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Benchmark - Real Estate Cases & Commentary
Tenancy matters
    •  Residential Tenancy Agreement
        -  Implied agreement
            >  Agreement implied by landlord's conduct

Agreement implied by landlord's conduct 

In November 2003, a former tenant vacated premises, and informally delivered possession to the current tenant. No tenancy agreement was ever signed between the landlord and current tenant.

The current tenant was the sole occupant of the premises and paid regular rent to the landlord from November 2003. The landlord’s agent was aware the current tenant was occupying the premises. It visited him on several occasions. It performed inspections three or four times a year, during which the current tenant raised issues including repairs to the premises, all of which were dealt with by the agent. The agent assisted the current tenant in gaining access to the premises when he locked himself out in 2007.

In July 2007 a hot water heater in an adjoining premises failed, causing rusty water to flood the premises. The current tenant requested the carpet be cleaned and the underlay fixed, but only the excess water was removed. The agent rejected the current tenant’s request for a professional carpet cleaner.

In October 2008 the current tenant wrote to the agent offering to paint the premises in return for replacement of the carpet. The landlord subsequently inspected the premises and promised to replace the carpet. A number of carpet layers attended the premises, before the agent advised the current tenant that the landlord had no intention of replacing the carpet. The carpet remained damaged and was now in such a state that it constituted a health hazard – the use of the premises was now severely limited.

In October 2009 the landlord sought to terminate the residential tenancy agreement with the former tenant, and take possession of the premises, on the grounds that the former tenant had breached his tenancy agreement by sub-letting the residential premises to the current tenant without the landlord’s prior permission.

The Tribunal found that the landlord was aware the rent was received from, and due by, the current tenant, since the former tenant had not been seen since 2003. The Tribunal found it was apparent that the former tenant abandoned the premises in 2003. There was no evidence he sub-let the premises to the current tenant, who merely commenced occupation of the premises and paid rent on his own behalf.

The Tribunal found that a tenancy agreement between the current tenant and the landlord was implied by the conduct of the parties.

The Tribunal also found that the landlord had been on notice of damage to the carpet since at least May 2009 and no action had been taken to remedy the defect. Rather, the landlord had sought to avoid the issue by attempting to terminate the tenancy.

As of the date of the hearing, the current tenant’s rent was up to date. The current tenant had a history of paying rent on time. The Tribunal held that the landlord breached his obligation to maintain the premises.

The Tribunal awarded 30% of the rent from June 2009 to February 2010 as damages to the current tenant, payable by the landlord.

Othman v Kafetzis (Tenancy) [2010] NSWCTTT 36