provided.
Damaged and/or Missing Items
Replacement cost - receipts provided
Table lamp $20.91 Bath mat $22.99 Toilet brush set $6.75 Frying pan $13.56 Coffee mug $15.90 2 x sheet sets and 3 x towels $109.02 2 x queen bed sheet sets $73.95 Kitchen tidy bin $17.38 2 x Quilt covers $49.90 Bath mat $7.99 Bathroom towel $5.07 Red wine glasses $25.75 Bagless vacuum cleaner $99.00 TOTAL $468.17
The above table had to be compiled by the Tribunal as the Property Managers had only provided a bundle of receipts for the individual items. The Tribunal requests that lessors provide detailed lists of their claim when it is made up of a number of small items, rather than leave it to the Tribunal to compile a list to ascertain the total amount and whether the receipts add up to the amount claimed.
The low total cost of the replacement of the missing items and the fact that a number of items were not replaced indicated to the Tribunal that the Property Managers had satisfied their obligation under section 38 of the RT Act. Therefore, this part of the Property managers' claim is $707.37, being the total of the above $468.17 and $239.20 for the missing exercise bike. The Property Managers also mitigated the cost of replacing the missing contents by purchasing the items from discount stores and by determining not to replace all of them.
The tenant, Ms Black argued that the missing items were not raised at the Final Inspection and so could not be claimed by the Property Managers. Ms Black said that only two missing couches and six dining room chairs that needed cleaning had been raised at that Inspection.
In response the Property Managers produced a Final Inspection Report dated 12 February 2010 which noted that some pots and pans needed replacing in the kitchen, all linen was missing, an exercise bike was missing and that linen and pillows were needed. By email dated 15 February 2010 to both tenants, the Property Manager, Mrs Brogan, confirmed that Ms Susan Kover from the Property Managers Office had advised Ms Black at the final inspection that there was no linen and no doonas.
All the items listed in the above table were listed in the Inventory and Condition Report signed by the Property Managers and handed to the tenants. At the various hearings, Ms Black did not deny the above items were present at the commencement of the tenancy. She indicated she did not know where the exercise bike was and she did not dispute that the doonas and bed sheets were missing. She argued that the tenancy had been for two years and that fair wear and tear should be taken into account.
The Tribunal does not accept that missing contents constitute fair wear and tear under Clause 64 of the standard residential tenancy terms. Under Clause 64 tenants must leave the premises in substantially the same condition as they were in at the commencement of the tenancy including the contents listed in the Inventory and Condition Report. The Tribunal finds that the tenants must pay for replacement of the missing items in the total sum of $707.37.
Damaged Contents
-Couches and chairs
The Property Managers claimed the cost of replacing two two-seater couches damaged beyond repair and the cost of dry cleaning six dining chairs. All these items were listed as being in good condition in the Inventory and Condition Report Property at the commencement of the tenancy. The Property Managers produced photographs taken on 29 January 2008, just prior to the commencement of the tenancy, showing the couches and dining chairs in very good condition.
These items were raised at the Final Inspection and were agreed to by Ms Black both at the hearings and in her response to the Property Managers' email of 15 February 2010 which had attached photographs of the two 'destroyed' couches and six 'filthy' dining chairs. The Tribunal has inspected those photographs and accepts that the couches would have had to be replaced and that all the chairs needed cleaning.
The Property Managers produced receipts for $1,926.00 to replace the two couches and $90.00 to dry clean the six dining chairs. Ms Black argued that depreciation should be deducted as the couches were at least two years old.
The Tribunal has determined that both the couches were in very good condition prior to the tenancy and accepts that the owner will have the use of the new couches into the future. In the Tribunals' experience, the claimed costs of replacing two two-seater couches ($1926.00) and of the cleaning of six chairs ($90.00) were both very reasonable. The Tribunal has determined not to deduct any proportion of the claimed costs for replacing and cleaning these items. The Tribunal noted that Ms Kover from Property Managers stated that Ms Black had accepted the tenants had to replace the couches at the Final Inspection.
As a result the Tribunal has determined that the tenants should pay the Property Managers' claim for the damaged and dirty items, totalling $2,016.00.
