v C Tran Family Trust v Herbert (Residential Tenancies)
[2024] ACAT 29
•30 November 2023
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
V C TRAN FAMILY TRUST v HERBERT (Residential Tenancies) [2024] ACAT 29
RT 946/2023
Catchwords: RESIDENTIAL TENANCIES – rental bond dispute – opportunity to rectify outstanding items at end of tenancy –unauthorised access by cleaners – whether premises were left in substantially the same condition such to fair wear and tear – compensation for gardening costs, cleaning and damage to stove cooktop - tenant right to equitable set-off for unauthorised deduction of money from bank account
Legislation Cited: Residential Tenancies Act 1997 ss 29, 30, 63, 64, 65, Schedule 1
Cases Cited: Bell & Bell v Boccola, Campbell & Lawrence [2009] ACAT 26
Goldsmith v AMP Life Limited [2021] QCA 20
Haddad v Castillo [1997] NSWRT 16
Tankard & Anor v Ogbonna & Anor [2017] ACAT 72
Waddington & Khoury-Harb v Covell & Lee [2012] NSWCTTT 135
Tribunal:Member E Morrison
Date of Orders: 30 November 2023
Date of Reasons for Decision: 25 January 2024
Date of Publication: 03 May 2024
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 946/2023
BETWEEN:
V C TRAN FAMILY TRUST
Applicant/Lessor
AND:
INDI HERBERT
Respondent/Tenant
TRIBUNAL: Member E Morrison
DATE:30 November 2023
ORDER
The Tribunal orders that:
ACT Rental Bonds on behalf of the Territory is directed to release $342.20 of the disputed sum to the lessor and the remainder to the tenant.
The Tribunal notes:
The parties will contact ACT Rental Bonds to provide their respective bank details. Ph: (02) 6207 0028.
………….……………
Member E Morrison
REASONS FOR DECISION
Background
This is a rental bond dispute arising under the Residential Tenancies Act 1997 (RT Act).
The applicant (lessor) is the owner of a property in Fisher in the ACT (the property).
The respondent (tenant) was the tenant at the property from September 2014 to September 2023.
The hearing
The hearing was conducted on 30 November 2023.
Both parties filed submissions and evidence prior to the hearing. The tenant and the lessor’s representative also gave oral evidence at the hearing under affirmation.
The Tribunal considered all this material and evidence and gave its decision with oral reasons at the conclusion of the hearing. These written reasons confirm that decision and reasons.
Factual background
On or about 20 September 2014, the lessor entered into a residential tenancy agreement with the tenant for a fixed term of 12 months. An ingoing condition report was prepared and dated 20 September 2014. The tenant paid a bond of $1,580 and the full amount was still held by ACT Rental Bonds at the date of the hearing.
Between 2014 and 2023, the tenant signed new residential tenancy agreements approximately every 12 months. Ingoing and outgoing condition reports were not prepared for each lease, but routine inspections were conducted.[1]
[1] Transcript of proceedings dated 30 November 2023, pages 4-5
The tenant vacated the property on 19 September 2023 and returned the keys.
The lessor’s agent conducted final inspection on 20 September 2023. The tenant did not attend the inspection and did not take issue with it being conducted in her absence.
After the inspection and on the same day, the lessor's agent contacted the tenant via email providing a list of items requiring rectification. The parties corresponded by email. A copy of the outgoing condition report (with photos) was sent to the tenant later that day. The parties agreed during the hearing that the lessor had previously agreed to give the tenant a three day “grace period” to rectify any outstanding issues, which would have given the tenant until 22 September 2023 to attend to them.[2]
[2] Transcript of proceedings dated 30 November 2023, pages 13, 15-16
On 21 September 2023, the lessor's agent arranged for cleaners to attend the property. The cleaners cleaned three bedrooms before being asked to stop work so the tenant could inspect the premises and attend to the cleaning herself.[3] The tenant attended the property on 22 September with the lessor's agent. They walked through the house and identified what cleaning and repairs needed to be done. The tenant gave oral evidence at the hearing that she stayed back to clean as much as she could.[4]
[3] Transcript of proceedings dated 30 November 2023, page 17
[4] Transcript of proceedings dated 30 November 2023, pages 16-17
After 22 September 2022, the lessor's agent conducted a further inspection and determined that additional cleaning and gardening was still required. The lessor’s agent asked the cleaners to come back and finish the job.
