Wild v Wild & Anor (Residential Tenancies)
[2022] ACAT 29
•5 April 2022
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
WILD v WILD & ANOR (Residential Tenancies) [2022] ACAT 29
RT 831/2021
Catchwords: RESIDENTIAL TENANCIES – termination of a periodic lease by one of two co-tenants
Legislation cited: Residential Tenancies Act 1997 ss 35A, 35G
Tribunal:Senior Member A Anforth
Date of Orders: 5 April 2022
Date of Reasons for Decision: 5 April 2022
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 831/2021
BETWEEN:
LUKAS WILD
Applicant/Tenant
AND:
RACHEL WILD
First Respondent/Tenant
STEVEN ROBINSON
Second Respondent/Lessor
TRIBUNAL:Senior Member A Anforth
DATE:5 April 2022
ORDER
The Tribunal finds that:
The applicant ceased being a co-tenant on 6 September 2021.
The Tribunal orders that:
The first respondent is to pay the applicant the sum of $286.25 forthwith.
………………………………..
Senior Member A Anforth
REASONS FOR DECISION
The applicant and the first respondent were married and then separated. During the course of the marriage, they entered a residential tenancy agreement with the second respondent as the lessor. On separation the applicant left the premises, but the first respondent remained in possession. The applicant now seeks to have his name removed from the tenancy agreement.
The tenancy agreement was entered on 19 March 2019 for a period of 12 months with the applicant and first respondent as co-tenants. A bond of $4,400 was paid in equal shares which remains with ACT Rental Bonds.
There was an open wood fireplace and chimney in the house. During the co-tenancy the applicant inserted an enclosed combustion fired box and modified the chimney. There was no consent to this modification and at the end of the tenancy it was not restored to its original condition.
On 5 May 2021 the Federal Circuit Court, inter alia, noted that that the applicant had agreed to pay the rent of the premises, albeit that this notation was not legally binding. On 17 August 2021 the applicant’s solicitor advised the first respondent’s solicitor that he no longer intended to make these rent payments.
On 16 August 2021 the applicant left the premises. He emailed the lessor and asked to have his name removed from the tenancy agreement. On the same day the lessor’s agent responded:
Once you get the consent from Rachel and have signed the bond transfer form please return it to us so we can sign it for your and lodge with the Office of Rental bonds. Once this transfer has been completed, we will remove your name as a co-tenant on the agreement.
On 18 August 2021 the lessor’s agent emailed the first respondent and told her of the applicant’s request. The lessor’s agent attached the relevant consent forms. There then ensured a series of rent arrears letters from the lessor to both tenants.
On 14 September 2021 the applicant lodged a claim with the Tribunal to have his name removed from the tenancy agreement and to recover his share of the bond. It was listed for conference on 20 October 2021.
On 30 September 2021 the lessor’s agent emailed the applicant and said that the lessor no longer consented to his removal from the tenancy agreement because of the rent arrears and fire box issues.
On 13 October 2021 the agent for the lessor, lodged with the Tribunal a copy of a notice of termination for rent arrears of $6,702, dated 12 October 2021 and addressed to both tenants.
On 20 October 2021 the matter did not settle at the conference, and orders were made for the filing of evidence and submissions on the law. On the same day the lessor served a notice to remedy for rent default in the sum of $3,510.57 which appears to be dated 20 October 2021. The applicant in turn gave the lessor further written notice of his intention to vacate the premises on 12 November 2021, notwithstanding that he had already vacated on 16 August 2021.
On 21 October 2021 the lessor served a notice to remedy for the fire box issue.
On 10 November 2021 the applicant filed submissions.
At the hearing on 3 December 2021 the applicant appeared in person, the first respondent appeared by Brigitte Smithies, solicitor, the second respondent appeared by his real estate agent, Leah Bates. All appeared by telephone. The Tribunal pointed out that the co-tenancy had become periodic on 18 March 2020. The applicant gave notice to the lessor and his co-tenant on 16 August 2021 and vacated on the same date. Therefore, the co-periodic tenancy ended on 6 September 2021 and it was not apparent what utility the present application served.
Orders were made affording the parties the opportunity to respond to the propositions of law put by the Tribunal and for the lessor to particularise the bond claim.
There was a joint bond with the ACT Rental Bonds. The lessor was making a claim on that joint bond for damage caused during the period of the co-tenancy. There was no rent arrears and the applicant accepted responsibility for the fireplace issue.
On 14 December 2021 the lessor filed particulars of the claim he made against both tenants for damage occurring during the co-tenancy, which was:
(a)Cleaning of property $1,248.50
(b)Carpet cleaning $1,320
(c)Window cleaning $420
(d)Fumigation $TBA
(e)Replacement of missing fire grate $419
(f)Chimney cleaning $TBA
(g)Replacement of missing metal fireplace backing $TBA
(h)Replacement of broken led light window in the front door $TBA
(i)Removal of white board in the garage and making good the wall $TBA
(j)Water Consumption $TBA.
Quotes and invoices were attached. No further particulars were provided thereafter in respect of the ‘TBA’ items.
The lessor sought orders that the property be returned in the condition in which it was let, minus fair wear and tear, and that the applicant remove and dispose of the illegal combustion box from the fireplace, restore the chimney and make good consequential damage. The lessor sought water consumption from the applicant to the end of his tenancy.
Neither of the tenants filed any submissions.
Legislation
Section 35A of the Residential Tenancies Act 1997 states:
(1) A co-tenant (the leaving co-tenant) may stop being a party to a residential tenancy agreement only—
(a)with the consent of the lessor and each remaining co-tenant under the agreement; or
(b)by order of the ACAT under section 35G (1) (a) or (d).