-Damaged furniture
The Property Managers claimed a further $198.00 to re-lacquer scratched furniture and $176.00 to dry clean two queen sized mattresses. They produced photographs of a damaged desk showing numerous scratches and black marks on the desk surface. The invoice supporting the claim noted 'better but not perfect' for the result of the re-lacquering.
The Inventory and Condition Report listed all these items as being in good condition. The Final Inspection Report noted that the mattresses in both Bedroom 1 and Bedroom 2 were 'dirty and stained' and needed replacing. It also noted that the bedside tables in each bedroom were scratched. In their written submissions the Property Managers stated that Ms Black 'conceded responsibility' for the blood stained mattresses after the Final Inspection and undertook to replace them.
As noted above, Clause 64 provides that tenants must leave the premises in substantially the same condition as they were in at the commencement of the tenancy, fair wear and tear excepted. The Tribunal does not accept that the serious stains on mattresses and the deep scratches on the furniture as shown in the photographs constitute fair wear and tear. As a result the tenants are ordered to pay the cost of cleaning the two mattresses and the re-lacquering of the scratched furniture in the total sum of $374.00.
Garden
The Property Managers claimed a total of $1,025.00 for returning the garden to its condition prior to the tenancy. They produced four photographs of the outside of the property taken on 18 January 2008 which showed an immaculate front garden with mulch and no weeds even in the areas of pathways, and a well kept back garden without weeds.
Mr Hanna, who undertook the work on the garden after the tenancy, forwarded photographs of the garden as he found it on 8 February 2010. The photographs show tall weeds throughout the front garden including the pathways with the back garden unmown and with two broken hammocks and some rubbish. In an email to the owner, Mr Hanna stated that he found a pile of clothes on the ground in the backyard which took two people 30 minutes to clean up. He said he discovered the clothes when his lawnmower became tangled in them. Mr Hanna said he cleaned up 'plenty of beer bottles and rubbish in the front yard'.
The Tribunal notes that in the above email Mr Hanna also said he cut down three large branches that were leaning over the garage and the house roof. He also cut back some bushes that were getting too close to the wiring running above the back fence and cut back 'some more of the large stump at the front which seemed half finished'. The necessity for these items to be attended to was not the result of any action by the tenants and should not be the tenants' responsibility.
In his invoice Mr Hanna does not breakdown the amount of time spent on each part of the work he undertook. As a result the Tribunal has estimated the amount of time that would have been spent on the cutting down of the three branches, the bushes and working on the large stump. Given the list of items Mr Hanna worked on, it would appear that these three items would amount to approximately half of the work he undertook.
For these reasons, the Tribunal has determined that the tenants should pay half the total amount claimed for the gardening work, amounting to $512.50.
Application Costs
The Property Managers sought an order that the tenants pay the application fee for the present proceedings. Under sections 100 and 102(1)(b) of the RT Act each party is to bear their own costs unless the Tribunal considers that a party to an application has caused unreasonable delay or obstruction before or during the hearing of the application in which circumstance the Tribunal can order that party to pay the other party's costs. Section 48 of the ACAT Act provides the same rule. In the circumstances of this case, the Tribunal does not consider that unreasonable delay or obstruction occurred. The Tribunal has dismissed this part of the Applicant's claim.
B.Tenant's Cross Claim
The tenant, Ms Black, in her oral evidence and in her written submissions stated that 'throughout the tenancy', the tenants had notified the Property Managers of repairs that needed to be done, especially to the reverse cycle air conditioner which 'did not work during the two years of the tenancy' and to water leaking 'all through the house … destroying the ceilings'. On behalf of both the tenants she claimed the return of the bond in full, minus the value of the two couches and the dry cleaning of the six chairs. She also claimed overpaid rent in the amount of $2,000.00. At the hearing Ms Black said she wanted to claim a reduction in rent and/or compensation for the Property Managers' breach of the obligation to carry out repairs during the tenancy. She listed the repairs not undertaken or undertaken tardily as: heating not working, leaking ceilings, plumbing issues in the kitchen, rotting kitchen drawers. Lastly, Ms Black sought to object to a 'rental increase'.
The Tribunal notes that tenants’ claim is a claim for a reduction in the overall weekly rent, not a claim for separate reductions for each tenant’s share of the weekly rent. The tenancy being a fixed term tenancy the tenants are jointly and severally liable for the whole of the weekly rent. The Tribunal will not apportion any awarded compensation and/or rental reduction between the tenants.
