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Benchmark - Real Estate Cases & Commentary
Tenancy matters
    •  Repairs
        -  Repairs sought by tenant
            >  NEW Reduction in rent
            >  Failure to carry out in reasonable time
            >  Tenant seeking replacement of faulty hot water system

Reduction in rent 

The tenant applied to the Tribunal for orders that repairs be carried out at the rental premises, that the landlord pay compensation to the tenant up to the limit that the Tribunal was empowered to order (namely, $15,000.00), and that the rent be abated by 100%.
In March 2011, the Tribunal had ordered the landlord to carry out a number of repairs, and had ordered that the rent be reduced by 50%. The landlord did not comply with the repair order, even after the Tribunal extended the time for compliance. The Tribunal then ordered that the rent be reduced to 25% of its original amount, and that the rent be paid to the Tribunal until the repair order was complied with.

The landlord gave evidence that it did not have any funds to carry out the repairs, as it did not receive any Government funding, and its only source of funds was its rental payments, which were often not paid.

The Tribunal considered that a further order for repair, or a further extension of the original order to repair, would not serve any useful purpose.
The tenant claimed her costs of making the Tribunal applications and travelling to the Tribunal hearings. Usually, before the Tribunal, each party pays his or her own costs unless there are exceptional circumstances. The Tribunal, however, considered the circumstances in this case to be exceptional. The Tribunal therefore made an award of costs, to compensate the tenant for her application fees and her travel to the Tribunal hearings.

The tenant also asked for compensation for her non-economic loss, that is, her anxiety, distress, inconvenience, and loss of enjoyment of the premises.

The Tribunal considered whether the Civil Liability Act 2002 (NSW) prevented the tenant from claiming compensation for non-economic loss. This Act prohibits the awarding of compensation for non-economic loss arising out of personal injury unless the compensation exceeds a certain threshold (which was not exceeded in this case). Personal injury includes impairment of a person’s mental condition.
The Tribunal held that grief, anxiety, distress and disappointment all come within the definition of personal injury, and so compensation could not be awarded for these reasons. However, nuisance, inconvenience, discomfort, and loss of enjoyment of premises were not personal injuries, and so compensation could be awarded for these reasons. Therefore, the tenant was entitled to some compensation, but not the total amount she asked for.

On the basis of the nuisance, inconvenience, discomfort, and loss of enjoyment of premises caused to the tenant, the Tribunal awarded damages of $5,000.

The Tribunal did not reduce the rent further than it already had been, as it considered that the tenant should pay at least some rental for the premises.

Daley v Kurrachee Aboriginal Co-op [2012] NSWCTTT 184

Failure to carry out in reasonable time 

The tenant applied to the Tribunal seeking compensation, a rent reduction, and payment of rent into the Tribunal, until certain repairs were carried out. The tenant alleged that the landlord had failed to carry out repairs on the premises.

The Tribunal noted that section 63 of the Residential Tenancies Act 2010 requires the landlord to provide and maintain the residential premises in a reasonable state of repair, having regard to the age of the premises, the rent payable and the prospective life of the premises.

The Tribunal noted that the duty imposed by section 63 is not one that the parties can contract out of (see section 219 of the Act) and so the landlord cannot pass the responsibility for repairs to the tenant merely by saying so in the Residential Tenancy Agreement. Rather, the duty on the landlord is one of strict liability and a lack of money on the part of the landlord, or delays caused by tradesmen or suppliers, is not a defence that the landlord can rely upon. It is also no defence for the landlord to say that they did their best.

However, the landlord’s obligation does depend on the landlord being given notice of the need to repair and being allowed a reasonable time to carry out the repairs.

In this case, the Tribunal found that the landlord had been given notice and a reasonable opportunity to carry out the repairs and had not done so. Therefore the landlord was in breach of the terms implied by section 63 into the Residential Tenancy Agreement.

The landlord was not satisfied that the premises were ever uninhabitable. However, the Tribunal was satisfied that repairs had been necessary and had not been made.

The Tribunal noted that, under the Civil Liability Act 2002, it could not make orders to award general damages for non-economic loss unless the threshold requirements were met. Those thresholds had not been met in this case. In this case, the only claims for economic loss were those arising from the cost of steam cleaning, and an amount paid to connect the phone, and the tenants had provided no receipts in any event.

Therefore the Tribunal ordered that the rent be reduced over the term of the Residential Tenancy Agreement, and that the landlord pay the tenant $1,350.00.

Gabriel v Demos [2011] NSWCTTT 468

Tenant seeking replacement of faulty hot water system 

The tenants made an urgent application to the CTTT for the replacement of the hot water system. They alleged that the system did not work, and was dangerous. The tenants also sought an abatement of rent from the beginning of the tenancy to the date the hot water system is replaced.

The tenants said that they had noticed the hot water system was faulty on the day they moved into the premises. A report by a plumber engaged by the landlord stated that, although the system was working, the temperature could not be regulated, and it presented a risk of scalding the tenants’ young children.

After several discussions, the landlord’s agent told the tenants that the landlord was not willing to replace the system, and that, if they were not happy with the present hot water service, they could move out of the premises. The landlord said that he had received advice from the Department of Fair Trading that he did not have to replace the system.

The CTTT found as a fact that the hot water system was faulty, in that it failed to deliver an adequate flow of water, and was dangerous to the young children at the property.

The CTTT held that the provision of a safe, functional hot water system is the clear responsibility of the landlord. Any advice the landlord had received to the contrary was wrong in law. The landlord has a responsibility to ensure that the premises are fit for habitation by the tenants – see section 25 of the Residential Tenancies Act 1987 (NSW). The CTTT found that the state of the hot water system breached section 25.

The CTTT pointed out that, where rented premises are in a state that is unfit for habitation, the landlord is not entitled simply to say that the tenants can move out if they are not happy with the situation. The landlord is obliged to correct the problem, and ensure that the premises are fit for habitation.

The CTTT ordered that the hot water system be replaced. The tenants agreed to discontinue their application for abatement of rent.

Seaman & Tyne v Seery [2010] NSWCTTT 376