Diplome Australia Pty Ltd ACN 106 706 478 v Singh & Anor (Residential Tenancies)
[2021] ACAT 75
•12 August 2021
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
DIPLOME AUSTRALIA PTY LTD ACN 106 706 478 v SINGH & ANOR (Residential Tenancies) [2021] ACAT 75
RT 280/2021
Catchwords: RESIDENTIAL TENANCIES – where tenant is seeking rent reduction as compensation for interference with their quiet enjoyment of the premises – alleged failure of the landlords to attend to urgent and non-urgent repairs during the tenancy – whether a company has capacity to enter into a residential tenancy agreement – definition of ‘home’ – where landlords found to have failed their obligations to maintain the premises in a reasonable state of repair and to action urgent and non-urgent repairs within a timely manner
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 29
Residential Tenancies Act 1997 ss 6A, 29, 47, 71, standard terms 12, 13, 54, 55, 56, 57, 58, 60, 61, 62, 94
Residential Tenancies Act 1997 (Vic) s 7
Unit Titles Act2001
Subordinate
Legislation cited: Residential Tenancies (COVID-19 Emergency Response) Declaration 2020 DI2020-46
Residential Tenancies (COVID-19 Emergency Response) Declaration 2020 (No 2) DI2020-216
Cases cited:Brogan Prestige Properties v Strand & Black [2010] ACAT 60
Halcombe v Hitchman [2018] ACAT 5
Levine v Victorian Student Housing [2007] VCAT 922
Mitchell v Xu [2020] ACAT 110
Re Dickeson and Secretary Department of Social Security [1989] AATA 190
Saleem & Gizgeez v Abeeygunasekara & Jeevanthan [2011] ACAT 9
Withers-Norris v Pastrello - [2016] ACAT 95
Tribunal:Member P Hatami
Date of Orders: 12 August 2021
Date of Reasons for Decision: 12 August 2021
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 280/2021
BETWEEN:
DIPLOME AUSTRALIA PTY LTD ACN 106 706 478 Applicant/Tenant
AND:
HARPHAJANJIT SINGH
First Respondent/Lessor
DALJIT SINGH
Second Respondent/Lessor
TRIBUNAL:Member P Hatami
DATE:12 August 2021
ORDER
The Tribunal orders that:
The respondents pay to the applicant the sum of $9,031.30 and the ACAT filing fee of $1,167 within one calendar month of the date of this decision.
………………………………..
Member P Hatami
REASONS FOR DECISION
Background
The applicant was a tenant of a property owned by the respondents. During the course of his tenancy, he identified a number of urgent and a number of non-urgent issues which required repair at the property. The applicant says that these issues were not promptly addressed by the respondents. This gave rise to a dispute which could not be resolved by the parties on their own. The applicant made an application for the resolution of a tenancy dispute to this Tribunal. This Tribunal reviewed all the material submitted by the parties and heard from both parties in an in person hearing on 16 June 2021. Herein are the reasons given for the decision of the Tribunal.
The residential tenancy agreement (the Agreement) was entered into by the respondents, Harphajanjit Singh and Daljit Singh, and Diplome Australia Pty Ltd.
The Agreement was signed on 17 January 2020 for a property in Belconnen. The tenant took possession of the premises on 21 January 2020. The agreement was initially for a fixed term of 12 months after which it became a periodic tenancy and was still on foot at the date of the hearing on 16 June 2021.
The residential tenancy agreement was entered into in the company name Diplome Australia Pty Ltd. The company’s sole director is John Hadchiti. Diplome was represented at hearing by Mr John Hadchiti.
The property was managed on behalf of the respondents, Mr and Mrs Singh, by real estate agents Independent Property Management ACT (Independent). Independent represented Mr Singh at hearing through Mr Shaan Howman and Ms Kaylee Wang. Mr Singh also appeared in person at hearing.
The application
In the original application to this Tribunal, the applicant sought 100% rent reduction for the duration of his tenancy and the ACAT filing fee as compensation for interference with his quiet enjoyment of the premises resulting from the respondents’ persistent failure to attend to a range of urgent and non-urgent repairs throughout the course of his tenancy. Because this claim would exceed the Tribunal’s jurisdictional limit, the applicant limited his claim to the Tribunal’s jurisdictional limit of $25,000.
In his amended application the applicant reduced his claim to $14,787 comprising of 100% rent reduction for 26 weeks, the ACAT filing fee of $1,167 and the cost of steam cleaning and deodorising carpets for $250.
On the 27 October 2020, the respondents served the applicant with a notice to vacate under clause 94 of the standard residential tenancy terms, schedule 1 of the Residential Tenancies Act 1997 (the Standard Terms). Clause 94 enables a lessor to serve a notice to vacate on a tenant without cause by giving the tenant 26 weeks notice (26 week no-cause notice). If the tenant does not vacate by the end of the 26 week period, the lessor can apply to this Tribunal under section 47 of the Residential Tenancies Act 1997 (the RTA) for a Termination and Possession Order (TPO).
The 26 week no-cause notice was issued on 27 October 2020 and expired in April 2021. The applicant did not vacate the premises and the respondents took no further action in relation to this notice. At the hearing both the applicant and respondents indicated that they intended for the tenancy agreement to continue.
The applicant believes that the 26 week no cause notice issued by the respondents was retaliatory in nature having been issued in response to the maintenance concerns raised by the applicant. This issue does not affect the compensation claim brought by the applicant and may be more appropriately raised in the context of a hearing pertaining to an application for a TPO if such an application is brought on by the respondents.