Heating System
In her written submissions, Ms Black said that the house was advertised as a heated house, that there was a reverse cycle split system heater and air conditioner installed in the downstairs lounge room but the heating did not work during the whole of the two years of the tenancy. She alleged that Property Managers had breached Clause 54(1)(b) and (c) of the standard residential tenancy terms in not providing a heating system in a reasonable state of repair and reasonably clean at the start of the tenancy. She also alleged that the Property Managers had breached Clauses 55(1) and possibly Clause 59 in not maintaining and/or repairing the heating system to during the tenancy.
An Inspection Report by Ms Kover from the Property Managers dated 2 April 2008 noted that the heating was not working and needed service. By email dated 30 April 2008 Ms Black reminded the Property Managers that the heating in the house was not working.
On 29 April 2008, the Property Managers advised the tenants by email that the owner's brother Zarko Danilov, had agreed to look at the heating. By an email on 30 April 2008, the Property Managers advised the tenants that they had contacted 'Andrew' from Quality Heating & Cooling to do a service call on the heater. The Property Managers confirmed their request to Quality Heating & Cooling by email on 1 May 2010.
In a Tax Invoice dated 6 May 2008 Quality Heating & Cooling reported to the Property Managers that their tradesman found "the return air filters were blocked with dirt and dust. Cleaned and tested unit; seems to operate well now. Explained to the tenants the filters required cleaning at least every 3 months'.
After the tenants complained that the heater was still not working, Ms Kover from Property Managers emailed them on 20 May 2008 stating that the person who checked the air conditioner had told Property Managers that the heater's filters were clogged with dust. The email went on to say that Ms Kover believed that the owner's brother had shown the tenants how to clean the filters. Ms Kover offered to show the tenants again how to clean the filters.
Ms Black stated that after the Property Managers emailed them on 20 May2008 both tenants cleaned the filters but the heater still did not work and, despite complaining to the Property Managers 'numerous' times thereafter, the heater never worked during the tenancy. In fact, the tenants stated they had to purchase curtains (costing $119.88) and electric heaters (costing $99.45) in about June 2009 to attempt to warm the house, but these heaters could only be used in one room at a time. Ms Black said the premises were extremely cold, damp and smelly throughout both winters as a result.
In undated letter to Ms Black, the second tenant Ms Strand confirmed that the house was 'totally freezing', that the tenants could not get the heater to work and that the men who came to fix it suggested the tenants 'just flick it off for a while and flick it back on'. Ms Strand said that after such flicking the heater would work for about 20 minutes and then blow cold air. Ms Strand said the tenants used space heaters which they moved around the house with them.
Ms Black also produced photographs of the heater from inside and outside the premises. The photographs showed a hole Ms Black called "big and gaping" next to the heater that went through to the outside, letting cold air in. In her written submissions, (paragraph 19) Ms Black went on to say:
"The hole was so big you could stand on a chair and look straight through to the yard outside. Even if the heater had worked, which it didn't, the hole in the wall let out any heat it would have given off anyway. The other pictures show the heater at the back of the house outside. The 'repairs' that were carried out on the heating look 'dodgy'. There was masking tape wrapped round the heater wires."
Mr Malicek, who house-sat for the tenants in July 2008, wrote in August 2010 confirming that house heater was faulty in 2008 and would work for a few minutes only and then spontaneously switch off. Mr Malicek said that neither changing the thermostat setting nor turning the heating off and on solved the problem. He said he also visited the house on other occasions during both the winters of 2008 and 2009 and the house was always cold.
Ms Black argued that it was the lessor's responsibility to clean the filters at the commencement of the tenancy and the Property Managers had breached their duty, under Clause 54(1)(a) of the standard residential tenancy terms; the tenants should not have had to clean the filters initially. Whilst the heater is mentioned in the Inventory and Condition Report, its condition is not. There was no direct evidence of the condition of the heater at the commencement of the tenancy, other than the email from the owner of the property referred to in paragraph 65 below.
The Property Managers argued that no rental reduction under section 71 of the RT Act or compensation should be ordered. The tenants had occupied the premises for nearly two months before they reported the heating not working. As the system was a reverse cycle system, the tenants most probably would have used the air conditioning part of the system during the initial three months. On the balance of probabilities, the Tribunal finds that there is insufficient evidence to prove that the heater was not working at the commencement of the tenancy.
