Lynette MARLOW -v- Karen COE
[2007] ACTRTT 2
•24 January 2007
Lynette MARLOW -v- Karen COE ACTRTT2 [2007]
CATCHWORDS
ISSUES
LEGISLATION
Residential Tenancies Act 1997 (ACT)
CASES CITED
CASE REFERENCE NUMBER: RT 2157 of 2006
RE: Premises at 8 Southwood retreat BONYTHON ACT 2905
DECISION
ORDERS
The orders of 23 November 2006 are set aside.
The tenant is liable to the lessor to pay an amount of $670.80 being compensation for damage to premises.
The lessor has received an amount of $2180 in rental payments from the tenant, which was not reflected in the rental schedule tendered at the hearing of 4 August 2006. The tenant has overpaid rent in the amount of $758.43.
The lessor is to pay the tenant the amount of $87.63, being the difference between the amount of overpaid rent [$758.43] and the compensation payable by the tenant [$670.80]
The Residential Tenancies Tribunal notes that the bond of $1360 has been released to the tenant and makes no further order.
Member: Jann Lennard
Date: 24 January 2007
REASONS FOR DECISION
BACKGROUND INFORMATION
The Applicant lessor, Lyn Marlow and the Respondent tenant Karen Coe entered into a residential tenancy agreement in relation to premises at 8 Southwood Retreat, Bonython, ACT on 16 June 2004. The agreement was for a fixed term of 24 months, which expired on 15 June 2006. Rent was at the rate of $340 per week. The tenant paid a security bond of $1360.00 and this was lodged by QRE .
1.1.The RTT received as part of the application an unsigned copy of that agreement.
1.2.Mr Allan Bellert, Property Manger, QRE – Property, represented the lessor in negotiations and execution of the agreement.
The tenant vacated the premises and the tenancy terminated on 28 June 2006.
On 12 July 2006 the lessor, through her agent QRE made an application for orders for compensation for arrears of rent in the amount of $1457.13 and compensation for costs of repairs to premises in the sum of $2378.52.
The matter as heard on 4th August 2006. The tenant appeared in person and Allan Bellert represented the lessor.
The lessor’s application included, inter alia, a copy of the Tenancy Agreement, Copy of all correspondence between QRE and the tenant, a copy of the QRE Rent Ledger, showing arrears of $1475.13, copies of the Condition Report and Final Exit Report, photographs of damage to the premises and invoices relating to the repair of that damage.
The copies of correspondence between QRE and the tenant, as tendered by the lessor raises several matters of concern. While many of these are issues which go beyond the issues in contention in this matter, the RTT is concerned that a Licensed Real Estate Agent should engage in conduct which so manifestly evidences a lack of understanding of, and compliance with, the provisions of the Residential Tenancies Act 1997.
6.1.The letter of 10 June 2004 from QRE to the tenant and headed “INFORMATION” indicates that “It is a requirement of tenancy that the following issues are addressed PRIOR TO commencement of the Residential Tenancy Agreement: …
3. Lease Fee (for documents) $20.00
This is a contravention of s15 of the Residential Tenancies Act 1997 (ACT) which provides …
Rent or a bond only
(1) In consideration for giving a tenant a right to occupy premises, a lessor may only require or accept rent or a bond.
(2) A lessor must not require or accept any consideration for—
(a) agreeing to enter into, extend or renew a residential tenancy agreement; or
(b) agreeing to the assignment or transfer of a tenant's rights and obligations under a residential tenancy agreement; or
(c) consenting to a tenant entering into, extending or renewing a residential tenancy agreement with a subtenant; or
(d) vacating premises; or
(e) giving a tenant a key to premises; or
(f) informing a tenant about the availability of premises for occupation under a residential tenancy agreement.
Further Clause 7 of the Standard terms provides: The lessor bears the cost of preparation and execution of this tenancy agreement.
6.2.The letter dated 28 June 2004 from QRE to the tenant is headed REMINDER OF PROCEDURES and states
Dear Karen,
As the first Fortnight of occupancy shall be next Thursday, 1 July, 2004 it is IMPORTANT that issues of RENTAL BOND residual payment ($860.00)+normal Fortnightly Rent of $680.00 is addressed on that date.
Also, as previously discussed, ‘direct debit’ to QRE’s Trust Account is the ‘normal mode’ of Rental payments: would you please organise this issue, with a COPY of documentation for QRE’S File.
From that point, QRE can ‘consummate’ the Residential Tenancy Agreement and organise a prompt Condition Report: whilst these issues are normally required to be finalised prior to the commencement of any Tenancy Agreement; however, some latitude has been given to both parties.
The evidence before the RTT was that the tenacy had commenced on 16 June 2004 when the tenant commenced occupation of the premises. It is not clear to the RTT what QRE would do to consummate the Agreement, but the letter carries an implication that the tenancy is either not in existence or able to be terminated for failure to organise a direct debit. The RTT notes that at this stage QRE had not provided a copy of a condition report. Section 29(1) provides:
(1) A lessor must, not later than the day after the tenant takes possession of the premises, give the tenant 2 copies of a report about the state of repair or general condition of the premises, and of any goods leased with the premises, on the day the tenant is given the report.
