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Benchmark - Real Estate Cases & Commentary
Tenancy matters
    •  Termination of tenancy
        -  Termination notices
            >  NEW Validity of termination notice
            >  NEW For non-payment of rent
            >  Landlord may apply directly for termination without serving notice
            >  Retaliatory notice
            >  Validity of second termination notice
            >  Issue of notice without proper grounds not a repudiation of lease
            >  Statutory requirements
            >  Failure to issue valid notice on tenant where Contract for Sale in place



Validity of termination notice 

The landlord applied for an order from the Tribunal that the tenant give the landlord vacant possession of the residential premises.

The landlord was represented by its agent at the hearing. The tenant did not appear, and no explanation was given for that non-appearance. The Tribunal was satisfied that the tenant had been served with a copy of the application.

The landlord’s agent gave evidence that she was aware that the tenant was still residing at the premises and that a termination notice had been served.

The landlord alleged that the tenant was more than fourteen days in arrears of rent when the notice was served. The landlord relied on two increases in rent to establish this, and provided to the Tribunal two notices of rent increase, dated in September 2010 and June 2011.

The Tribunal noted that section 41(10) of the Residential Tenancies Act has the effect that a rent increase notice older than twelve months does not give the Tribunal power to make an order. Therefore, the landlord could not rely on the notice from September 2010.
With regard to the notice in June 2011, the Tribunal assumed, in the absence of evidence to the contrary, that it had been delivered by post.

Therefore, it would have been deemed to be served on 28 June, rather than the date it was posted on 22 June, and it therefore did not give the required sixty days’ notice as required by Section 41 of the Residential Tenancies Act. Therefore, this notice was invalid.
When the invalidity of the two increases in rent were taken into account, the Tribunal noted that the tenant was only twelve clear days in arrears of rent.

However, section 88 of the Residential Tenancies Act states that a termination notice given by a landlord solely on the ground of failure to pay rent has no effect unless the rent has remained unpaid for at least 14 days before the notice is given.

Therefore, the Tribunal held that the termination notice was invalid, and it dismissed the landlord’s application.

Medway v Croft [2012] NSWCTTT 168



For non-payment of rent 

The tenants entered into a Residential Tenancy Agreement in November 2011 for premises at Turramurra.

On 27 January 2012, the landlord served a termination notice on the tenants, on the ground of non-payment of rent.

The tenants raised two issues before the Tribunal. First, that the rent ledger submitted by the landlord’s agent was incorrect. Second, that the notice of termination was invalid, because they had not been in breach for at least 14 days before the Notice was given. Section 88 of the Residential Tenancies Act states that a termination notice given by a landlord solely on the ground of failure to pay rent has no effect unless the rent has remained unpaid for at least 14 days before the notice is given.

The Tribunal found that, on the evidence, the rent had been paid to 13 January. Therefore, the 14 day time requirement had been adhered to, and the notice was valid.

The Tribunal was satisfied that there were substantial rent arrears, and that, in the circumstances, the breach was sufficient to justify the termination of the tenancy.

The tenants stated that they would remedy the breach by payment in instalments. The Tribunal took this into account, but considered that did not overcome the landlord’s right to terminate the Lease and take possession of the property.

Mackay v Smith [2012] NSWCTTT 198



Landlord may apply directly for termination without serving notice 

The landlord applied to the Tribunal for an order terminating a Residential Tenancy Agreement, and seeking vacant possession of the property, under section 92 of the Residential Tenancies Act 2010.

The landlord and the tenant had shared residential premises, with each having the use of the common facilities in those premises. However they each had their own bedroom for their own exclusive use.

The relations between the landlord and the tenant had deteriorated over time, and there had been increasing animosity between them. There had been a series of minor disputes about noise, particularly in regard to playing music and watching television. The landlord had, on occasions, called the police and the police had attended at the premises.

The tenant conceded that, on at least one occasion, she had removed the fuse from the fuse box after a dispute about noise. The tenant also conceded that she had turned the television volume up to a very high level. The tenant had conceded she had shouted at times to the landlord from her bedroom, but she did not concede that she had been aggressive. She said she had been reasonable at all times.

The tenant claimed that the landlord had breached her right to quiet enjoyment and had caused her to suffer stress and anxiety. The Tribunal noted however that there was no application from the tenant about this and that the only application before the Tribunal was the application to terminate the tenancy which had been filed by the landlord.