Ms Black also argued that the Property Managers, as the lessors, had an obligation under Clause 55 (1) of the standard residential tenancy terms to maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the tenancy. As the tenants had notified Property Managers of the heating not working on 30 April 2008 the tenants sought a rental reduction under section 71 (1)(a)(ii) of the RT Act for the period from 1 May 2008 to the end of the tenancy on 15 February 2010 on the basis that the lessor had failed to maintain the heater in a reasonable state of repair for that entire period. The tenants also sought compensation under section 71(1)(c) for interference with the tenants' quiet enjoyment of the premises on the basis that there was interference to their ability to use the premises in reasonable comfort due to the lack of heating for the same period.
The Owner, in his email to the Property Manager dated 16 July 2010 stated he installed a "top of the range reverse cycle air conditioner more than capable of heating and cooling the entire property" in 2006 when he purchased the property. He further said that there were never any issues with the heating /air conditioning at any time prior to the tenants leasing the premises.
The Property Managers argued that no rental reduction under section 71 of the RT Act or compensation should be ordered as they had attended to the heating problems as soon as the tenants reported the problems on 30 April 2008 and had satisfied their obligation under clauses 55 and 59 of the standard residential tenancy terms.
Clauses 57, 59 and 60 of the standard residential tenancy terms set out the lessor's obligation to repair in the circumstances of this part of the cross-claim. Clause 57 provides that a lessor must make repairs (other than urgent repairs) within 4 weeks of being notified of the need for the repairs by the tenants. Clause 60(j) defines a failure or breakdown of any service for heating of the premises as an urgent repair and Clause 59 provides that the lessor carry out urgent repairs 'as soon as necessary' having regard to the nature of the problem.
In Irena Peters v Commissioner for Housing for the ACT [2006] the then Residential Tenancies Tribunal decided that a lessor's obligation to repair under standard residential tenancy terms 54 and 55 is framed in mandatory terms, i.e. the lessor “shall” maintain the premises in a reasonable state of repair. It is therefore not a defence to any landlord to plead that reasonable steps were taken to rectify either patent or latent defects. The test is whether these defects were in fact remedied such as to maintain the premises in a reasonable state of repair.
It appears steps were taken by Property Managers after 20 May 2008, to investigate and seek to repair the heating problems:
a) On 28 July 2008 the Property Managers requested Quality Heating & Cooling to inspect a "noisy fan" in the heating system. 'Matt' from Quality Heating & Cooling orally reported to the Property Managers that there was nothing wrong with the system and that it was operating well. A Tax Invoice of the same date from Quality Heating & Cooling to the Property Managers confirmed that a general service of the system had been undertaken, and that it was operating correctly and well.
b) In July 2009 the owner's brother, Zarko Danilov, visited the property and cleaned the air filters on the heater and emailed the Property Managers to say the heater was working fine and that the tenants must clean the filters every month. There was no evidence that Mr Danilov was a professional heating system repair tradesman.
In all the circumstances of this case the Tribunal is of the opinion that the lessor did breach the obligations to repair within the times under Clauses 55 and 57 of the standard residential tenancy terms. Again, it is not a defence for Property Managers to submit that reasonable steps were taken to rectify the problems with the heating. The test is whether the problems were in fact remedied such as to leave the premises in a reasonable state of repair. They appear not to have been. The photograph of the outside of the heating system dated and tendered by Ms Black showed the pipe leading from the heater was wrapped in masking tape and a significant hole in the wall adjacent to the heater. Ms Black alleged that by standing on a chair inside the premises, she could see through the hole to the outside. This does not indicate thorough and professional repairs being undertaken by the lessors.
However, the tenants also have a duty to mitigate their losses under section 38 of the RT Act by not delaying seeking orders from the Tribunal to the point where a lessor is disadvantaged by the delay. The Tribunal notes that in Fenton, Neist and Baker v. de Andrade [1999]ACTRTT 21 and Watson v. Douglas & Xavier [1999]ACTRTT23 the Tribunal said at paragraph 64 that tenants "ought not...simply (endure) those conditions indefinitely". It is "open to the tenants to apply for orders compelling the lessors to comply with the tenancy agreement and to remedy [the] alleged default which is the subject of this application". The Tribunal further said:
'…. a tenant who permits defects to continue for eleven months, even with constant reminders, is likely to have failed to mitigate their own loss.'
