Legality of lease

[Burramys]

Advice is sought about the legality of a lease.

A manager recently signed tenants and used the standard lease form. There are irregularities in that references to Acts of parliament are incorrect (wrong name, wrong sections), some do not apply (such as maintaining the garden) and other more general problems, supported by legislation, legal precedents and good custom.

The tenants signed as did the agent, and now I have been asked to sign as well. It troubles me that the lease may not be legal. However, given that the tenants are in place there may be limited downside.

One option may be to sign and note my reservations, as that would put any problems squarely with the agent. Then I could see if the standard form can be changed for next time. Also, the matter could be reported to the state consumer agency for their consideration.

Guidance as to the best course of action would be valued. TIA.

 

[Terry_w]

Would be valid probably. How do they get the standard form wrong?

 

[Scott No Mates]

The agent signs on your behalf unless they don't have a valid agency agreement with you. Why are you being asked to execute the lease?

 

[D.T.]

Is it the standard REIV one or another?

 

[Lil Skater]

If it's the standard reiv lease there shouldn't be anything against the act, unless the agency has added their own clause.

You can strike out sections that don't apply ie. Gardens, but you can't add anything outside the act.

 

[Burramys]

Thanks for the above. It's the REIV form. I had hoped to avoid naming them.

Item 43 of the Agreement refers to Section 452 of the Residential Tenancies Act 1997 and rental payments. S 452 of the Act deals with applications to VCAT.

Item 60 refers to emails being deemed as being received and "S 14 of The Electronic Transactions Act" The correct title is the "Electronic Transactions (Victoria) Act 2000". S 14 of this Act deals with Attribution of electronic communications. It appears that item 60 should refer to s 13, time and place of dispatch and receipt of electronic communications.

Using small fonts is marginal. See
http://www.consumer.vic.gov.au/shopping/contracts-and-sales-calls/contracts. This asks "Is the font size and style difficult to read?" Nine point is too small and does not meet this requirement.

See point 3 of the following.
http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html
"24 Meaning of unfair
(1) A term of a consumer contract is unfair if:
(a) it would cause a significant imbalance in the parties' rights and obligations arising under the contract; and
(b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

(2) In determining whether a term of a consumer contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:
(a) the extent to which the term is transparent;
(b) the contract as a whole.

(3) A term is transparent if the term is:
(a) expressed in reasonably plain language; and
(b) legible; and
(c) presented clearly; and
(d) readily available to any party affected by the term."

The copy given me is of a low standard of resolution, apparently much copied.

 

[Perp]

If what you say about the REIV contract is true - I don't disbelieve you, I just haven't seen it - then it's astonishing to me that they haven't picked those things up and corrected them. They're unlikely to impact on your lease but a first-year law student should have picked those up on review.

 

[Terry_w]

Thanks for the above. It's the REIV form. I had hoped to avoid naming them.

Item 43 of the Agreement refers to Section 452 of the Residential Tenancies Act 1997 and rental payments. S 452 of the Act deals with applications to VCAT.

Item 60 refers to emails being deemed as being received and "S 14 of The Electronic Transactions Act" The correct title is the "Electronic Transactions (Victoria) Act 2000". S 14 of this Act deals with Attribution of electronic communications. It appears that item 60 should refer to s 13, time and place of dispatch and receipt of electronic communications.

Using small fonts is marginal. See
http://www.consumer.vic.gov.au/shopping/contracts-and-sales-calls/contracts. This asks "Is the font size and style difficult to read?" Nine point is too small and does not meet this requirement.

See point 3 of the following.
http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html
"24 Meaning of unfair
(1) A term of a consumer contract is unfair if:
(a) it would cause a significant imbalance in the parties' rights and obligations arising under the contract; and
(b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

(2) In determining whether a term of a consumer contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:
(a) the extent to which the term is transparent;
(b) the contract as a whole.

(3) A term is transparent if the term is:
(a) expressed in reasonably plain language; and
(b) legible; and
(c) presented clearly; and
(d) readily available to any party affected by the term."

The copy given me is of a low standard of resolution, apparently much copied.

You must be the first person to actually read a lease - which is a good thing. You should point this out to the law societ vic and the real estate institute as they are probably the copyright owners of the agreement - its not very professional is it. And point out to the real estate agent the size of the font. The tenant may be able to use this to avoid certain terms of the agreement.

 

[Burramys]

Thanks. I'm in the process of advising a number of agencies. The REA manager is stonewalling. After contacting Consumer Affairs and REIV I may get legal advice. Or I may write my own contract, or ask the agent to do this.

There's a number of poor arrangements of information and typos. For example, Point 7 deals with sub-letting, and so does point 48. Point 63 advises that 'The TENANT acknowledge (sic) that the premises are a "Smoke Fee Zone" and will ensure that they and their invitees do not smoke inside the premises.' Smoke Fee zone, quite. There is no logical grouping of subject matter, no headings. This is a sloppy form of words from the peak RE body.

 

[Burramys]

I've had a close look at the REIV contract and remain unimpressed. Set out below are keywords and the paragraphs that deal with these subjects. Some of the keywords are not quite right, but they are close enough. Some should be in two places as per the four point headings below.
Bond: 1, 44, 45
Term: 1, 46
Condition: 2, 49, 50
Damages: 3, 15, 37-41
Use: 5, 17
Sub-letting: 7, 48, 58
Indemnity: 10, 36
Animals: 15, 55

Point 57 says "It is the responsibility of the perspective tenant/s to make enquiries with the relevant authority." Perspective? Perhaps prospective or respective, or maybe leave out.