The issues
The Tribunal must determine the following issues:
(a) Whether the company Diplome Pty Ltd has the capacity to enter into a residential tenancy agreement and thereby enliven the jurisdiction of this Tribunal.
(b) Whether the respondents as landlords met their obligations under the RTA to ensure that the property was in a reasonable state of repair.
(c) Did the respondents’ failure interfere with the applicant’s quiet enjoyment of the property?
(d) What if any compensation should be awarded by way of a rent reduction for this loss.
Can a company enter into a residential tenancy agreement?
Section 6A of the RTA defines what a residential tenancy agreement is in the following terms:
(1) An agreement is a residential tenancy agreement if—
(a)under the agreement—
(i)a person gives someone else (the tenant) a right to occupy stated premises; and
(ii)the premises are for the tenant to use as a home (whether or not together with other people); and
(iii)the right is given for value;
(iii)the right is given for value; and
(b)the agreement is not an occupancy agreement under section 71C.
(2) The agreement may be—
(a)express or implied; or
(b)in writing, oral, or partly in writing and partly oral.
(3) The right to occupy may be—
(a)exclusive or not exclusive; and
(b)given with a right to use facilities, furniture or goods.
(4) This section is subject to the following sections:
·section 6D (Certain kinds of agreements not residential tenancy agreements) section 6E (Certain people given right of occupation not tenants).
…
The language of section 6A is not ambiguous. For a residential tenancy agreement to exist; a person must give someone else a right to use premises as their home and this right must be given for value. The RTA does not define the term ‘home’ and so it must be given its ordinary meaning.
‘Home’ is defined by the Oxford English Dictionary to mean “a place where someone lives permanently, especially as a member of a family or household”.[1] In Re Dickeson and Secretary Department of Social Security [1989] AATA 190 the Administrative Appeals Tribunal (Cth) said that a ‘home’ is :
a place where a person ordinarily eats morning and night, sleeps and is the centre of gravity of one’s domestic life.
[1] Oxford Dictionary (online) ‘home’
In Mitchell v Xu [2020] ACAT 110 this Tribunal added that:
a ‘home’ is somewhere an adult has a degree of security, privacy and autonomy in making decisions concerning their domestic life, akin to the old adage that ‘a man’s home is his castle’.[2]
[2] Mitchell v Xu [2020] ACAT 110 at [44]
A home provides a place for people to live, enabling them to meet their human needs for safety, security and rest. A safe and habitable home enables people to access their fundamental human rights to health, education, employment, privacy and family. A company does not have the same needs as a person and cannot have a 'home’ of the type envisaged by section 6A of the RTA.
Diplome Pty Ltd cannot therefore enter into a residential tenancy agreement for the purposes of the RTA. The language of the section simply does not envisage the use of premises subject to a residential tenancy agreement for any purpose other than for use by a person as a home. Moreover, it was always the intention of the parties when they entered into this agreement that the premises would be primarily used as a home for the director of Diplome, Mr John Hadchiti and one of his associates.
At hearing, the applicant explained that the premises subject to this dispute were initially rented for the following reasons:
(a) to serve as a home for an employee of Diplome Pty Ltd on a full-time basis;
(b) to serve as a home to Mr Hadchiti for 1 to 7 nights per week when he travelled to the ACT for business; and
(c) to carry out business activity in the form of providing a location where Mr Hadchiti could offer samples of the tea and food that his company produced to restaurateurs.
For the duration of the tenancy, the premises were used for the purposes outlined at paragraphs 18(a). and 18(b). However, Mr Hadchiti submitted that due to the repairs issues the subject of this application, he was unable to utilise the premises for the purpose outlined at paragraph 18(c).
On 23 June 2021 the Tribunal received a statutory declaration from an associate of Mr John Hadchiti stating that they had resided at the property in Belconnen on a permanent full-time basis since the commencement of the tenancy. They provided to this Tribunal a copy of their driver’s license, bank statements and a resume, all of which had listed their residential address as being the address of the property in Belconnen. Their bank statement confirmed that they were paying $200 per week in rent to Diplome Pty Ltd. In their statement they articulated the difficulties they had experienced with the repairs issues at the property including leaking of water and debris into the kitchen from the skylight and an offensive smell which prevented them from eating dinner inside the house and opting to use the balcony instead. I will accept this evidence in so far as the objective material demonstrates that the premises were used as a home. However, the material pertaining to the impact of the repairs issues on the second resident were not presented at hearing and the respondent has not had an opportunity to cross examine this witness. Therefore, I will not give weight to this evidence beyond the fact that it demonstrates that another person was living in the premises and using it as their home on a full-time basis.
At the hearing issues were raised by the respondent about a possible breach of the residential tenancy agreement by Mr Hadchiti in sub-letting the property to a third party without the landlords’ consent. The oral evidence at hearing suggested that the respondents’ agents, Independent, were aware that a third party was residing on a full-time basis at the premises and had not previously raised this issue as a concern. Be that as it may, this issue does not affect the current application which is for a rent reduction claimed by the applicant because of the alleged failure by the respondents to carry out repairs in line with his obligations under the RTA.
Mr Hadchiti also attested at hearing and through the correspondence submitted to the Tribunal that he resided at the premises on a weekly basis and used the premises as his ‘base’ in Canberra. The respondents confirmed that the premises had been rented for residential purposes and it was the belief of the respondents that they were being used by Mr Hadchiti for this purpose.