Not only were no formal proceedings commenced by the tenants (as one would expect if cold on the scale being claimed by the tenants was being endured) but apparently there was only sporadic mention of the problem to the Property Managers. No documentary evidence was produced of the 'numerous' continuous complaints to the Property Managers of the heating not working as the tenants pleaded (other than in the tenant's written submissions and Ms Black's statements at the hearing).
The Tribunal finds that the tenants come within the cases of Watson v. Douglas & Xavier and Fenton, Neist and Baker v. de Andrade [1999]ACTRTT 21 in that the tenants allowed the heating failure to continue after 20 May 2008 for approximately 21 months without applying to the Tribunal for an order that the lessor undertake the required repairs. The tenants did not seek to engage a professional heating tradesman attend to fix the heating as they are entitled to do under Clause 61 of the standard residential tenancy terms. The tenants failed to mitigate their own los under section 38 of the RT Act , other than to buy two electric heaters and curtains.
The tenants certainly suffered significantly from cold during the first winter for what the Tribunal has estimated was 12½ weeks and should be compensated for the breach of the lessor's duty to undertake repairs as soon as necessary as required under Clause 59 of the standard residential tenancy terms.
Plumbing Leaks and Water Stains on Ceilings
The tenants submitted that they notified the Ms Kover, Property Managers by email on 5 August 2008 that there were other repairs needed to leaking ceilings and leaks in the kitchen which had caused a bad smell and kitchen drawers to fall down due to the dampness causing rotting. Ms Black stated the tenants were "quite happy to get the drawers fixed". Ms Kover responded two days later advising that the plumbing would be fixed as soon as possible. The Tribunal has already found that the kitchen leaks were from the tenants' cat biting the pipes, and thus were not the lessors' responsibility.
Ms Black argued that Property Managers had an obligation under Clause 57 of the standard residential tenancy terms to make repairs to the leaking pipes within 4 weeks of being notified of the need for the repairs. As the tenants had notified Property Managers of the leaking pipes on 5 August 2008 they sought a rental reduction under section 71 (1)(a)(ii) of the RT Act for the period from 5 August 2008 to the end of the tenancy on the basis that the lessor had failed to repair the water damaged ceilings for that entire period. The tenants also sought a rental reduction under section 71(1)(c) for interference with the tenants' quiet enjoyment of the premises on the basis that there was interference to their ability to use the premises in reasonable comfort due to the damage to the ceilings for the same period.
The Inventory and Condition Report noted all ceilings as coloured white and that there were "no marks" or they were "in good condition". So the stains occurred during the tenancy. The Tribunal finds, as a matter of inference from the leaking pipes dealt with above, that the ceilings were stained from about August 2008 when the leaking pipes were first reported by the tenants to the Property Managers.
As stated above, Clause 57 of the standard residential tenancy terms provides that a lessor must make repairs (other than urgent repairs) within 4 weeks of being notified of the need for the repairs by the tenants. The Tribunal has accepted the explanation given by R & B Solutions that the 'bulk of the water problem is flooding of the laundry when the bath plug is pulled" and that there was most probably "a partial blockage further down the line" which was not fixed until 27 October 2008, the date of the Boss Plumbing Tax Invoice. Thus the leaking pipes took from 5 August 2008 to 27 October 2008, a period of 12 weeks to be repaired.
The Tribunal finds that taking a total of 12 weeks to repair leaking pipes is a breach of the lessor's obligation under Clause 55(1) and the lessor's attempts to fix them prior to 27 October 2008 fall within the ruling in Irena Peters v Commissioner for Housing for the ACT [2006]. Again, it is not a defence to any landlord to plead that reasonable steps were taken to rectify either patent or latent defects. The test is whether these defects were in fact remedied such as to leave the premises in a reasonable state of repair.
The tenants also sought a rental reduction under section 71(1)(c) for interference with the tenants' quiet enjoyment of the premises on the basis that there was interference to their ability to use the premises in reasonable comfort due to the damage to the ceilings for the same period. The Tribunal also finds that the non-repair of the water damaged ceilings until 15 February 2010, after the final tenant Ms Black vacated the premises on 10 February 2010, is a further breach of the lessor's duty to repair given that Ms Black stated that the house damp and smelt during each of the winters.