The Tribunal noted that section 92 of the Act enables a landlord to apply directly to the Tribunal for a termination of a Residential Tenancy Agreement, without the landlord having to serve a notice of termination. The Tribunal found that the admitted conduct of the tenant was sufficient to cause the landlord to feel intimidated or harassed. Therefore, the Tribunal held it was appropriate to terminate the Residential Tenancy Agreement.

The Tribunal ordered that the tenancy agreement be terminated and that the tenant give vacant possession to the landlord seven days after the date of hearing.
 
Walsh v Fliegner [2011] NSWCTTT 528



Retaliatory notice 

This case involved a periodic Residential Tenancy Agreement, where the landlord had served a 90 day notice of termination.

The tenant did not give vacant possession to the landlord in accordance with the termination notice. Therefore, the landlord sought orders from the Tribunal that the tenant vacate the property.

The tenant argued that the notice to terminate had been given by the landlord’s agent in retaliation for the tenant reporting the agent to the landlord for allegedly not supplying a new washing machine to the premises but charging the landlord for one. The landlord’s agent denied this and said that the notice was issued on the instructions of the landlord.

The Tribunal noted that a “retaliatory notice” exists where the landlord was wholly or partly motivated to give the notice because the tenant had applied to the Tribunal for an order, or the tenant had taken any other action to enforce one of the tenant’s rights, or because an order of the Tribunal was in force in relation to that tenant and that landlord.

However the Tribunal held there was no evidence in this case of any of those circumstances. Therefore, the Tribunal held that the notice of termination was not retaliatory, and ordered that the tenancy be terminated.

The Tribunal had regard to the length of time of the tenancy, and the hardship the tenant may face in relocating, and therefore allowed about one month for the tenant to vacate, although it also ordered an occupation fee of about $30.00 per day to the date that vacant possession was given.

Cottee v Gray [2011] NSWCTTT 545



Validity of second termination notice 


The tenant applied to the Tribunal to set aside a termination notice that the landlord had served.

The landlord had served a termination notice for alleged breaches of the residential tenancy agreement. A police operation had been conducted at the rental premises, which had resulted in an occupier of those premises being charged with six drug related offences.

The tenant refused to leave the premises, and the landlord did not commence proceedings for termination but rather issued another termination notice to the tenant on the same grounds. The tenant thereupon applied to the Tribunal for an order setting aside this termination notice.

The tenant argued that the termination notice contravened section 118(b) of the Residential Tenancies Act 1987. Section 118(b) provides that: “to avoid doubt, a landlord … who gives a Termination Notice may … if the notice is not revoked, give a further notice on a different ground.”

The Tribunal pointed out that this provision is not a limiting provision. Its purpose is to make it clear that, if a termination notice is not revoked, a further notice can be given on a different ground. However, it does not have the effect that, if the notice is not revoked, a further notice can only be issued on a different ground. Rather, a further notice can be issued on either the same or different grounds.

The Tribunal held that there was no reason why the landlord could not give a second notice on the same grounds as the first notice, even though the first notice had not been formally revoked.

The Tribunal held that the second termination notice was valid.

Smart v NSW Land & Housing Corporation [2011] NSWCTTT 126



Issue of notice without proper grounds was not a repudiation of the lease 

A landlord and tenant entered into a Residential Tenancy Agreement under which the tenant was obliged to care for a number of plants on the premises. A dispute arose as to whether the tenant was sufficiently caring for the plants.

The landlord issued a notice of termination of the Residential Tenancy Agreement in January 2010, based on the breach of the tenant’s obligation to care for the plants. The tenant responded that there were no valid grounds on which the landlord could terminate the agreement. The tenant then claimed that the landlord’s service of an invalid termination notice constituted a repudiation of the Residential Tenancy Agreement, and entitled the tenant to terminate that agreement, and the tenant did so, by letter from his solicitors. The tenant also relied on a breach of his right to quiet enjoyment of the premises. The tenant vacated the premises in February 2010.

The landlord applied to the Tribunal for compensation from the tenant, seeking to be compensated for repairs and maintenance to the premises, as well as loss of rent and costs incurred in the removal and storage of furniture.

The tenant lodged a cross-claim against the landlord, alleging that the landlord had breached the Residential Tenancy Agreement.