(2) For subsection (1) (a), the leaving co-tenant must seek the consent of the lessor and each remaining co-tenant—
(a)by notice in writing (the consent application); and
(b)at least 21 days before the day the leaving co-tenant intends to stop being a party to the residential tenancy agreement (the proposed leaving day).
(3) The lessor and each remaining co-tenant—
(a)if the proposed leaving day is during the term of a fixed term agreement—may refuse consent whether or not it is reasonable to do so; but
(b)if the residential tenancy agreement is a periodic agreement on the proposed leaving day—must not unreasonably refuse consent.
(4) For subsection (1) (a), the lessor and a remaining co-tenant is taken to consent if—
(a)they do not respond to the leaving co‑tenant within 21 days after receiving the consent application; and
(b)in the circumstances mentioned in subsection (3) (b)—they do not apply to the ACAT, within 21 days after receiving the consent application, for an order under section 35G (1) (b) or (2) (a) to refuse consent.
(5) If consent is given to the leaving co-tenant stopping being a party to a residential tenancy agreement—
(a)the agreement continues between the lessor and the remaining co-tenants; and
(b)the leaving co-tenant’s rights and obligations under the agreement end.
(6) For subsection (5), a co-tenant stops being a party to a residential tenancy agreement on—
(a)the proposed leaving day or any other day agreed between the parties; or
(b)if the ACAT makes an order mentioned in subsection (1) (b)—the day stated in the order.
In the present case sub-sections 35A(3)(b) and 4(b) apply and both the lessor and the first respondent/co-tenant are taken to have consented to the termination of the co-tenancy on 6 September 2021. Neither the lessor nor the co-tenant made any objection within the statutory time period and neither lodged any application with the Tribunal seeking orders to prevent to termination of the co-tenancy.
Section 35G(1) of the Residential Tenancies Act 1997 relevantly provides:
On application by a co-tenant under a residential tenancy agreement, the ACAT may—
…
(e) make any other order in relation to an order mentioned in paragraphs (a) to (d) that the ACAT considers appropriate.
Examples—par (e)
1 order for payment of a co-tenant's share of utility costs
2 order for payment of reasonable costs for damage caused to premises by a co-tenant
No issue has been taken by the tenants with the items of the lessor’s claim that have been particularised. Putting to one side the firebox issue, for which the applicant accepted full responsibility, the remaining claims total $2,988.40 and so each tenant owes half of this amount, namely $1,494.25.
In addition, the applicant owes $419 for the firebox claim.
Following the enactment of section 35A of the Residential Tenancies Act 1997 the law appears to be:
(a)The starting point is that the remaining tenant i.e. in this case the first respondent, is to pay the departing tenant their share of the bond.
(b)The remaining tenant is entitled to withhold from the above payment the amount owed by the departing tenant for their share of rent arears, damage to the premises and the like.
(c)Then the remaining tenant is then responsible in full for any liability incurred to the lessor i.e. the Second Respondent, to be accounted for at the end of the remaining tenant’s lease.
In the present case this translate as follows:
(a)The applicant is prima facie entitled to a refund of $2,200 from the first respondent.
(b)From this amount the first respondent is entitled to withhold $1,494.25 for the applicant’s half of the rent and repairs accrued to the date of the end of the joint lease and the $419 for the firebox which is solely the applicant’s costs, giving a total of $1,913.25.
(c)This leaves a refund owing from the first respondent as the remaining tenant to the applicant of $286.75.
(d)Upon the payment of this refund to the applicant, the remaining tenant i.e. the first respondent, owns the entirety of the bond in ACT Rental Bonds but remains solely responsible for any claim by the lessor arising from either the ended co-tenancy and her ongoing sole tenancy.
(e)The lessor must wait the termination of the ongoing sole tenancy of the first respondent before making any bond claim.
On this understanding of the law, the only orders required are:
1.The applicant ceased being a co-tenant on 6 September 2021.
2.The first respondent pay the applicant the sum of $286.75 forthwith.
The state of law summarised about does appear to give rise to some anomalies:
(a)The quantum of the claim by the lessor in this case did not include a range of items that may feature in any final claim against the remaining tenant at the end of her sole tenancy. Because these items where not quantified by the lessor in the present claim, they were not included in the bond adjustments between the co-tenants. The result is that the remaining tenant may suffer a prejudice at the end of her sole tenancy by virtue of being held solely responsible for these existing but unquantified claims by the lessor.
(b)Query the situation if the present lessor had declined to make and quantify any losses in the present matter, as they were entitled to do.
(c)If the departing tenant pays money to the remaining tenant, the remaining tenant may spend any money paid. The remaining tenant does not have to account to the lessor for that money.
(d)The lessor’s sole recourse at the end of the remaining tenant’s sole tenancy, is the bond and any capacity of the remaining tenant to make good any claim beyond the bond. The lessor has lost the additional security of the capacity of the departing tenant to make good any claim over the bond. The remaining tenant may be entirely impecunious.
(e)Under the law as it stood before the enactment of section 35A, the lessor was entitled to make and resolve any bond claims arising from the co-tenancy at the end of the co-tenancy, which gave access to the security of the bond and the capacity of both tenants to make good any claim over the bond. Any excess of bond was distributed or credited to the tenants in their assigned proportions. Then the remaining tenant would commence a new sole tenancy with their own bond and be solely responsible for any claims made by the lessor against them arising during the sole tenancy.
It is not clear to the presently constituted Tribunal that the statutory amendments have not given rise to a potential unfairness to the first respondent and the second respondent in this case.
………………………………..
Senior Member A Anforth
| Date(s) of hearing: | 3 December 2021 |
| Applicant: | In person |
| Solicitor for First Respondent: | Ms B Smithies, Brigitte Smithies & Associates |
| Second Respondent: | Ms L Bates, Authorised Representative |
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