Judge's gavel and house|
  • 04 Feb 2025
  • 4 min read
  • By Andrew Persijn, Special Counsel, Carter Newell Lawyers

QCAT update: Zombie tenancy agreements

Property management, Zombie tenancy agreements

In this article, we consider a recent decision of the Queensland Civil and Administrative Tribunal, in its appellate jurisdiction, which provides property managers with some useful information regarding the interpretation of section 277 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (the RTRA Act).

Dalco Realty Pty Ltd v Chun [2024] QCATA 123

The respondent (the tenant) entered into a fixed term tenancy agreement for a property from 1 December 2021 to 30 November 2022, with rent at $425 per week (GTA). While Part 3 of the GTA included a special term stating, “A rent review of the property will be conducted every six (6) months — 30/5/2022”, it contained no other information regarding how the rent review was to be conducted.

On 27 May 2022, the appellant (the property manager) sent an email to the respondent advising that in accordance with the GTA, rent would be increased to $550 per week from 30 May 2022.

The respondent proceeded to file a Dispute Resolution Request (Form 16) with the Residential Tenancy Authority (RTA). The RTA recommended the parties negotiate and the respondent maintains an agreement was subsequently reached whereby the GTA would be terminated by agreement and the respondent would pay the increased rent until he moved out, with no other amount payable. An exchange of emails followed between a friend of the respondent who was assisting him, and the director of the appellant, with each party setting out their position.

The respondent vacated the property on or around 5 August 2022, and then received a demand from the appellant for rent for the period after the respondent had vacated the property until a new tenant was found. The respondent filed an application in the Queensland Civil and Administrative Tribunal on 23 November 2022. In his application, the respondent sought to recover the rental bond as well as “wrongly paid increased rent”.

The application was heard in the Tribunal on 24 March 2023. The appellant maintained during the initial hearing that, “…in accordance with usual practice, if a tenant is allowed out of a lease early, the tenant continues to be liable for the rent until someone takes over the premises”[1]

The Tribunal provided orders regarding the disbursement of the rental bond as well as an order that the appellant pay the respondent $1,178.76 as overpaid rent. In the Member’s written reasons for the decision, he held that the special condition in the RTA regarding rent increase did not satisfy the requirements of Clause 10(5) of the GTA, and the rent increase was therefore invalid. The Member also held that the GTA was terminated by mutual agreement.

The appellant subsequently filed an application for leave to appeal in the Tribunal on 20 April 2023. The Appeal Tribunal decision was delivered on 18 November 2024.

In relation to the grounds of appeal submitted by the appellant regarding the validity of the rent increase, the Appeal Tribunal promptly dealt with those grounds stating that, “I cannot understand how anyone could think that the special term in this agreement could meet the requirements of the Act s 91(6)(b).” [2]

For the purposes of this article, we are focussing on the appellant’s submission regarding termination of the GTA by mutual agreement. The appellant submitted that there was no written agreement with the respondent to terminate the GTA on 5 August 2022.

In considering the appellant’s submission, the Appeal Tribunal referred to the requirements of s 277 of the RTRA Act, stating that “One proposition of law the appellant did have correct is that the Act s 277(a) provides for ending the agreement if the parties agree, ‘in a separate written document’, to end the agreement.” [3]

The Appeal Tribunal identified an issue with s 277(a) of the RTRA Act that no doubt a number of property managers have encountered, stating:

…this is an unsatisfactory provision because there can easily be a situation where the parties are agreed but without a written agreement, or both just ‘walk away from the agreement. If the parties in this matter did not agree to end the tenancy, they have just walked away from it, the respondent by moving out and returning the keys, and the appellant by entering into a new tenancy agreement with someone else. If the agreement were still in force, the new tenancy agreement would be a clear breach of it.” [4]