In Levine v Victorian Student Housing [2007] VCAT 922, when interpreting section 7 of the Residential Tenancies Act 1997 (Vic) which is drafted in similar terms to our section 6A, the Tribunal found that a tenant may satisfy the residential purpose test if the tenant intends to sub-lease the premises to another person to use as the other person’s residence in the way this has occurred here. In Levine, Member Proctor stated:
[t]he plain meaning of section 7 is that the Act is to apply if the rented premises are used primarily for residential purposes…no matter whether a tenant or sub-tenant uses it for that purpose.[3]
[3] Levine v Victorian Student Housing [2007] VCAT 922 at [14]
For the reasons outlined here, the Tribunal accepts that the premises were being used as a home by Mr Hadchiti and another person and satisfy section 6A of the RTA in so far as the property was rented to a person to use as a home. It is therefore appropriate for the Tribunal to exercise its power under section 29(5)(a) of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act) to join Mr Hadchiti as an applicant given his clear interest in these proceedings having rented the premises, used them as his home and brought this application in relation to the premises.
By joining Mr Hadchiti as an applicant the Tribunal is empowered to consider this dispute under the RTA being satisfied that when the applicant and the respondents entered into this agreement their intention was at all times that the premises would be used as a home by Mr Hadchiti, and that this agreement was a residential tenancy agreement as described in the RTA and therefore within the jurisdiction of this Tribunal.
The evidence
The applicant took possession of the property on 21 January 2020 and completed his portion of the Entry Condition Report and submitted it to the respondents on 3 February 2020. In the ingoing condition report, the applicant identified numerous non-urgent maintenance issues which had not been identified in the respondents’ section of the Entry Condition Report.
Shortly before the applicant took possession of the property, Canberra was hit by a massive hailstorm that caused significant damage to properties throughout the city, including this property. The hailstorm damaged the skylight to the property causing a severe water leak and damaged the flyscreens on the doors and windows to the property. The flyscreen door which serviced the main glass door to the balcony in the living room was damaged and off its hinges leaning against the wall of the balcony at the time of the Entry Condition Report. There was also damage to the balcony.
The damaged skylight was being attended to by the complex strata managers when the applicant entered into the agreement.
The applicant and the respondents submitted email correspondence to this Tribunal recording the exchanges between the parties, the building strata manager and tradespeople. The parties also submitted invoices, quotes and receipts for repairs pertaining to this property. This material along with the oral evidence and submissions of the parties at hearing tells the story of this landlord and tenant relationship in so far as maintenance and repairs issues were managed by the parties.
The lessor to make repairs
The respondents’ section of the Entry Condition Report for the property was dated 3 February 2020. In the report the issues noted in relation to the maintenance of the property are too many to extract here in full; below are a list of issues that were raised by the applicant in the Entry Condition Report which are relevant to this application:
(a) Ceiling/Cornices – Paint peeling, water stained and other marks and patches.
(b) Walls – Marks, paint peels and damaged in some places.
(c) Screen – Sliding screen door is damaged and falls off the tracks. Now placed against balcony wall. It is useless and I’m chasing flies.
(d) Curtains/blinds – Vertical blinds are broken with many missing pieces and cords don’t synchronise with open and shut actions. I’m really struggling with the heat and the sun.
(e) Curtains/blinds – Many broken pieces and hanging loose.
(f) Rods – Rods don’t work at all. The whole mechanism is out of synchronisation. They need to be replaced NOW. Taking pictures of rods do not tell the true story.
(g) Additional – Owners should have been told to immediate repairs and replacement of defective items to provide reasonable working fittings and fixtures.
(h) Kitchen –
(i)Sink/disposal unit – Stained from water leaks 20/1/2020 hail storm damage with above broken sky light.
(i) Hallway –
(i)Floor – Bad stains everywhere.
(ii)Skirting boards – damaged.
(j) Bedroom 1 –
(i)Curtains/Blinds – Broken cords and damaged vertical blinds.
(k) Bedroom 2 –
(i)Curtains/blinds – vertical blinds are broken.
(ii)Additional – I have been repeating myself again and again. Lazy inspection report from whoever. All walls are marked…
(l) Bedroom 3 –
(m) Screen – Damaged with holes and keeps on falling out…
Clause 54 of the Standard Terms mandates that the lessor provide the premises in a reasonable state of repair at the commencement of the tenancy. Clause 54 provides in part that:
(1) At the start of the tenancy, the lessor must ensure that the premises, including furniture, fittings and appliances (unless excluded from the tenancy agreement), are—
(a)fit for habitation; and
(b)reasonably clean; and
(c)in a reasonable state of repair; and
(d)reasonably secure.
The respondents’ section of the Entry Condition Report suggests that there were a number of repairs required to the property at the outset of the tenancy which affected the functionality of the fixtures, including the curtains and flyscreens. Other issues highlighted by the applicant are more cosmetic in nature such as peeling paint, stained flooring and water damaged walls. Photographs also accompany the Entry Condition Report.
Pursuant to clause 55(1) of schedule 1 of the RTA, standard residential tenancy terms, the Lessor is required to “maintain the premises in a reasonable state of repair, having regard to their condition at the commencement of the tenancy”.
The language of the Standard Terms is unambiguous in so far as it states in mandatory terms that the landlord ‘must’ carry out repairs. Clause 55 and 57 of the Standard Terms articulate these obligations as follows:
55 (1)The lessor must maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the tenancy agreement. (emphasis added)
(2)The tenant must notify the lessor of any need for repairs.
(3)This section does not require the tenant to notify the lessor about anything that an ordinary tenant would reasonably be expected to do, for example, changing a light globe or a fuse.
…
57Subject to clause 55, the lessor must make repairs, other than urgent repairs, within 4 weeks of being notified of the need for the repairs (unless otherwise agreed).