The RTT further notes that the Condition Report provided as evidence to the RTT is signed by the lessor’s agent and dated 31 May 2004.
6.3.Letters from QRE to the tenant and dated 7 July and 29 July 2004 each state that ‘ at point of this letter a formal Residential Tenancy Agreement does not exist’ and the letter of 29 July concludes ‘please RESPOND to QRE as soon as possible, otherwise QRE shall have no other option than to bring the proposed –agreement to an end immediately.’ Although at the time of writing of these letters the tenant was in arrears of rent and the RTT can understand QRE’s desire to have that remedied, these letters display a total lack of knowledge of the creation of a Tenancy Agreement and the processes set out in the legislation for remedy of breaches or to bring about a valid termination of a Tenancy Agreement.
6.4.The Notices to Remedy issued by QRE on 8 February 2005, 15 February 2005, & March 2005, 23 March 2005 and 16 May 2005 are invalid. They do not comply with the requirements of Clause 92 [set out below] in that they do not contain a statement that if the tenant pays the rent outstanding to the date of payment within 7 days of the date of service of the notice to remedy, no further action must be taken and the tenancy continues; and, the tenant is given only 2 or 3 days to remedy the breach.
Termination for failure to pay rent
92 The tribunal may order the termination of the tenancy and eviction of the tenant on the ground of non-payment of rent in the following circumstances:
(a) rent has been unpaid for 1 week. The first day of this period concludes at midnight on the day when the unpaid rent was due;
(b) the lessor has served a notice to remedy on the tenant for the failure to pay the rent, being a notice—
(i) served not earlier than 1 week after the day when the rent was due; and
(ii) containing a statement that if the tenant pays the rent outstanding to the date of payment within 7 days of the date of service of the notice to remedy, no further action must be taken and the tenancy continues;
(c) if all rent is not paid within 1 week of the date of service of the notice to remedy—the lessor may then serve a notice to vacate on the tenant requiring the tenant to vacate the premises within 2 weeks of service of the notice to vacate;
(d) no earlier than the date when the notice to vacate is served, the lessor may apply to the tribunal for an order terminating the tenancy and evicting the tenant;
(e) the tribunal hearing of the application to terminate and evict must not be earlier than the end of the period specified in the notice to vacate;
(g) during any tenancy in which the lessor has previously issued 2 notices to remedy, the lessor may serve a notice to vacate 1 week after the day when the rent has fallen due without serving a notice to remedy.
THE CLAIM FOR COMPENSATION FOR COST OF REPAIRS TO PREMISES
The application by the lessor set out the claim for $2378.52 compensation for damages to the premises as follows:
SUMMARY OF OUTSTANDING COSTS
Property Damage $632.72
Electrical Repairs $85.80
Repairs/replace Screens $360.00
Kitchen Bench Top Repair (estimate) $1000.00
Damaged Carpet Repair (estimate) $300.00
The RTT received oral evidence from both the tenant and Mr Bellert, as well as the following documentary evidence:
2.1.Inventory Report dated 31 May 2004 signed by QRE but not by the tenant and as evidenced by the correspondence sent by QRE to the tenant not supplied to the tenant in accordance with the requirements of the Act.
2.2.Exit Condition Report dated 15 June 2006. This report was prepared by QRE and is the report dated May 2004 annotated with comments as to the state of the premises on the date of vacation.
2.3.Letter from QRE to the tenant, dated 16 June 2006. This letter sets out a number of issues to be addressed by the tenant. The majority of the issues to be addressed concern cleaning of the premises and tidying of the garden.
2.4.Invoices:
2.4.1.Buddy’s Painting and Decorating for repairs to walls, painting, cleaning and garden maintenance in the amount of $632.72;
2.4.2.Morton Electrical Services for replacement of a bedroom light in the amount of $85.90;
2.4.3.Regional Screens and Window Services for the supply of 4 screens and the repair of 3 screens in the amount of $396.00
2.5.Photographs showing 3 cigarette burns on the carpet of the main bedroom and scratches to the surface of the kitchen bench top.
At the hearing the applicant amended the claim and did not press for the cleaning costs as set out in the invoice from Buddy’s. After examining the above evidence and hearing from both parties the RTT determined that the tenant was liable to pay an amount of $670.80 to the lessor in compensation for damage to the premises as follows:
Repairs to closet door $40.00
Patching of walls $25.00
Garden Maintenance $100.00
Replacement of bedroom light $85.80
Repair of flyscreens $120.00
Damage to carpets $150.00
Damage to bench top $150.00
RENTAL ARREARS
The lessor’s application contained a QRE Rent ledger stated to represent the rent account as at 14 July 2006. The first entry was dated 1 July 2005 and the final entry was dated 28 June 2006. The final entry indicates that the payment of $696 made on 28 June 2006 paid rent until 10 May 2006, with $327 ‘in hand’.
At the bottom of the ledger was written:
PAID to 16 May, 2006 – FINAL DAY 15 June, 2006
-ie. 30Days in Rental Arrears x $48.571Daily Rate
=TOTAL RENTAL ARREARS - $1457.13
This ledger was tendered by the lessor as evidence of the amount of rent arrears owed by the tenant.