The Appeal Tribunal then went on to consider s 277(f) of the RTRA Act and whether the respondent could be seen to have abandoned the property by vacating and ceasing to pay rent. The Appellant Tribunal considered that the GTA came to an end under s 277(f) of the RTRA Act, in circumstances where “the respondent vacated the premises, and can be seen to have abandoned them, and rent for the period after that has obviously not been paid.” [5]

The Appeal Tribunal added that while the RTRA Act provides for the procedures for a lessor to follow when a property has been abandoned, “if the tenant has “abandoned”, that is, has moved out of the premises and returned the keys, quite openly, there is a situation where the landlord does not have to resort to the statutory mechanisms. There is nothing I can find in the Act which confines “abandonment” to a situation where those provisions have been complied with by the lessor.” [6]

The Appeal Tribunal held that there was no agreement in writing between the respondent and appellant and therefore, the GTA was not terminated in accordance with s 277(a) of the RTRA Act. However, the Appeal Tribunal considered that, “it was still effective as a consent by the appellant to the termination of the obligation to pay rent. It could be characterised as a consent to abandonment of the premises by the respondent, or perhaps as a waiver of the respondent’s obligation under the agreement to pay rent.” [7]

The Appeal Tribunal added that:

“If there is an agreement between the parties to terminate the tenancy, a “break lease” agreement, even if it is not effective to terminate the tenancy agreement because of s 277, it will still be effective as a later agreement between the parties, and will operate as a waiver of the mutual obligations of the parties under the agreement, or consent to the abandonment of the premises by the tenant, which will put an end to the tenancy agreement, if the tenant does in fact move out. Once the tenancy agreement was at an end, the obligation to pay rent also came to an end.” [8]

In refusing leave to appeal, the Appeal Tribunal stated that, “None of the submissions made by the appellant show that the appellant has any real prospect of showing that the Member erred in any way which would assist the appellant.”

The Appeal Tribunal provided additional commentary regarding s 277 of the RTRA Act:

“…I consider that the Act s 277 is quite defective in preventing a tenancy agreement from coming to an end by mutual agreement of the parties made after the tenancy is entered into, even if it is not agreed in writing. As well, the agreement should be treated as ended if both parties treat the tenancy as over, or if the tenant surrenders the premises to the lessor with the consent of the lessor. As it stands, s 277 is far too restrictive. There must be many zombie tenancy agreements which hang around long after the parties have moved on from the particular tenancies for which they provide, and merely serve to produce a risk of surprising and perhaps unpleasant consequences for one or other party.” [9]

Conclusion

In addition to the commentary around s 277 of the RTRA Act, the Appeal Tribunal also commented on the expected conduct of property managers in the Tribunal. The Appeal Tribunal stated that, “…professional (and presumably duly licenced) real estate agents are expected to know how to conduct a proceeding in the Tribunal properly, although the appellant has not demonstrated such knowledge.” [10] The Appeal Tribunal also stated that “… I would expect a licenced real estate agent who works as a property manager to be better informed as to the law applying to residential tenancy agreements in Queensland than is suggested by the submissions advanced in this matter”. [11]

Whilst all parties involved in residential tenancy disputes before the Tribunal must represent themselves (some exceptions apply), they are of course, always able to seek legal advice in regard to all aspects of a dispute. If property managers have any concerns about a residential tenancy dispute, including compliance with the RTRA Act or any other relevant legislation, it is strongly recommended that they seek legal advice.

Read another property management article: The importance of evidence in QCAT

Or browse our suite of articles.


[1] Dalco Realty Pty Ltd v Chun [2024] QCATA 123 at [9]

[2] Ibid at [18].

[3] Ibid at [23].

[4] Ibid.

[5] Ibid at [24].

[6] Ibid.

[7] Ibid at [26].

[8] Ibid at [27].

[9] Ibid at [32]

[10] Ibid at [21]

[11] Ibid at [33]

Start your Real Estate Career

Our approach to training is career focussed to support all members of the profession. 


From accredited training to start your career to upskilling courses that advance your career, the REIQ keeps you a real step ahead.

Need help? 1300 697 347 or contact us