In Withers-Norris v Pastrello [2016] ACAT 95, the tribunal considered decisions of earlier tribunals in relation to clause 55 of the Standard Terms in Brogan Prestige Properties v Strand & Black [2010] ACAT 60 (Brogan) and Saleem & Gizgeez v Abeeygunasekara & Jeevanthan [2011] ACAT 9 (Saleem & Gizgeez) and said:
In Brogan at [68], the tribunal said:
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.
In Salem and Gizgeez at [44] the tribunal said:
The obligation to maintain premises in a reasonable state of repair, imposed by clause 55 of the standard terms on the lessor, is a mandatory obligation that is not diminished by the fact that the need for repairs is due to fault on the part of a third party, or by reliance on a third party to undertake repairs.
‘Shall’ has been replaced with ‘must’, arguably strengthening the protections afforded to a tenant. In Halcombe v Hitchman [2018] ACAT 5, Presidential Member Symons whilst considering the language of the Standard Terms in their current iteration, agreed with this reasoning – that the landlord’s obligations to maintain the premises in a reasonable state of repair are mandatory – the test being whether the defects were actually remedied rather than attempts made to remedy the issues.
The respondents have a legal obligation to maintain the premises in a reasonable state of repair. This includes taking deliberate and active steps to carry out these repairs within the requisite timeframes as articulated by the Standard Terms. Attempts to have the issue repaired are not sufficient.
In this case the applicant complains that both urgent and non-urgent repairs were not attended to in a timely manner, causing interference with his quiet enjoyment of the premises.
Leaks
The applicant reported three leaks to the respondents. The first leak was caused by damage to the skylight during the massive hailstorm in late January 2020, the second leak related again to the skylight after the external skylight had been replaced but the internal skylight continued to cause issues, and the third originated from the air conditioning unit which occurred on 13th of July 2020. I will deal with each of these separately.
The skylight
According to email correspondence, the external skylight was temporarily attended to on 17 March 2020 using tarpaulin, temporarily sealed on 21 April 2020, replaced by 28 April 2020 and the major leaks resulting from the damage rectified. However, some minor leaking continued from the internal skylight until the issue was finally resolved on 11 September 2020 according to the applicant.
At hearing, the applicant said that the leak to the skylight was mostly fixed by the end of February or early March of 2020, but that ‘dribbles’ continued as the internal skylight was not repaired until sometime later following correspondence between the strata manager and Independent over several months. The damage to the internal skylight caused some less serious water leaks which were, according to the applicant finally remedied on 11 September 2020. At hearing, Mr Howman from Independent submitted that they had no evidence to confirm whether the internal skylight had been repaired but the applicant confirmed that the date of final repair was 11 September 2020. His evidence was not challenged by the respondents.
Email correspondence show that Independent contacted the strata manager on 5 May 2020 reporting the issue with the internal skylight and asking for advice on who is responsible for this repair. The correspondence is extracted below:
Tuesday 5 May 2020 10:51 AM
Hi James
Thank you for getting back to me.
The tenant has reported that the internal skylight which is below the external skylight. Can you advise if it is strata’s responsibility or owner’s responsibility to rectify? [sic]
17 June 2020 3:52PM
Hi James Please let us know how you go with all the other hail related damage.
Please also confirm if the internal skylight has been repaired as well.
Looking forward to hearing from you soon,
17 June 2020 4:02PM
Good afternoon Kaylee
It has all been lodged with the insurer and we are finalising quotes before work is undertaken? [sic]
This damage dates back to late January 2020. The correspondence suggests that in June 2020 the respondents were still seeking clarification on who was responsible for the repair. This item was finally repaired in September 2020, some nine months after it was first brought to the attention of the respondents.
Leak around air-conditioning unit and water damaged carpet
On 13 July 2020, the applicant emailed the respondents informing them of a serious leak stemming from the air conditioning unit. At a date in July 2020, Independent contacted the strata manager by email asking them if the leak is landlord’s responsibility or strata responsibility.
An email exchange ensues and the strata investigate the leak, and on 5 August 2020 the strata manager advises Independent that this leak is the owner’s responsibility and not a strata issue. A quote was obtained and approved by the respondents by the end of August 2020. The quote included repair to water damage caused to the wall and ceiling surrounding the leak. According to the respondents’ timeline of events this work was completed by 6 October 2020. However, according to the applicant’s material which included an email from the trade-person who carried out the repairs, the repair was completed on 13 September 2020, two months after it was first reported. A serious leak is classified as an urgent repair under clause 60 of the Standard Terms, requiring rectification within 7 days.
As a result of the leak from the air-conditioning unit, the area below the leak including the carpet, furniture and Television unit were damaged. The applicant reported the damage and the efforts he had made to remedy the situation to Independent in his email dated 13 July 2020. There is no evidence that the respondents inspected the damage referred to in the applicant’s email despite the concerning fact that the power points immediately beneath the leak may have become wet causing a safety concern. The applicant’s email said :
13 July 2020 12:19pm
Hi Kaylee,
Early hours this morning there was further leaks in the lounge room area underneath the air conditioning unit. Water trickled down from ceiling and wall into my t.v. unit and now I'm worried about the power point. I'm heading back to Sydney soon. I’m assessing the damage and I did call my insurance. I cleaned as much as I can and soaked up the water off the carpet using old towel. Left heater running for a while, looks ok. I moved furniture around and won’t be using this particular power point.
