Landlord's delay proves costly

In the recent decision of Hessey-Tenny & Anor v Jones, [1] the Appeal Tribunal provided a timely reminder of the importance of complying with the relevant procedures and timeframes set out in the RTRA Act.

Mr and Mrs Hessey-Tenny (the Appellants) entered into a residential tenancy agreement with Mr Jones (the Respondent) on 31 March 2017, which was due to end a year later on 30 March 2018. However, the Appellants issued a Notice of Intention to Leave (Form 13) on 1 September 2017, allegedly due to unresolved sewage issues, dysfunctional toilets and several other ongoing faults with the property. The Appellants vacated the property on 7 September 2017.

The Appellants subsequently filed an application for a minor civil dispute - residential tenancy dispute three days later, seeking orders pursuant to Sections 94, 185, 419 and 420 of the Residential Tenancies and Rooming Accommodation Act 2008 (RTRA Act). Appellants claimed a total of $11,115.30 for removal costs, packing material, bond clean, court costs and a refund of 50% of rent paid. On 2 March 2018, the Respondent filed a counter-application seeking break-lease costs, a "management preparation fee" and repair costs totalling $9,065.

The matter was initially heard in the Tribunal on 8 March 2018, with written reasons delivered on 4 April 2018. The Appellants' application was refused, but the Respondent's counter-application was successful, in part, with the Appellants liable to pay compensation for unpaid rent, a break-lease fee and repair costs in the sum of $6,615.50. Within two weeks of the decision, the Appellants filed an application for leave to appeal or appeal against that decision.

The Appellants' grounds of appeal include, inter alia, procedural points regarding:

1. The requirement of a conciliation before the Respondent could commence his counter-application; and,
2. Whether the Respondent's counter-application was out of time.

The Appellants submitted that the Tribunal erred in determining that it was able to hear the Respondent's counter-application in circumstances where he had not lodged a dispute resolution request as required by Section 416 of the RTRA Act. The Appellants maintained the Respondent's counter-application was not of the sufficiently same character as their application, and as such required its own conciliation process. The Appeal Tribunal noted in this matter, the Residential Tenancies Authority (RTA) deemed the Appellants' original dispute unsuitable for conciliation. The Appeal Tribunal held that had the parties attended conciliation, it is "inconceivable" the Respondent would not have raised his claims in response to the Appellants claim for rent reduction and compensation.

In addition, the Appeal Tribunal noted that during the hearing the Tribunal provided the Appellants with the opportunity to adjourn both applications to allow the Respondent to submit a dispute resolution request to the RTA. However, the Appellants were happy "to move forward" and later agreed with the Tribunal's classification of the Respondent's counter-application as "responsive to their claim, as his side of the story." Accordingly, the Appeal Tribunal held that this ground of appeal cannot be maintained.

Section 419(3) of the RTRA Act provides that an application by a tenant or landlord for breach of a term of a tenancy agreement must be made within six months of first becoming aware of the breach.

The Tribunal initially held that it was satisfied that all of the Respondent's compensation claims fulfilled this requirement.

The Appellants submitted that the Tribunal erred in determining that the timeframe for the Respondent's compensation claims was the six months prior to the Appellants filing a dispute resolution request with the RTA on 29 September 2017. The Appeal Tribunal agreed. The Appeal Tribunal also accepted the Appellants' submission that in circumstances where the Respondent's counter-application was filed on 2 March 2018, the latest date that he could have first been aware of a breach in accordance with Section 419(3) of the RTRA Act was on 2 September 2017.

The Tribunal held that the Appellants' breach of the tenancy agreement was their failure to return the premises to the condition they were in at the start of their tenancy, fair wear and tear excepted (Section 188(4) of the RTRA Act). The first time the Respondent could have become aware of the breach was when the Appellants vacated the property in early September 2017. However, the Appeal Tribunal considered that the Respondent was aware of a number of issues that he claimed compensation for, prior to 7 September 2017. The Appeal Tribunal held that the damage that resulted in the laundry repair costs claim was first identified in August 2017. In addition, the water tank issues that lead to the cost of a replacement pump were identified during the tenancy and prior to 7 September 2017. Accordingly, the Appeal Tribunal allowed the appeal for the laundry repair costs ($2,125) and replacement water pump ($712.50), reducing the Tribunal's original order in favour of the Respondent.

Following the announcement of the Prime Minister on 29 March 2020 regarding the moratorium on no evictions, there has been increasing uncertainty regarding the application of the RTRA Act. The Tribunal has stated it continues to apply the law as it stands and the process for tenancy disputes has not changed. The Tribunal has added that if and when new laws come into effect, it will immediately apply them as appropriate. (Editor's Note: At the time of publication, the Queensland Government have introduced Temporary Special COVID-19 Measures for Residential Tenants &; Owners into Parliament, with the expectation the temporary amendments will be passed).

This decision is a timely reminder for property managers to ensure they are familiar with all aspects of the RTRA Act, in particular the timeframes under Section 419(3), and continue to comply with the relevant processes for tenancy disputes. If property managers have any concerns about a residential tenancy dispute, including compliance with the RTRA Act and any other relevant legislation, it is strongly recommended they seek legal advice.

[1] [2020] QCATA 9.