Patrick Fegan -v- Danny & Gordana Beljanski

[2007] ACTRTT 13

Patrick Fegan -v- Danny & Gordana Beljanski  ACTRTT13 [2007]

CATCHWORDS
Abandonment by tenant during fixed term – Compensation to lessor moving into the premises

LEGISLATION
Residential Tenancies Act 1997 (ACT)

Sections 61 and 62 

Clause 84 Standard Residential Terms

CASE LAW

CASE REFERENCE NUMBER:   RT 70 of 2007

RE: Premises at 5/83 Mortimer Lewis Drive, GREENWAY, ACT 2900

DECISION

ORDERS

1.That the tenant/s is to pay the lessor the sum of $800.00 being compensation for:

a)Abandonment during a fixed term under Section 61 of the Residential Tenancies Act 1997

2.That the abovementioned amount is to be paid within 28 days.

Member:       Jennifer David
Date:           28 February 2007

STATEMENT OF REASONS

BACKGROUND

1    On 20 April 2006 the parties entered into a residential tenancies agreement in relation to premises at 5/83 Mortimer Lewis Drive, Greenway in the Australian Capital Territory for a fixed term of 12 months to 19 April 2007.

2    The lessor sought compensation from the Tribunal under section 62 of the Residential Tenancies Act 1997 (the Act) on the basis that the tenants had abandoned the premises on 25 January 2007.   The lessor decided to move into the premises himself but was unable to do so prior to 10 February 2007 as he had to give formal notice to his own lessor.  The tenant refused to pay rent from 25 January to 9 February 2007 on the basis the lessor had been given oral notice in November and December 2007 of the tenants’ intention to vacate in late January/early February 2007 though the final date was not confirmed by the tenants until the undated written notice was given which was received by the lessor’s Property Manager on 11 January 2007. 

3    In the Statement of Particulars in the Application the lessor’s Property Manager stated:

“I … advised the owner that the tenants will be vacating the property and we will need to advertise as soon as possible as the tenants are breaking their lease and are responsible for the rent and property until a suitable tenant is found.  The owner advised me not to proceed with the advertising at that stage as he may return to the property and would advise me.  Mr Fagan contacted me on 15 January 2006 and advised that he will be returning to the property but is unable to take occupation until 10 February 2007, as he was required to give formal notice to his current lessor.  I then proceeded to contact Mr and Mrs Beljanski to advise that we will not be advertising for new tenants and they will need to pay rent up to and including 9 February 2007 and the break lease fee was waivered (sic).  Mr Beljanski confirmed this conversation over the phone and I proceeded to confirm in writing.

After Mr and Mrs Beljanski received the advice confirming the check out time, date and rent owing he contacted me to advise he will not be paying up to 9 February 2007 he will only pay to the day that they vacated being 23 January 2007 (this date was then changed to 24 January 2007 due to removal delays).   I advised Mr Beljanski that even though the owner was moving in they were breaking the lease and were required to pay rent until 9 February 2007.  Mr Beljanski then proceeded to say that they gave sufficient notice (5 weeks) and that had been plenty of time for the owner to organise himself or to find a new tenant.  I advised Mr Beljanski that I only received formal notice  11 January 2007 and acknowledge (sic) that Mrs Beljanski advised that they will be moving after the New Year but at the time she could not confirm a firm date (Late January early February).  I asked Mrs Beljanski on a number of occasions to put it in writing once they have (sic) a firm date.” 

4    At the hearing the Property Manager confirmed the above, including that she had consistently advised the notice had to be in writing.  The tenant Mr Beljanski said the lessor and/or the Property Manager had advised Mrs Beljanski in both December 2006 and early January 2007 not to bother about giving written notice.  The tenant also said the lessor had failed to advertise the property for rent and that , had he done so, the state of the property market in Canberra meant that the premises could have been leased immediately.  He offered to pay $350 for breaking the lease.

5    At the hearing on 28 February 2007 the Tribunal determined the tenants should pay compensation of $800 to the lessor under section 62 of the Act. Note the relevant section has been amended from section 61 to section 62 under the “slip rule”.