Regards,
Diplome Australia p/l
On 1 September 2020 and on 7 September 2020, the applicant contacted the respondents again complaining there was a serious leak from the air conditioning unit every time it rained. This leak continued to cause the carpet to become wet. Part of his email is extracted here:
I’ve calculated the floor space of the lounge-room area and it represents a bit more than 20% of total living space. Please inspect my place and see what type of a mess we are in. Still drying carpet, every time it rains.
No more furniture damage as everything has been shifted to one side. I can’t use my desk nor the use of TV and power points outlets.
...waiting to hear from the Landlords. I have plenty of masks for everyone if you all like to inspect the damage.
According to the applicant, damaged wet carpet continued to be subject to water leaks over the two-month period it took the respondents to remedy the repair. The applicant attempted to dry and clean the wet carpet each time the water leaked into the apartment and complained of an offensive odour emitting from the carpet following repeated soaking. He finally remedied the issue of the carpet odour himself by employing a professional carpet steam cleaner to deodorise and dry the carpet on 13 April 2021.
The flyscreens and screen door
The screen door to the balcony had fallen off its tracks at the date of the Entry Condition Report on 3 February 2020. The flyscreens throughout the property were also damaged and required repair.
Although the flyscreens were ultimately strata responsibility, the correspondence submitted by the respondents show that the strata manager directed the respondents’ agents, Independent, to have the repairs done and to send the strata the invoice for the insurance claim. In this way, presumably expediting a repair where delays were likely given insurance claims were being facilitated by the strata manager for the entire complex:
23 February 2020 2:32PM
Hi James,
So just confirming at the present time it cannot be confirmed if flyscreens will be covered? Just so I have all information before talking with my owner. Thanks,
23 February 2020 2:55PM
Good afternoon Emily,
For fly screens we are advising that the owners have these repaired and the invoice can be sent in to be added to the insurance claim and the insurer will advise if it is being covered.
The evidence suggests that the respondents did not follow this advice and on 1 April 2020 Independent contacted the strata managers again, inquiring about whether strata is responsible for the cost of repair to the flyscreens.
Hi James
Thank you for your email.
I have reported the damage in the previous emails and the other property manager Emily has communicate [sic] with you in relation to this property, please find attached emails.
Can you please confirm if the skylight of the property has been replace [sic]?
We are also wondering if the flyscreens would be covered if you can confirm as soon as you can.
looking forward to heating [sic] from you.
On 28 April 2020 Independent followed up on their email of 1 April 2020 to which they receive the following reply on the same day:
Good afternoon Kaylee
The skylights have all been replaced and we are currently organising quotes for all the other hail related damage.
I understand the fly screens are on the list.
Some eight months later, on 6 October 2020, the respondents obtained a quote to repair the damaged fly screens and the screen door. The issues had not been fully remedied at the date of hearing on 16 June 2021.
Blinds
The respondents submitted a receipt from Canberra Blinds dated 2 June 2020 for repair and replacement of “vertical track to lounge, vertical slats matching as lose [sic] as possible”. The concerns regarding the condition of the blinds were raised by the applicant on 3 February 2020 and to some degree addressed by the respondents on 2 June 2020, four months later. At hearing, the applicant submitted that the blinds still did not operate correctly as the rods were defective, the blinds requiring replacement in their entirety. Though the slats were repaired he was still using a ladder to reach the upper section of the opening and closing mechanism to adjust the blinds about 50% of the time.
Discussion of the evidence
In the view of this Tribunal, the property at the commencement of the tenancy was not in a reasonable state of repair. The material before the Tribunal suggests that in relation to the four main repair issues complained of by the applicant, the respondents generally did not action these repairs within the timeframes articulated by the Standard Terms.
At hearing, Mr Howman of Independent argued that the leak emanating from the skylight into the applicant's premises and the flyscreens were subject to clause 58 of schedule 1 and therefore required the lessor to take all steps necessary to require the owners corporation to make the repairs as quickly as possible. It was their submission that this clause was satisfied through the efforts made by Independent and evidenced through the bundle of email correspondence they submitted to this Tribunal.
Clause 58 imposes a mandatory obligation on the landlord to ensure that repairs to common property governed by the Unit Titles Act2001 are carried out by the owners corporation with some urgency. Clause 58 is extracted here:
If the premises are a unit under the Unit Titles Act 2001, and the tenant’s use and enjoyment of the premises reasonably requires repairs to the common property, the lessor must take all steps necessary to require the owners corporation to make the repairs as quickly as possible.
The skylight damage was causing a severe leak into the applicant’s premises. Although the strata was ultimately responsible for the repair, I do not agree with the submissions that the skylight and the flyscreens were common property and therefore subject to clause 58. Nevertheless, if Independent are correct and the skylight and the flyscreens are classified as ‘common property’ for the purposes of clause 58, this clause requires the lessor to “take all steps necessary to require the owners corporation to make the repairs as quickly as possible”. The clause specifies ‘all steps necessary’, it does not say ‘all reasonable steps’ or ‘steps’. The language of the clause mandates that a level of urgency is adopted by the lessor in pursuing these repairs. In other words, that the lessor must do everything in his power to have the repairs carried out as quickly as possible.
The evidence before this Tribunal suggests that repairs to the external skylight were pursued with a level of urgency by Independent and the repairs were carried out as quickly as possible following a period where the leak was managed until the skylight was replaced.
Although I disagree with Mr Howman that the flyscreens and the skylight were common property for the purposes of clause 58, the response captured in the email correspondence submitted by the respondents in relation to the internal skylight, flyscreens and the issues emanating from the air-conditioner leak nevertheless does not satisfy the requirement in the Standard Terms that the respondents take “all steps necessary to require to owners corporation to make the repairs as quickly as possible”. Indeed, I am more inclined to describe it as failing to take all steps necessary. This inaction and delay in carrying out repairs has caused the applicant loss of enjoyment of his home both in the ongoing repairs issues and the stress and frustration he has experienced in following up these repairs.