The lessor’s claims
The lessor claimed that the final inspection identified:
(a)the property was not left in substantially the same state of cleanliness as at the commencement of the tenancy, and was not left “clean and tidy” for the new tenants;
(b)damage to the garden beyond fair wear and tear, including overgrown vegetation and weeds; and
(c)damage to the stove cooktop that went beyond fair wear and tear, notably a crack running across the cooktop and a large chip on the front corner.
The lessor’s evidence consisted primarily of the ingoing and outgoing condition reports (which contained photos), email correspondence between the lessor’s agent and the tenant, cleaning and gardening invoices, and evidence provided by the lessor’s representative at the hearing.
The lessor’s claim filed with the tribunal for a total of $2,410.43, being:
(a)$280 for gardening;
(b)$1,144 for cleaning;
(c)$770 to replace the stove cooktop; and
(d)$216.43 as three days’ rent for the period from 19 to 22 September 2023.
During the hearing, the lessor revised its claim to be as follows:
(a)$280 for gardening;
(b)$1,144 for cleaning; and
(c)$275 as compensation for damage to the stove cooktop,
and advised that the lessor did not wish to pursue its claim for outstanding rent.[5]
The tenant’s position
[5] Transcript of proceedings dated 30 November 2023, page 7
The tenant agreed she was responsible for some, but not all, of the cleaning costs. She disputed the gardening costs on the basis that the garden was left in substantially the same condition as the premises were at commencement of the tenancy in 2014.
The tenant agreed the damage to the stove cooktop was not “fair wear and tear”. She submitted that the parties had been in discussion about repair or replacement in 2020 and 2021 but no agreement was reached. The tenant submitted that $275 compensation claimed by the lessor would be an improvement to the premises, given the age of the cooktop and its depreciated value. She also raised concerns that $275 had been direct debited from her bank account in or about September 2023 without authority but noted the transfer was subsequently reversed.[6]
The issues in dispute
[6] Transcript of proceedings dated 30 November 2023, pages 22-23
There were three issues in dispute:
(a)Issues 1 and 2: In relation to cleaning and gardening, did the tenant leave the premises in substantially the same condition as at the commencement of the premises subject to fair wear and tear. If not, what is an appropriate amount of compensation payable to the lessor in respect of returning the property to an equivalent condition; and
(b)Issue 3: In relation to the cooktop, is the tenant liable to compensate the lessor for damage that is not fair wear and tear and if so, what is the amount of compensation payable.
The Tribunal did not consider any claim for outstanding rent.
Legislative framework
The Standard Residential Tenancy Terms (Standard Terms) are provided at Schedule 1 to the RT Act. Clause 63 of the Standard Terms provide that:
During the tenancy, the tenant must –
(a) not intentionally or negligently damage the premises or permit such damage; and
(b) notify the lessor of any damage as soon as possible; and
(c) take reasonable care of the premises and their contents, and keep them reasonably clean, having regard to their condition at the time of the commencement of the tenancy and the normal incidents of living.
Under clause 64 of the Standard Terms, a tenant must leave the premises:
(a) in substantially the same state of cleanliness, removing all the tenant’s belongings and any other goods brought onto the premises during the duration of the tenancy agreement; and
(b) in substantially the same condition as the premises were in at the commencement of the tenancy agreement, fair wear and tear excepted.
Clause 65 of the Standard Terms states that:
The lessor must not require the tenant to make alterations, improvements or renovations to the premises.
