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I forgot to mention that the PM should advise the tenant to contact Sydney Water directly about their injury as that is not a landlord issue. The link is: http://www.sydneywater.com.au/SW/accounts-billing/managing-your-account/claims-for-damages/index.htm

Make certain that your PM has correctly issued notices and correspondences in a timely manner and always in writing and then the two items are treated separately. Agree with continuing the termination as per normal.