A landlord cannot abrogate their responsibilities under clause 55 to a third party such as strata or trades-people even where the repairs are covered by the strata insurance or already delegated to trades-people. The landlord is ultimately responsible for the maintenance of his property and cannot use delays caused by a third party as a means to relieve himself of this responsibility. If the third party is taking too long to action the repairs, the landlord ought to step in and have the repairs done some other way and invoice the third party where that is appropriate, thereby ensuring that the tenant’s enjoyment of the property is not affected by the delays of a third party who is not a party to the residential tenancy agreement.
The residential tenancy agreement is between the landlord and the tenant; the landlord cannot ignore his obligations under this agreement to carry out repairs within a specified timeframe, where he has elected to engage a third party to have the repairs carried out.
Mr Howman also argued that the delays in actioning repairs were compliant with the Residential Tenancies (COVID-19 Emergency Response) Declaration 2020 DI2020-46 (the declaration). I assume that he was referring to Clauses 12 and 13 of that declaration which were in effect from 22 April to 21 July 2020 and later extended to 22 October 2020 by a further declaration.[4] Clauses 12 and 13 of the declaration provide that:
[4] Residential Tenancies (COVID-19 Emergency Response) Declaration 2020 (No 2) DI2020-216
12 Restricted access to premises
(1) A lessor under a residential tenancy agreement may only physically access the premises—
(a)with the tenant’s consent; or
(b)to do urgent repairs to the premises; or
(c)if the lessor applies to the ACAT—in accordance with an order by the ACAT.
(2) Unless the parties to a residential tenancy agreement otherwise agree or the tenant vacates the premises, any inspection of the premises that the lessor must or may do under the Act or the agreement may only be done by audio‑visual or other electronic means without the lessor physically accessing the premises.
(3) Subsection (2) does not apply if the tenant fails to provide reasonable assistance to the lessor to enable the virtual inspection to be done.
13 Non-urgent repairs
(1) For clause 57 of the standard residential tenancy terms, the lessor must do the non-urgent repair within a reasonable period as agreed with the tenant.
(2) For subsection (1), in deciding what is a reasonable period regard must be had to—
(a)the nature of the repair; and
(b)the extent of access required to the premises to do the repair; and
(c)the hardship suffered by the tenant by the repairs not being done.
The language of clauses 12 and 13 anticipate a collaborative process between the landlord and the tenant whereby agreement is reached about the timeframe within which non-urgent repairs will be carried out, with the goal of maximising social distancing. There is no evidence that the reason for the delays here have anything to do with the respondents’ adherence to social distancing requirements. The reason or the delays are clearly set out in the email correspondence submitted by the respondents. They are largely as a result of the respondents’ agents not following up requests for repairs, deferring to strata and not following up their queries with strata in a timely manner. There is at no point any mention made of social distancing requirements and their impact on the repairs being carried out.
The first respondent Mr Singh submitted at hearing that he had little visibility over the repairs at the property as he had nominated Independent as his agents. He said that he was only aware of one repair issue which he authorised within two weeks. He appeared genuinely surprised about the turn of events and the inconvenience suffered by the applicant. Be that as it may, the respondents as the landlords are responsible for maintaining the property in a reasonable state of repair. They have entered into a residential tenancy agreement with the applicant and for payment of rent they are required to provide the premises in a reasonable state of repair and act on repairs within a defined timeframe. Having nominated Independent as their agents, they are thereby liable for Independent’s actions as they relate to their property.
Claim for rent reduction
The applicant’s claim for the loss of amenity and damage to property caused by the maintenance issues outlined above arises under sections 71(1)(a)(ii) and 71(b) of the RTA, which I set out in full:
71 Reduction of existing rent
(1) On application by a tenant, the ACAT must order a reduction in the rental rate payable under a residential tenancy agreement if it considers that the tenant’s use or enjoyment of the premises has diminished significantly as a result of any of the following:
(a)the loss or diminished utility of an appliance, furniture, a facility or a service supplied by the lessor with the premises as a result of—
(i)the withdrawal of the appliance, furniture, facility or service by the lessor; or
(ii)the failure by the lessor to maintain the premises and any appliance, furniture or facility supplied with the premises in a reasonable state of repair, having regard to their condition at the commencement of the residential tenancy agreement; or
(iii) the failure by the lessor to provide and maintain the locks or other security devices necessary to ensure that the premises are reasonably secure;
(b)the loss of the use of all or part of the premises;
(c)interference with the tenant’s quiet enjoyment of the premises or the tenant’s ability to use the premises in reasonable peace, comfort and privacy by the lessor or anyone claiming through the lessor or having an interest in, or title to, the premises.
(2) To remove any doubt and for subsection (1), a tenant’s quiet enjoyment of premises is interfered with if there is substantial interference with, or a significant lessening of freedom in exercising, the tenant’s rights.
(3) A reduction in the rental rate ordered under subsection (1)—
(a)takes effect from the day the tenant’s use or enjoyment of the premises diminished, or the later date that the ACAT specifies; and
(b)remains in force for the period, not longer than 12 months, specified by the ACAT.
(4) The ACAT may order a lessor to pay to the tenant the difference between the rent paid and the rent payable as a result of an order for a rental rate reduction.
(5) Any purported increase in the rental rate in relation to premises for which a reduction order is in force is void and any amount paid above and beyond the reduced rental rate in accordance with a purported increase is a debt owing by the lessor to the tenant.
