Getting the Tenant Notice to Leave Right

Journal, Property Management,  Journal,  Principals,  Property Managers

The recent decision in the Queensland Civil and Administrative Tribunal (QCAT) in case [2021] QCAT 427 highlights the importance of complying with legislative timeframes when providing tenants with notices to leave. It also examines the requirements of issuing a notice to leave due to the ‘non-liveability’ of the rental property.

Background

In this case, the tenants entered into a residential tenancy agreement to lease a home in Redbank Plains, Queensland (property). The tenancy agreement was due to end in November 2021.

On 7 April 2021, the tenants emailed the property manager to notify damage to the back deck of the property. The damage to the deck meant that the tenants were unable to use the back deck. On 6 May 2021, the property manager issued the tenants with notice to leave, requiring the tenants to leave the property on the same day. The tenants handed back possession of the property on 24 May 2021.

The tenants subsequently sought compensation for the loss suffered and expenses incurred in leaving the property at short notice, as well as a refund of overpaid rent, a retrospective rent reduction for living at the property whilst the deck was damaged, as well as the cost of their QCAT application fee.

At the time of the QCAT hearing, the bond had been refunded to the tenants, the overpaid rent had been refunded, and the property manager had already agreed to pay a retrospective rent reduction to the tenants of $180.

The notice to leave

The main issue before QCAT related to the notice to leave that was given on 6 May 2021.

The notice to leave was stated to be given “without ground”. However, the email sent to the tenants accompanying the notice to leave stated “attached is the notice to leave as the property has become uninhabitable due to the back deck”.

In circumstances where the notice to leave was, in fact, issued due to the ‘non-liveability’ of the property under section 284(1)(a) of the Residential Tenancies and Rooming Accommodation Act 2008 (Act), but that reason was not stated in the notice, QCAT considered that the notice to leave contained a significant defect.

The tenants did not dispute the basis upon which the notice had been issued, and treated the notice to leave as based on the ground of non-liveability.

However, it was important that QCAT deal with the state of the notice, which was defective on its face.

Section 429(1) of the Act provides that, if there is a dispute between a lessor and tenant “about an agreement”, either party may apply to the tribunal for an order, and the tribunal may make any order it considers appropriate.

QCAT considered that, despite the tenants not challenging the form of the notice, there was a dispute about the residential tenancy agreement, so it was appropriate to make an order correcting the defect in the notice so that it was ‘deemed’ to be issued on the ground of ‘non-liveability’ of the property.

Was the lessor entitled to give notice to leave?

Section 284(1) of the Act provides that a lessor may give notice to leave because the premises have been destroyed, or made completely or partly unfit to live in, other than because of a breach of the agreement. Notice to leave must be given within one month of the property becoming unfit to live in.

Prior to the notice to leave being issued on 6 May 2021, on 1 April 2021 the tenants sent the property manager a photo of the back deck. The photo showed a section of a timber strut supporting the deck that had rotted and come away from the strut. A quotation for repairs to the deck included the comment that “deck is not safe until all repairs have been made’. Due to a shortage in tradespeople at the time, the deck would not have been fixed for many months.

QCAT concluded that the deck contained a dangerous defect which compromised the safety of the entire property, which made the property unfit to live in. So, the lessor was entitled to issue the notice.

Was the property unliveable because of a breach of the lease?

QCAT considered whether the property was made unfit to live in due to a breach by the lessor. At the hearing, the property manager confirmed that they had previously inspected the property and had not noticed any damage to the deck. There was also no evidence to suggest the deck was damaged at the start of the tenancy.

Therefore, QCAT concluded, given that the lessor was reliant on the property manager for information as to the state of the property, the lessor was not in breach of the lease.

Was the notice to leave given within one month of the property becoming unfit to live in?

It was found that the rotten deck existed on or before 1 April 2021, when the tenants sent the property manager the photo showing the rotting strut on the deck. However, the property manager did not become aware the property was unsafe until 7 April 2021, when the tenants expressed their concern, in an email, about the condition of the deck.

QCAT considered whether the one-month period to issue the notice starts to run from when the property became unfit to live in, or from when the lessor (through its property manager) is made aware that the property has become unliveable.

It was concluded that the time runs from the date on which the property became completely or partly unfit to live in, which means the property manager’s notice to leave, issued on 6 May 2021, was outside the one-month period required by section 284(2) of the Act and, so, irregularly issued.

As a consequence, it was ruled that because the Act “imposes a duty on the lessor to issue the notice to leave within one month of the premises having been made completely or partly unfit to live in, and by section 52 of the RTRAA, that duty is taken to be included as a term of the lease. It was breached by the lessor. The Tribunal therefore has a discretion to order compensation under section 420(1)(e) of the RTRAA”.[1]

The loss

The property manager was ordered to pay the tenants the amount of $2,042.67 for time taken by the tenants from their annual leave to move from the property, trailer hire, and cashed in long service leave that was required to cover the cost of bond for their new property.

In assessing the loss, the Tribunal held it should not approach the claim for compensation by applying the general law of damages for breach of contract or tort, but by reference to the injured party’s intentions and the surrounding circumstances, in light of the underlying principles of the Act, to do justice between the parties.[2]

However, as the tenants had already received the bond at the date of the hearing, it was held that they could not recover a further two weeks rent – to do so would be to overly compensate them.

Conclusion

This decision serves as a timely reminder to property managers to ensure they comply with all legislative timeframes when issuing notices to leave, and ensure the notice is accurately completed and issued within one month of the property becoming unliveable.

It is also an important reminder to conduct frequent and regular inspections of properties to ensure that any major maintenance issues are identified early, before they render the property non-liveable.  A defectively issued notice to leave will expose the landlord to a claim for breach of the lease.  Such a claim will, ultimately, come back to the property manager.

References

[1] See paragraph 39 of the judgment.

[2] See paragraph 45 of the judgment, applying Hobbs v PGK P/L [2018] QCATA 156.

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