The Tribunal held that the landlord had not been entitled to issue the first notice of termination. However, the Tribunal also held that issuing a notice of termination without proper grounds to do so was not a repudiation of the lease, and did not evince an intention on the part of the landlord that he would no longer be bound by the lease. Therefore, service of an invalid termination notice by the landlord did not entitle the tenant to terminate the lease. The Tribunal noted that the position had been different with a notice to quit under the old Landlord and Tenant Act 1899.

Further, the breaches of the tenant’s right to quiet enjoyment of the premises were not such as would entitle the tenant to terminate the lease.

The Tribunal therefore held that the proper legal characterisation of the end of the tenancy was that both parties had walked away from the Residential Tenancy Agreement, and neither party had a basis for claiming contractual damages.

There was still the issue of the landlord’s right to compensation based on the state of the property at the end of the tenancy. The Tribunal found some of the alleged items of damage were made out, and ordered a small amount of compensation.

Morgan v Kihara [2010] NSWCTTT 490



 
Statutory requirements 

When issuing a Notice of Termination, landlords and agents should be aware of the statutory requirements for a valid notice. Termination on the grounds of a breach of the Residential Tenancy Agreement, requires that the notice should provide particulars including the time, date and place of any incident and a description of the alleged event. If the Notice of Termination does not include sufficient particulars it may be invalid.

The landlord of residential premises applied to the CTTT for an Order that the tenancy agreement be terminated and possession of the property be returned to the landlord. The tenant claimed that the Notice of Termination was not valid because it failed to properly particularise the alleged breaches.

The landlord served a Notice of Termination on the tenant, citing the following alleged breaches of the lease by the tenant:

1. The tenant had recently moved a second permanent resident into the flat, despite the terms of the agreement stating only one person may live in the premises at any one time.
2. The loud music and noise occurring in the flat until the early hours of the morning seriously disturbing the quiet enjoyment of other tenants on site.
3. The second resident has on two occasions indecently exposed himself and/or preformed lewd acts in public to the disgust of other tenants.

The CTTT confirmed that a Notice of Termination must contain sufficient information to enable the tenant to know exactly what incidents are alleged to be in breach of the lease. The tenant is entitled to proper particulars which would enable the tenant to prepare adequately the case in response.

The CTTT found that the landlord gave sufficient particulars of the first breach because it nominated the event and an approximate time during which it occurred. The CTTT did not consider that the landlord had properly particularised the other two breaches.

The CTTT held that the Notice of Termination was valid.


Lechner v Lawton [2010] NSWCTTT 64


 
Failure to issue valid notice on tenant where Contract for Sale in place 

Managing agents must take care in the preparation and service of Notices of Termination to ensure that they comply with the statutory requirements. Agents may be liable for losses resulting from their failure to issue a valid Notice.

The landlord entered into a contract for the sale of rented premises. The managing agent, which also acted on the sale, was instructed to issue a Notice of Termination to ensure that the tenant vacated the property prior to settlement on 14 September 2009. The Notice of Termination should have been served by 15 August 2009 in order to give the tenant the requisite 30 days’ notice.

The agent did not serve a Notice of Termination until 17 August 2009. That notice erroneously stated that the tenant was required to vacate by 21 October 2009. The covering letter requested that the tenant vacate the property by 21 September 2009. Another Notice of Termination was issued the following day, which stated that vacant possession was required by 25 September 2009.

The agent claimed that he was not certain whether the settlement date in the initial instructions had been confirmed or if the date would change due to the cooling off period.

The tenant could not vacate the premises until 16 September 2009 thereby delaying settlement by two days.

The landlord was required to compensate the purchaser for loss suffered as a result of the delay, including the cost of accommodation, storage, and additional legal and removalist fees. The vendor also paid $400.00 compensation to the tenant, who had to vacate the property earlier than the date specified in the Notice of Termination.

The landlord brought proceedings in the CTTT against the agent, seeking recovery of the compensation paid to the purchaser and the tenant.

The landlord was successful. The CTTT found that the agent was liable to reimburse the landlord for the losses suffered as a result of the agent’s failure to issue a valid Notice of Termination. The CTTT noted that the agent had made no attempt to confirm the settlement date and had let the period for issuing a valid notice lapse.

Beard v John Pye Real Estate Pty Limited [2010] NSWCTTT 208