Point 62 says "The Tenant agrees to bear all costs in relation to the connection of the landline telephone connection if they choose to have the service connected." This reminds me of Groucho Marx and his "Party of the first part" skit.

The agreement is quite dreadful. It should be arranged in four headings:
1 Introduction
2 Starting the lease
3 During the lease
4 Ending the lease.

The numbers could be 1.1, 1.2, 1.3 etc. Have sub-headings for the 15-20 areas. Tighten the wording, eliminate the duplication, have correct spelling, make the Act references correct, call the RTA "the Act" except at the first mention, and print in 11 point serif with decent margins. It may take more paper but it will then comply with Australian Consumer Law and will be much easier to read.

 

[D.T.]

Remind me not to have you as a tenant

 

[Burramys]

Remind me not to have you as a tenant

Sir, that comment is actionable! It casts aspirations on my character, such as it is. I am prepared to settle for 2.5 weeks of rent.

A good, well-designed legal document looks after the interest of all parties, and minimises dispute time. The lack of scholarship in the REIV document does not lead towards that goal, which is disappointing. Clear, concise, comprehensive, unambiguous and accurate documentation can avoid a lot of legal troubles.

 

[thatbum]

I'm not too surprised. The standard REIWA lease has lots of similar problems with it - quite of few of which are almost certainly attempts to contract out of the standard terms and therefore void and potentially an offence under the Act.

 

[wylie]

I wonder if any landlord or tenant could weasel out of their obligations under a signed lease, due to spelling errors or the wrong Act being referred to on a lease form. It's not like there are only a couple of them in use .

I would have thought a spelling error, e.g. "Smoke Fee Zone" is quite clear that it should be "Smoke Free Zone" and therefore would stand up. What do the lawyers say?

Is this similar to the stories about people thinking they can avoid paying a fine if their name is spelled incorrectly on the speeding ticket (which I "think" is an urban myth)?

 

[Burramys]

I wonder if any landlord or tenant could weasel out of their obligations under a signed lease, due to spelling errors or the wrong Act being referred to on a lease form. It's not like there are only a couple of them in use .

I would have thought a spelling error, e.g. "Smoke Fee Zone" is quite clear that it should be "Smoke Free Zone" and therefore would stand up. What do the lawyers say?

Is this similar to the stories about people thinking they can avoid paying a fine if their name is spelled incorrectly on the speeding ticket (which I "think" is an urban myth)?

At law, providing the words are reasonably clear, then there can be no real argument. I identified typos to illustrate sloppy drafting and editing. A lease is an important document, and due care commensurate with this importance should have been made. That this due care was not done says volumes about REIV standards.

A penalty infringement notice cannot be challenged due to minor mistakes. The main information is the date, time, place, alleged offence, driver's details and reporting officer's details. In any case, the PIN will be backed up in the running sheet, unarguable. However, if you know the law then successful challenges can be made. I have done this for speeding, red light and parking, never paid one fine.

 

[Jaggannath]

Sir, that comment is actionable! It casts aspirations on my character, such as it is. I am prepared to settle for 2.5 weeks of rent.

A good, well-designed legal document looks after the interest of all parties, and minimises dispute time. The lack of scholarship in the REIV document does not lead towards that goal, which is disappointing. Clear, concise, comprehensive, unambiguous and accurate documentation can avoid a lot of legal troubles.

Aspirations? After your beautiful proofing of their docs, you missed your own

Aspersions

 

[AlmostBob]

vcat, Victoria Coddles All Tenants,
would happily use a spelling error to abrogate all tenant responsibilities under the lease, and grant them 12 months free rent as compensation for spelling free as fee

 

[Burramys]

Aspirations? After your beautiful proofing of their docs, you missed your own

Aspersions

Noted. I'm a sub-editor, so I'm allowed to make mistakes. I aspire to greater things, a higher standard of mistakes. If I was subbing the REIV agreement i'd want to see it again after corrections, perhaps twice. It's very badly arranged, quite horrible.

One more mistake. Point 33 says RTA s 428 and a penalty of $1000. S 428 provides that "
A tenant must not refuse to pay rent on the ground that the tenant intends to regard as rent paid by the tenant the bond or any part of the bond paid in respect of the rented premises. Penalty: 10 penalty units."

A penalty unit is set out at
http://www.gazette.vic.gov.au/gazette/Gazettes2014/GG2014S123.pdf
$147.61. Oops. The penalty unit value did not jump from $100 to $147 overnight, so the REIV Agreement appears to be old.

Maybe owners could check their agreements and see if there are errors. If we all push REIV and other like bodies then there will be a higher chance of change.

 

[Sez]

I have to wonder, some agencies will take the REIV lease and use it as a template for their own leases. This means that some agencies like to re-word and re-type the leases which would lead to the poor sentence structure and lay out? That would be why the REA is ignoring you, it is their error .

 

[Lil Skater]

What you've outlined is not a standard REIV lease. I pulled a file of a new lease and it's completely different.

Sounds like the agency is using an old template (possible due to the bad quality), or they've edited the REIV agreement. I'm 150% sure the REIV leases have never had a no smoking clause, you always need to add those if you want them!

I see many agencies trying to scrimp on costs so they don't update their leases or reuse old agreements, an REIV lease will cost the agent $3 a pop. You see it all the time.