In summary, the effect of section 71 of the RTA and clauses 55, 56 and 57 of the standard residential terms (set out below) is:
(1)The tenants have the right to the quiet enjoyment of the property. This includes the right to reasonable comfort within the property.
(2)The owners have an obligation to maintain the property to a reasonable state of repair, having regard to the condition of the property when it was initially leased to the tenants.
(3)The owners have an obligation to undertake any necessary non-urgent repairs, (including faulty blinds, damaged flyscreens and screen door and water damaged carpets) within four weeks (clause 57 of the standard residential terms).
(4)The owners have an obligation to carry out these repairs if it was not caused by the negligence or wilful act of the tenant (clause 56 of the standard residential terms).
(5)The applicant can claim for the loss of amenity if the respondents breached (a) to (d) above and they can prove “the tenant’s use or enjoyment of the premises has diminished significantly”.
Tenant’s obligation to mitigate loss
The applicant had a responsibility to report maintenance issues and where the repairs were urgent and the landlord could not be contacted, he could have had the repairs carried out in strict compliance with clauses 61 and 62 of the Standard Terms and in this manner mitigate any loss. However, the circumstances of the applicant do not fall within the ambit of clause 61 because the respondents were contacted and undertook to have the urgent repairs carried out. Clause 61 does not require a tenant to take steps to have an urgent repair done if the landlord has undertaken to have the repair done.
The applicant consistently reported maintenance issues to the respondents as soon as they arose. He did not have an obligation to attend to non-urgent repairs in the manner prescribed by clauses 61 and 62, however, he did attend to the issue of the water damaged carpet himself several months after the damage had occurred and the odour of the carpet persisted, apparently having given up hope of having the issue addressed by the respondents.
The amount of compensation
Both leaks
The leak resulting from the damaged skylight and the leak coming from the air conditioning unit are urgent repairs for the purposes of clause 60 of the Standard Terms and therefore require action within 7 days. The less severe leaks emanating from the skylight after the external skylight was replaced, the flyscreens, the screen door, the damaged blinds and the water damaged carpet all fall within the non-urgent category of repair requiring action within 4 weeks. The respondents did not comply with any of the timeframes prescribed by the Standard Terms in carrying out repairs. For this reason, the applicant has sought compensation and this Tribunal has determined that compensation is warranted in the circumstances.
The applicant has sought 100% rent reduction for a 26-week period and the filing fee, totalling $14,787. The applicant paid rent on time throughout his tenancy. The rent paid is consideration for the use of premises kept in a reasonable state of repair. When the applicant became a party to a residential tenancy agreement, he became subject to obligations and a suite of protections encompassed in the RTA and the standard residential tenancy terms contained in schedule 1 of the RTA.
The applicant fulfilled his obligations as a tenant by paying his rent on time throughout the course of his tenancy and in looking after the premises and keeping them clean. For his part, he has paid approximately $36,630 in rent up until the date of the hearing.
The respondents have failed in their main obligation to the tenant; to ensure that the property is in a reasonable state of repair and that the applicant’s quiet enjoyment of the property is not interfered with. The applicant has sought rent reduction to compensate him for the failures of the respondents to maintain the property. I agree with the applicant that his rent ought to be reduced to compensate him for the loss of quiet enjoyment of his home and the associated stress and frustration he has experienced in convincing the respondents to fulfill their obligations to maintain the premises. I will deal with each item and the corresponding rent reduction below.
Urgent repairs
The external skylight leak and the air-conditioning unit leak were both urgent repairs requiring action within 7 days. The external skylight leak was identified by Independent prior to the commencement of the tenancy agreement with the applicant, and the email correspondence submitted by the respondents suggests that the external skylight was replaced by April 2020.
The evidence suggests that tarpaulins were used to deal with the immediate issue of leaks and the skylights properly replaced some weeks later. The evidence submitted suggests that Independent followed up this issue as a matter of urgency and the repairs were completed as quickly as they could be. The applicant did not seek a rent reduction for this issue, and I am not inclined to award it, given everything that could have been done was done to minimise inconvenience to the applicant in relation to this issue.
The evidence submitted shows that the air-conditioner leak was reported by the tenant on 13 July 2020 via a detailed email and, according to the respondents’ timeline of events, repaired by the respondents on 6 October 2020 and, according to the applicant’s evidence, it was repaired on 13 September 2020. I prefer the applicant’s evidence here as it is in the form of an email confirmation from the trade-person who carried out the repair.
The leak from the air conditioner was an urgent repair which should have been carried out within 7 days. It affected the applicant’s quiet enjoyment of his home, damaged his personal property and the delays and persistent following up on the part of the applicant (which are evident in the correspondence) show that this issue caused the applicant a great deal of inconvenience, stress and frustration. Water entered the applicant’s home on several occasions while the air conditioner remained damaged, causing him inconvenience in cleaning and drying the carpet and even after the leak had been fixed, the unpleasant odour of the carpet resulting from the prolonged period of wetness was a major source of discomfort for the applicant until he took matters into his own hands and had the carpets steam cleaned.
Although the property was habitable, the main living area which also served as the applicant’s study was unusable and the entire property was unpleasant to live in because of the constant leak and carpet odour. The delay in having this issue dealt with was mostly informed by Independent deferring to the strata manager to find out who was responsible for the repair and not following this up quickly, within the first week. Ultimately, this issue was not strata responsibility. I reiterate that repairs to a rental property are the landlord’s responsibility. The Standard Terms are clear on the timeframes within which these need to be carried out.