Section 30 of the RT Act provides that an ingoing condition report is evidence of the condition of the premises at the start of a tenancy.[7] Where a new tenancy agreement is entered into with the same landlord and tenant for the same premises, the original ingoing condition report will continue to apply in lieu of a new report being prepared at the beginning of the renewed tenancy.[8]
The ingoing condition report and what is “fair wear and tear”
[7] Provided the process in section 29 of the RT Act has been followed
[8] Waddington & Khoury-Harb v Covell & Lee [2012] NSWCTTT 135
The parties agreed that despite signing several 12‑month leases, the only ingoing condition report created for the tenancy was in September 2014 when the tenant first moved in. This means the state of cleanliness and condition at the commencement of the tenancy for the purpose of section 64 of the Standard Terms is based on the 2014 ingoing condition report, and the Tribunal’s assessment of what is “fair wear and tear” is based on a nine-year tenancy.
Fair wear and tear generally relate to damage or deterioration that happens through the ordinary day-to-day use of a place by a tenant and by operation of natural forces.[9] This is different to negligent or careless use of the premises for which the tenant is liable. It is an objective test that takes into account the duration of the tenancy.[10]
Issue one: The cleaning
[9] Bell & Bell v Boccola, Campbell & Lawrence [2009] ACAT 26
[10] Haddad v Castillo [1997] NSWRT 16
The lessor provided a cleaning invoice provided by Blue Cleaning Group dated 21 September 2023 for an amount of $1,144. The invoice contained many items that were not individually costed. The lessor also relied on photos taken during the final inspection on 21 September 2023, which is before the tenant conducted further cleaning on 22 September.
The tenant agreed during the hearing that she was responsible for cleaning costs relating to the windows, tiled floors, sink surface area, oven, laundry and studio.[11] The lessor agreed that cleaning costs relating to the three bedrooms should not be passed on to the tenant on the basis that the cleaning was undertaken during the three day “grace period” and before the tenant had an opportunity to rectify any issues.[12]
[11] Transcript of proceedings dated 30 November 2023, pages 40-47
[12] Transcript of proceedings dated 30 November 2023, page 39
The remaining items related to the garden shed, light fittings, curtains, fireplace, bathroom exhaust and heat fans, door handles and skirting boards.
In considering these items, I compared items claimed in the cleaning invoice against the 2014 ingoing condition report, the 2023 outgoing condition report and photos taken by the tenant on 22 September 2023. I also considered oral evidence given during the hearing.
Based on the evidence provided to the Tribunal, I was not satisfied:
(a)that the remaining items to be in any substantially different condition to their condition at the beginning of the tenancy in 2014; and
(b)even if an item was in a different condition, that any different condition was not fair wear and tear.
The tenant submitted that the lessor had not properly mitigated its loss because the cleaning quote was higher than two other cleaning quotes the tenant had obtained. The lessor submitted that different cleaners have different standards.
On balance, I found that the tenant is responsible for 30 per cent of the cleaning costs incurred by the lessor on the basis that this represents fair compensation for the areas of the property that were not left in substantially the same condition or state of cleanliness as at the beginning of the nine-year tenancy and were not “fair wear and tear”.
The tenant is ordered to pay compensation of $342.20 to the lessor for cleaning costs.
Issue two: The garden
The lessor claimed that the garden was not left in substantially the same condition as at the commencement of the tenancy and that the damage was not fair wear and tear. The lessor provided an invoice from Ironbark Garden Services, dated 28 September 2023, for $280.
In considering the gardening costs, I took into account the descriptions and photos of the garden and outdoor areas provided in the 2014 ingoing condition report against the descriptions and photos provided in the 2023 outgoing condition report.[13]
[13] Transcript of proceedings dated 30 November 2023, pages 32-35
The items claimed by the lessor were documented in the 2014 ingoing condition report and appear to have been present at the commencement of the tenancy. These were weeds, untidy garden, patchy grass, a missing hose fitting, ivy growing over the fence, straggly shrubs, a dirty Alconite cover to the pergola and paint chips on the back railing. I was not satisfied on the evidence provided to the Tribunal that the condition of the garden was in a substantially different condition as the premises were in at the commencement of the tenancy in 2014.