Rent Increase
Ms Black sought to object to the lessor increasing the rent when the second tenancy agreement was entered into. There is no legal basis on which the tenants could object to entering into a tenancy agreement for an increased rent for the same premises. This part of the tenants' claim is dismissed.
Assessment of compensation to tenants
In these circumstances of this case the Tribunal has determined that the tenants should be compensated for the following:
a) The non-repair of the heating in the premises for the period from 21 May 2008 to 31 August 2008 of the winter of 2008, totalling 12½ weeks. The Tribunal finds compensation is not appropriate for the winter of 2009 as by that time the tenants should have mitigated their loss and either applied to this Tribunal for assistance or should have undertaken the urgent repairs themselves.
b) The non-repair of the leaking pipes from 5 August 2008 to 27 October 2008, a period of 12 weeks.
c) The non-repair of the water damaged ceilings from 5 August 2008 to the end of the tenancy.
section 71 of the RT Act provides the Tribunal with power to order a retrospective rent reduction where the tenants’ quiet enjoyment of the premises has been “diminished significantly” by reason of the landlord’s failure to carry out repairs with the resultant loss of facilities or services in the premises
However, the Tribunal also has power to order compensation in the form a lump sum of money for breach of a term of the residential tenancy agreement (section 104(d)); whereas section 71 requires that there have been a “significant” loss of quiet enjoyment, section 104(d) contains no similar qualification.
As a general rule the Tribunal has tended to utilise section 71 and award compensation by way of rent reduction whilst the tenancy is still in existence, and to use section 104(d) to provide for lump sum compensation where the tenancy has terminated. In the present case the Tribunal proposes to proceed via section 104(d).
The assessment of the appropriate compensation is one for judgement by the Tribunal upon which reasonable minds may differ. In general the Tribunal is guided by reference to decision in comparative cases although is not bound by such cases and must have regard to the particular circumstances of the case in hand. In coming to the assessment of compensation the Tribunal re-iterates its finding of fact that whilst the inconvenience to the tenants was significant the tenants also did not take steps to mitigate their inconvenience in regard to the lack of heating.
The matters to be compensated are listed in paragraph 82. The Tribunal allows compensation for the items listed as follows:
a)$625.00
b)$480.00
c)$300.00
Therefore, the Tribunal orders that the lessors Brogan Prestige Properties pay the tenants the total sum of $1,405.00 compensation under section 104(d).
Finally, section 31 of the RT Act provides that a lessor can deduct from the bond rental arrears and the cost of repairs to the premises as a result of damage caused by a tenant, other than fair wear and tear, and any rent owing. The Property Managers are holding the rental bond refund cheque in the sum of $2800 and this amount must be deducted from the amounts the tenants have been ordered to pay to the lessors.
ORDERS
Based on the above reasons and findings, the Tribunal therefore orders as follows:
1. That the tenants pay to the lessor a total of $6,151.83 made up of the following amounts for the repairs, cleaning, and replacements as indicated:
Ø$1,783.78 rental arrears to 15 February 2010
Ø$758.18 for water consumption during the whole period of the tenancy
Ø$707.37 to replace missing contents
Ø$2,016.00 to replace two couches and to dry clean 6 dining chairs
Ø$374.00 to replace two mattresses and to re-lacquer damager furniture
Ø$512.50 for gardening and rubbish removal
2. The lessors are to deduct the sum of $2,800, the amount of the refunded bond, from the amount the tenants are to pay under Order (1) above.
3. That the lessor's claim for $385 for cleaning during the tenancy is dismissed.
4. That the lessors are to pay the tenants compensation under section 104(d) of the RT Act in the total sum of $1,405 for breach of the obligation to repair the heating, leaking pipes and stained ceilings.
………………………………..
Ms Jennifer David
Senior Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO: RT 10/376
APPLICANT: BROGAN PRESTIGE PROPERTIES
RESPONDENT: Erica STRAND, Samantha BLACK
COUNSEL APPEARING: APPLICANT:
RESPONDENT:
SOLICITORS: APPLICANT:
RESPONDENT:
OTHER: APPLICANT:
RESPONDENT:
TRIBUNAL MEMBER/S:
DATE/S OF HEARING: PLACE: CANBERRA
DATE/S OF DECISION: PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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