There is simply no excuse for failing to have this urgent repair dealt with quickly and within the requisite 7-day period prescribed by the Standard Terms. It took nine weeks for this urgent repair to be rectified. I will award the applicant 70% rent reduction for the 8 weeks which follow the 7-day time frame required by the RTA to remedy a serious leak. From 20 July 2020 to 13 September 2020, 70% rent reduction for 7 weeks is $2,425.50.
Non-urgent repairs
Leak and falling debris from the internal skylight were identified on 21 January 2020 and finally repaired on 11 September 2020, 33 weeks later. The debris and water leak caused the applicant discomfort and interfered with his enjoyment of the property. There is no evidence to suggest that beyond the debris and the minor water leaks, that any damage was done to the applicant's personal property by this issue. But it did render the premises uncomfortable, interfering with his enjoyment of the property, as well as causing him stress and frustration in chasing up repairs. I will apply a rent reduction of 10% for 29 weeks for this issue, having allowed 4 weeks for a non-urgent repair to be completed by a lessor, and award $1,435.50 for this issue.
The carpets became wet beneath the air conditioning unit on 13 July 2020 when the leak coming from the air-conditioning unit first occurred and continued to be damaged every time it rained until the air conditioner leak was fixed on 13 September 2020. There is evidence of email communication between the applicant and Independent, informing them of the damage on 13 July 2020 and raising the issue on at least two further occasions in September. The applicant submitted at hearing that the carpet had an offensive odour as a result of the prolonged period of water damage, causing the apartment to become unpleasant to live in. The smell of the carpet was finally remedied by the tenant himself who in his oral evidence at hearing submitted that having given up hope that the respondents would attend to this issue, he had the carpet steam cleaned on 13 April 2021.
The water damage resulted in interference with the enjoyment of the lounge room area which also served as the applicant’s home office. The odour caused by the water damaged carpet affected the enjoyment of the entire property. Although it did not render the property uninhabitable, it certainly caused the applicant distress and loss of enjoyment of his home. The applicant calculated that the lounge room comprised of 20% of the total surface area of the apartment. The damage to the carpet was not addressed by the respondents for 39 weeks. Indeed, it was the applicant who rectified this issue. I will award a rent reduction of 20% for 35 weeks (allowing for the 4-week timeframe to action a non-urgent repair) $3,465, plus $250 being the cost of the steam cleaning of the carpet, totalling $3,715.
The damage to the blinds included broken slats in bedrooms as well as the living room. The rod which controls the opening and closing of the blinds was repaired but according to the applicant only works about 50% of the time. The broken slats and faulty rod were reported to the respondents with the ingoing condition report on 3 February 2020 and repaired on 2 June 2020. The rod which adjusts the blinds in the living room was also repaired but still from time to time it requires adjustment. The blinds were not repaired for 17 weeks. Allowing 4 weeks for actioning of a non-urgent repair, I will award rent reduction of 2% for the loss of the amenity of the blinds for 13 weeks (allowing for 4 weeks for repair of non-urgent repairs), totalling $128.70.
The flyscreens throughout the property were damaged by the hailstorm in January 2020 and the sliding flyscreen door to the main living area was off its hinges and leaning against the wall as of 3 February 2020 until at least the date of the hearing, 16 June 2021. The strata manager advised Independent to have the issues repaired and to send the invoice to the strata to lodge with the insurance claim. However, at the date of hearing the flyscreen door remained off its hinges and there was no evidence submitted to show that all of the fly screens on the other windows in the property had been repaired. The main loss of amenity with these items relates to the sliding flyscreen door which could not be used, causing the applicant inconvenience. There is no evidence to suggest that the condition of the door affected the security of the property. This issue was not resolved for 71 weeks. Allowing 4 weeks for a non-urgent repair to be carried out, I will award the applicant rent reduction of 4% for 67 weeks, totalling $1,326.60.
Conclusion
The respondents have failed to comply with their obligations under clauses 54, 55, 56 and 57 of the Standard Terms to maintain the property in a reasonable state of repair and have failed to take action for urgent or non-urgent repairs within the timeframes stipulated by the Standard Terms. This failure has caused the applicant significant loss of enjoyment of the property and stress and frustration in continually following up repairs with the respondents’ agents. The delays in actioning repairs were caused predominantly by the respondents’ inaction and the respondents’ default process of seeking strata input on repairs, then failing to follow up promptly or failing to have the issue repaired and then seeking reimbursement from the strata where the issue was strata responsibility. I find these delays unnecessary and avoidable.
A landlord cannot abrogate his responsibilities under the RTA to strata or the owners corporations or anyone else not party to the agreement. The Standard Terms are clear on the obligations of a landlord in so far as repairs are concerned. It is a mandatory obligation that must be met by the landlord regardless of any delays caused by third-party actors. It is always an option for a landlord to action urgent repairs and subsequently seek reimbursement if it is strata responsibility, particularly when the repair is not in a common area, as was the case here.
Where the landlord has engaged a third party to carry out the repairs, the obligation for the repair does not shift to that third party. The tenant has a right to expect that repairs are carried out within the legislative timeframes. The landlord’s relationship with the third party does not affect the landlord’s obligations to the tenant.
For the reasons given herein, I order that the respondents pay to the applicant the sum of $9,031.30 plus the ACAT filing fee of $1,167 within one calendar month of the date of this decision.
………………………………..
Member P Hatami
| Date(s) of hearing | 16 June 2021 |
| Applicant: | Mr J Hadchiti , authorised representative |
| First Respondent: | Ms K Wang and Mr S Howman, authorised representative |
| Second Respondent: | Ms K Wang and Mr S Howman, authorised representative |
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