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Benchmark - Real Estate Cases & Commentary
Tenancy matters
    •  Moisture and mould
        -  Provision of inadequate exhaust fans a breach of obligation to repair and maintain
        -  Claim for property damage by tenant
        -  Fitness of premises for habitation
        -  Existence of mould problem in question

Provision of inadequate exhaust fans a breach of obligation to repair and maintain premises 

The tenants under a Residential Tenancy Agreement sought compensation and an order for the refund of excessive rent, because they said that the landlord had failed to properly maintain or repair the residential premises and because they said that they had suffered a reduction in goods, services and facilities arising from that failure.

The application was sent to conciliation with a Registrar-Conciliator, however this was unsuccessful.

The tenants had noticed mould in the bathrooms in the ingoing condition report and had complained to the landlord’s agent that the exhaust fans in the bathrooms were not working.

An electrician who attended the property provided a statutory declaration to the Tribunal that the fans were working “to the best of their ability”. A builder also gave evidence to the Tribunal that the exhaust extraction systems in the bathroom were “working to the best of their ability”.

The tenants alleged that the electrician had told them that the exhaust fans were not adequate, and that the doors to the bathrooms required vents.

The Tribunal noted that the reports from the electrician and the builder were carefully framed and drew the inference that, despite the fact that the fans were working, the fans were simply not adequate.

The Tribunal also noted that the electrician was not called to refute the statement by the tenants that he had told them orally that the fans were not adequate.

The Tribunal therefore found that there had been a clear breach of the landlord’s obligation to repair and maintain the premises. The landlord claimed that the tenants had failed to mitigate their loss, by not observing earlier that certain items were being affected by mould. However the Tribunal held that the mould damage about which the tenants complained would not have readily been seen.

The Tribunal allowed the costs of replacing items, a refund for overpaid rent, the costs of moving, and compensation for inconvenience over and above the reduction of rent, taking into account extra cleaning and laundering.

Timms & Simpson v Adams [2012] NSWCTTT 53

Claim for property damage by tenant 

The tenants began proceedings against the landlord, alleging that the premises had been partially uninhabitable due to mould.

The tenants had entered into a Residential Tenancy Agreement for premises at Coffs Harbour.

The tenants had discovered mould on possessions kept in a wardrobe, and had informed the landlord’s agent, who had contacted the landlord. The landlord had attended the premises, observed the mould, and, on the same day, obtained a dehumidifier which he provided for the tenants’ use. The landlord said that he was prepared to take whatever further steps would be necessary to deal with the problem.

Despite the steps that were taken, the mould worsened and the tenants had to throw away some items which were badly affected.

The landlord agreed to an early termination of the tenancy but would not agree to waive or reduce rent.

The Tribunal held that the landlord had not been in breach of his obligations under the Residential Tenancy Agreement because he had not been aware of the mould problem until it had been reported to him, and his response had been timely. The mould problem had not been the fault of either party. However the fears and concerns expressed by the tenants had been genuinely held and were objectively reasonable.

The Tribunal held there should be an abatement of rent under section 61 of the Residential Tenancies Act 1987 (which had been the applicable legislation), from the date upon which the premises had become partially uninhabitable. The Tribunal held that the tenants should receive a refund of $200 per week over a four week period.

The Tribunal held that, since the tenants had not provided evidence of the value of the property which had been damaged by mould, they had not discharged their burden of proof in that regard. Therefore, the tenants’ claim for the value of the mould-damaged property they had had to throw away failed.

The Tribunal also held that the applicants could receive no compensation for distress, anxiety, disappointment, unless they showed that they had suffered an actual psychological or psychiatric injury of sufficient severity.

Whitcher v Leyshan [2011] NSWCTTT 351

Fitness of premises for habitation 

The tenants under a residential tenancy applied to the Tribunal for an order that they had rightly broken their lease, due to the landlord’s breach of section 25 of the Residential Tenancies Act 1987. They sought orders that the bond be refunded to them, and that the two weeks rent paid in advance be refunded to them.

The tenants had inspected the property. One of the tenants had told the landlord’s managing agent that she had an allergy to mould. On the inspection, the tenants did not see any mould.

After signing the lease, the tenants collected the keys and went to the premises, and were “overwhelmed by the smell of mould”. The tenant with the allergy had to go outside, and, within 20 minutes, had an allergic reaction all over her body. The tenants never moved into the premises.

The property was relet about three weeks later, and the landlord sought rent for those three weeks.

Section 25(1)(a) of the Residential Tenancies Act 1987 stated that it is a term of every lease that “the landlord shall provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant”.

The Tribunal recognised that the critical question is whether the premises were unfit for habitation. In answering this question, the Tribunal referred to the English case of Summers v Salford Corporation [1943] AC 283, in which it was said: “if the state of repair of a house is such that by ordinary user damage may naturally be caused to the occupier either in respect of personal injury to life or limb or injury to health, then the house is not in all respects fit for human habitation.”

The Tribunal therefore held that the premises had not been fit for habitation, and that the tenants had rightly broken the lease. The tenants were entitled to the return of the bond and the rent paid in advance.

Muscat & Koroleff v Hanna & Abraham [2010] NSWCTTT 619

Existence of mould problem in question 

A tenant made an application to the Consumer, Trader and Tenancy Tribunal (Tenancy Division) for compensation for economic and non-economic loss as a result of a breach by the landlord of a term of the residential tenancy agreement (namely, the landlord’s responsibility for cleanliness and repairs). The damage complained of was to personal property affected by excess amounts of moisture and mould within the dwelling. Many attempts were made by the landlord to rectify the problem. The landlord provided evidence alleging that there was not a mould problem at the dwelling.

The Tribunal member presiding over the application was not satisfied that the landlord had breached the residential tenancy agreement, and dismissed the application. The Tribunal’s finding was based on a lack of evidence provided by the tenant to show that there existed a problem with moisture and mould.

Sheinman v Skurnik (Tenancy) [2009] NSWCTTT 293 (2 June 2009)