The tenant is not ordered to pay compensation costs for gardening.
Issue three: The stove cooktop
A crack first appeared across the stove cooktop in 2020. It grew during the remaining tenancy period through everyday use of the cooktop.[14] The tenant submitted that she did not know how the crack first appeared. It is possible that these cracking events were fair wear and tear but neither party provided evidence in support or against this.
[14] Transcript of proceedings dated 30 November 2023, page 19
A Dutch oven was dropped on the cooktop in 2021 causing further damage and exacerbated the crack. The parties agreed during the hearing this damage was not fair wear and tear.[15] However, the tenant advised that all four hotplates on the stovetop were working properly when the tenancy ended, and that the oven located below the cooktop was a separate unit and did not need to be replaced.[16] The lessor did not disagree with these submissions.
[15] Transcript of proceedings dated 30 November 2023, pages 19, 26
[16] Transcript of proceedings dated 30 November 2023, pages 27-28
Both parties submitted evidence that the tenant and lessor’s agent had discussed repair or replacement of the cooktop but did not agree on how much the tenant should pay.
The lessor’s initial claim was an estimated full replacement cost of $1,110, which was revised to a replacement cost of $770 and then a depreciated value of $425.
The lessor did not provide evidence about the make, model, age or functionality of the cooktop at the beginning of the tenancy. Instead, the lessor provided a print-out of a cooktop that could be purchased online and which the lessor proposed to purchase as a replacement for $698.[17] The cost of the proposed alternative cooktop did not include an oven. At the hearing, the lessor’s representative mentioned there would also be labour costs associated with replacing the cooktop but the lessor would be happy to accept $275.[18]
[17] Tribunal document 9
[18] Transcript of proceedings dated 30 November 2023, page 29
Kitchen appliances, such as cooktops, deteriorate over time as a consequence of fair wear and tear. Tax deductions for depreciation are available in recognition of that fact. This means that even if the cooktop has to be replaced as a consequence of damage caused by the tenant, it needs to be valued by reference to its age at the time of replacement rather than the cost of replacement.[19] This is consistent with clause 65 of the Standard Terms which provides that a lessor must not require a tenant to make improvements to the premises.
[19] Tankard & Anor v Ogbonna & Anor [2017] ACAT 72
The parties agreed that the lessor leased the property to the tenant with the cooktop in place. This means it was at least 9 years old at the end of the lease. An email from the lessor's agent to the tenant dated 5 September 2023 set the age of the cooktop at 12 years at the end of the lease. In the absence of evidence from either party showing a different age, I accepted that the cooktop was 12 years old at the end of the lease.
I also accepted the tenant’s evidence and submissions that $275 was direct debited from her bank account without authority to do so, notwithstanding the transfer was reversed at the tenant’s request before the money showed up in the lessor’s agent’s bank account.[20]
[20] Transcript of proceedings dated 30 November 2023, pages 23-24
In quantifying the appropriate level of compensation payable for the cooktop, I took into account:
(a)the estimated age of the cooktop at the end of the lease, being 12 years;
(b)the 2023 depreciation schedule set by Federal Commissioner for Taxation, which sets a 12-year depreciation lifetime for cooktops in a leased residential property;
(c)the limited evidence provided by the lessor about the estimated value of the cooktop at the beginning or the end of the tenancy having regard to its make, model and age; and
(d)the tenant’s right to equitable set-off against any compensation for which she is liable due to the deduction of money from her account without authorisation.[21]
[21] Goldsmith v AMP Life Limited [2021] QCA 20
On balance, I decided that the tenant is not liable to pay compensation for damage to the cooktop.
Conclusion
The tenant is ordered to pay $342.20 to the lessor being 30% of the cleaning costs incurred by the lessor at the end of the tenancy.
………………………………..
Member E Morrison
| Date of hearing: | 30 November 2023 |
| Applicant: | Ms L Bates, authorised representative |
| Respondent: | In person |
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