The tenant gave evidence that she had made two payments between the 28 of June and the hearing date: $380.00 on 26 July and $320 on 27 July 2006. In support of this the tenant produced to the RTT deposit books for QRE’s account. The tenant also queried the ledger as presented by QRE as she had receipts and deposit slips for other payments made during the period covered by the ledger, but not recorded as paid.
The evidence before the RTT was incomplete and it was evident that there was a discrepancy between the amount paid by the tenant and the amounts recorded as paid by QRE. The RTT therefore adjourned the matter for a written decision and ordered the lessor to supply a complete rental schedule for the entire period of the tenancy by 18 August 2006. The applicant had not made out the claim for arrears and after much contradictory and confusing evidence it appeared that the tenant had probably paid in excess of $1000 more than was reflected in the rent schedule.
QRE supplied to the RTT a copy of the rent schedule for the entire tenancy period, with the first entry being dated 10 June 2004 and the final entry dated 31 July 2006, which indicated that after some adjustment the tenant had paid rent to 21 June 2006 with $147 in hand. The last 4 entries are dated 31 July 2006 and in an accompanying letter these are described as incorrect tenant transactions. The final QRE also supplied a copy of their trust account statement.
The RTT made a comparison between the deposit books supplied by the tenant and the rent schedule and bank statements as supplied by QRE. This examination revealed that the deposit books and the banks statements showed five payments which were not recorded by QRE. Four of these deposits are contained in the bank statement and there appears to have been a misapplication of these payments to the wrong tenant/lessor. This appears to be an error on QRE’s part not by the bank concerned. The fifth entry is recorded in the deposit book, but the RTT was not supplied with a corresponding bank statement. The payments not recorded in the rent ledger totalled $1480.00. The RTT made orders on 23 November 2006 as follows:
…
3. That the lessor is to pay an amount of $1294.90 to the tenant within 7 days of the date of this Order.
4. That the Office of Rental Bonds is directed to release $1360 to the tenant forthwith.QRE wrote to the RTT on 29 November 2006 of the amounts contained in the order. On 15 December 2006 the RTT replied setting out an explanation of the amounts. On 11 January 2007 QRE sent a letter to the RTT attached to that letter were three pages of rent schedule. The final page of rent schedule includes a hand written annotation. This annotation asserts that five of the final six entries (each of which were added by QRE after the original hearing) are credit reversals. That is, these reflect the five payments made by the tenant but not recorded by QRE during the course of the tenancy, and are not as the RTT understood from the correspondence received from QRE in response to the original orders, payments made on 31 July 2006. A typed red ink annotation states:
Please note, the above CREDIT REVERSALS are the entries to which our correspondence refers; these credit reversals were a requirement after investigations revealed five (5) CBA banking errors, dated 30.06.2004, 2.07.2004, 30.07 2004, 19.05.2006 and 2.06.2006,ALL of which required ‘credit reversals’ and as indicated on the above Rent Ledger (dated 31.07.2006).
From this correspondence it appeared that the RTT has ‘double counted’ the missing payments. Therefore the RTT, in the light of the explanation given by QRE made a comparison between the deposit books, the bank accounts and the revised rental schedule. The rental schedule provided by QRE at the hearing of 4 August 2006 did not record the following payments, to a total amount of $2180, made by the tenant:
9.1.1.30 June 2004 $320
9.1.2.2 July 2004 $240
9.1.3.30 July 2004 $320
9.1.4.19 May 2006 $300
9.1.5.2 June 2006 $300
9.1.6.26 July 2006 $380
9.1.7.27 July 2006 $320
10. The rent schedule presented at the hearing shows the tenant had paid rent to 10 May 2006 with $327 in hand. If these missed payment and the amount in hand [$2507] are added to the rent schedule at the rate of $340 per week this would bring the rent to 28 June 2006 with $127 in hand. The final date of the tenancy was 15 June 2006 and therefore the tenant has overpaid rent by $758.43.
11. The RTT notes that on the handwritten annotations to the final page of the revised rent schedule supplied on 11 January 2007 Mr Bellert appears to have reversed the amounts paid on 26 and 27 July 2006 and to have attributed the payment shown as having been made by the tenant on 26 July to a credit reversal for the payment of 30 June 2004. Thus the payment of $320 made on 30 June 2004 is still not recorded in the rent schedule.
ORDERS
The orders of 23 November 2006 are set aside.
The tenant is liable to the lessor to pay an amount of $670.80 being compensation for damage to premises.
The lessor has received an amount of $2180 in rental payments from the tenant, which was not reflected in the rental schedule tendered at the hearing of 4 August 2006. The tenant has overpaid rent in the amount of $758.43.
The lessor is to pay the tenant the amount of $87.63, being the difference between the amount of overpaid rent [$758.43] and the compensation payable by the tenant [$670.80]
The Residential Tenancies Tribunal notes that the Bond of $1360 has been released to the tenant and makes no further order.
Jann Lennard
Member
Date 19 February 2007
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