6    On 28 February 2007 the tenants’ representative requested this Statement of Reasons.  The Tribunal apologises that due to an oversight the recording of the proceedings was not received for almost 7 weeks, hence the time taken to provide these Reasons. 

Documentary Evidence

7    The lessor submitted the following documentary evidence:

·      Statement of Particulars

·      Residential tenancy agreement dated 20 April 2006 together with endorsed clauses

·      Undated letter giving notice of intention to vacate with box “Received 11/1/07”.

·      Guidelines for Tenants Vacating Premises and Tenants Final Inspection Check List

·      Refund of Bond Form

8    The tenants did not submit documentary evidence.

FINDINGS AND REASONING

Applicable Law

9 Section 62 of the Act provides:

62 Abandonment during fixed term

(1) If a tenant abandons premises before the end of a fixed term agreement, the former lessor may apply to the tribunal for the following compensation:

(a) compensation for the loss of the rent that the former lessor would have received had the agreement continued to the end of its term;

(b) compensation for the reasonable costs of advertising the premises for lease and of giving a right to occupy the premises to another person.

(2) On application, the tribunal may award compensation of the kind mentioned in subsection (1) (a) and (b).

(3) The amount of compensation the tribunal may award—

(a) under subsection (1) (a) must not exceed an amount equal to 25 weeks rent; and

(b) under subsection (1) (b) must not exceed an amount equal to 1 week’s rent.

(4) In deciding the amount of compensation that may be awarded under subsection (2) in relation to costs, the tribunal must have regard to when, apart from the abandonment of the premises —

(a) the agreement would have ended; and

b) the lessor would have incurred the costs mentioned in subsection (1) (b).

10    The lessor is not claiming the costs of advertising the premises. He is claiming compensation of $800 under section 62 (1)(a) representing the loss of rent for the premises from the day after the rent was paid to: that is from 25 January 2007 to 9 February 2007 inclusive.

11    Whilst the Tribunal was sympathetic to the tenant’s argument given the circumstances enumerated above, the tenants had not in fact given final notice until the undated letter received by the Property Manager on 11 January 2007.  The evidence from both sides was that the tenants had given notice that they intended to vacate at an unspecified date at the end of January or early February 2007.  Prior to the written notice the lessor had insufficient certainly of the date the premises would be vacant to give formal notice under his residential tenancy agreement for the premises he was occupying.  He apparently gave formal notice under his residential tenancy agreement after receiving the written notice and was able to occupy the subject premises within 4 weeks.   He thus complied with the general duty to mitigate under section 38 of the Act.

12    The lessor’s Property Manager stated that she advised the tenants on a “number of occasions” of the requirement to give formal written notice.  The fact that the tenants gave the notice that was received on 11 January 2007 demonstrates that they were aware of that requirement.  

13    The Tribunal carefully considered the wording of section 62(1)(a) of the Act: that the lessor can apply for “compensation for the loss of the rent that the former lessor would have received had the agreement continued to the end of its term” and is of the opinion that the lessor would have received the rent until the end of the tenancy on 19 April 2007. The fact that the lessor did not move into the premises until his own notice to vacate in relation to the premises he was occupying had expired does not negate the effect of section 62 (1)(a) as he could not give formal notice himself until he was made aware of a final certain date the tenants were to vacate the premises. That did not occur until 11 January 2007.

14    Therefore, the Tribunal determined that the tenants were to pay compensation under section 62 of the Act representing the amount of lost rent from 25 January to 9 February 2007. This is calculated as 2 weeks and 2 days at a weekly rental of $350 per week, amounting to $800.00. The Tribunal ordered accordingly.

ORDERS

1.That the tenant/s is to pay the lessor the sum of $800.00 being compensation for:

a)Abandonment during a fixed term under Section 61 of the Residential Tenancies Act 1997

2.That the abovementioned amount is to be paid within 28 days.

Jennifer David

Member

26 April 2007