Tribunal hearing in

Discussion in 'Legal Issues' started by Paul j F, 17th May, 2015.

  1. Paul j F

    Paul j F Member

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    Hi All

    What are your thought on our tenants vacating early and lodging a claim against us in the Magistrates court for $6500.

    Tenants complained about a rusted pool fence about 12 months ago. We had quotes to fix/replace $2500-$4500. Maintenance during their 2 year tenancy was over $5k replacing a/c, automatic gate motors, pool pump etc. So forgive me if I had to draw the line somewhere and as it did not impede their use of pool I let it go. I met every other request.

    2 months ago they had it inspected by local council who deemed it non-compliant. I realise then it was serious and has to be fixed. We had the pool emptied and got new quotes. I offered a $50 week reduction until fence is repaired and pool filled.

    Tenants have now terminated lease early on the grounds of building issues and claiming the $50 week rent reduction for the 102 weeks they were "unable to use pool due to non-compliant fence". Also in dispute is new a pool pump that failed in less than 12 months. I tried to have it replaced under 3 yr warranty but company claimed that it had been let to run dry by tenants. I withheld replacement cost from bond.

    Couple of facts.
    Tenants signed a new 6 mth lease agreement back in Oct 2014 at a reduced rent due to some maintenance issues (only maintenance issue was the pool fence)
    They knew the condition of the fence when signing the new lease
    Last inspection photos show towels around the pool and the gate being permanently held open by a rope or something.
    They used the pool the entire time up until it was emptied.
    I offered rent reduction from the time pool was emptied.
    They vacated 2 weeks early on the grounds of the non-compliant fence... council deemed the fence irrelevant because the pool is empty.

    First and foremost I cant see they have any claim prior to existing lease. Secondly the fence does not impede use of pool as they claim.
    I am claiming the two weeks rent and the replacement cost of pool pump.
     
  2. D.T.

    D.T. Property Lookerafterer

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    With the info provided I don't like their chances of getting that much, but will get some. Assuming comparable rents for similar properties sans pools are 50 less per week than yours, I think this is fair compensation. If you can get the service man to put something in writing about the pump issue being tenant derived then that will help a lot too.

    Fence issue does impede use of pool, because pool has to be compliant. If you had a tenants toddler that drowned, you'd be up for mega bucks. They signed lease renewal knowing it was unusable though and the rent amount reflects that. Watch out for non compliant pool fines!


    Lessons learnt -
    Always do your maintenance requests. Always leaves a card in tenants sleeve otherwise
    Don't bother with IPs with pools because they're too much work for too little gain.
    Do whatever you can to keep all your stuff legally compliant. Cost of legal action or a life is too great.
     
  3. Perp

    Perp Member

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    Mistake. It's completely irrelevant how much money you spent fixing other things. That only supports their claim that the property wasn't properly maintained.

    In any case, pool fencing should be your absolute highest priority.
    Seems a bit high, but they'll probably get something. Tribunal will also want to send a message that landlords absolutely can't ignore maintenance of pool fencing, I would think.
    If you have it in writing from the company that it was caused by the pump being let run dry by the tenants, you *might* win. Without that, you haven't a hope. Was this at the end of the tenancy?
    Was it stated in the lease that it was at a reduced rate due to outstanding pool fence maintenance? I doubt it, as I doubt that'd be legal, and if it wasn't an agreed reduction for this, then this is irrelevant.
    As the owner, you remain responsible for pool safety. Did you issue a breach notice immediately regarding the rope holding the gate open?
    If the pool is empty, then you're depriving them of use of the pool, in any case.

    They still have a valid reason to terminate, which is your lengthy refusal to perform essential maintenance. The fact that they could still use the pool, or that the problem with the fence didn't compromise safety, probably won't be relevant - once "pool fence" is mentioned, and you're established to have not responded to a maintenance request, you're going to find Tribunal highly unsympathetic.

    I think their claim is far too high and they won't get that much, but they'll get something, and your wanting rent for early termination plus payment for the pool pump - unless you have the written evidence I referred to - is "dreamin'". :)

    It may not be fair, but you need to know the rules of the game you're playing much better.

    Do you have a RE agent? If so, they've let you down badly by not insisting the pool fence be repaired ASAP.
     
  4. Scott No Mates

    Scott No Mates ...and people wonder why?

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    Did you advise the tenant when you would be repairing the pool fence on the new lease?

    With the high profile of backyard drownings, why would you think that pool fencing is not a serious issue?

    How long ago was the pool pump issue? Why didn't you persue it then?

    The tenant has broken their lease for what could be considered not a major breach of the lease (the house is not uninhabitable & you're going into winter). Lodge your own claim for the bond for the breach.

    They can't retrospectively claim for the rent reduction if it didn't become an issue until recently.

    Why do you need to replace the entire fence? Is that the directive of the council or you can't replace the damaged section?
     
  5. Lil Skater

    Lil Skater Member

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    Just because a pool is empty, doesn't mean the pool fence doesn't have to be compliant. It's whether a body of water can hold >30cm of water, not if there is more than 30cm of water in it at the time - I looked into this myself when appraising a property with an empty pool.

    $6.5k sounds like an extreme amount of money, I agree and I doubt they will be able to get all of that - but knowing how the system works they will likely get out of their lease, without penalty and you will probably need to pay them a sum for this.

    You can't "draw the line" at fixing the pool fence, or maintenance (improvements is different). What if the tenants, their visitors or someone off the street walked in and drowned? That's your responsibility and is an absolute necessity to be fixed ASAP.

    If you have a report in writing that the tenant broke the pump due to not maintaining the unit, you should be able to claim something back.

    For future consider having someone do the pool maintenance regularly, and up the rent slightly. Or look at the cost to remove the pool and fence all together.
     
    Perp likes this.
  6. Paul j F

    Paul j F Member

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    Thank you all for your responses. Definitely a reality check. I am now reconsidering my position.

    However, one thing that needs to be clarified is that I took action the moment that I was advised by an authority that it was deemed non-compliant and offered a reduced rent. Council were not concerned once I emptied the pool.

    Also I am a bit confused how tenancy agreements exists outside of normal law of contract ie. Offer, Agreement and Acceptance. Tenants knew the state of the fence when signing a new contract and accepted the agreement. There was a meeting of minds regardless of what was written in contract... ie. The fence condition was known by both parties and rent was adjusted accordingly.

    eg. If a tenant signs an agreement to a lease with an A/C system on the wall and was not informed it does not work they are entitled to it being fixed. However if that A/C is sitting on the ground in the corner and clearly not working they can not claim compensation.

    At this stage I am willing to let them out of their two weeks rent ($1140) and the pool pump ($700). I will chase the pump company on that. I will reimburse for the time the pool was empty.

    Reasonable?
     
  7. Terry_w

    Terry_w Member

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    This is because of a branch of law known as 'equity'. Equitable principals have now been incorporated into legistation too.
     
  8. Xenia IM

    Xenia IM Property Manager

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    Unfortunately it sounds like the tenant is entitled to compensation in this case.

    Tenants are able to claim compensation for any outstanding maintenance issue even if it is preexisting and even if it was in place before a lease was signed.

    The arguement of "they knew it was like that" does not stand.

    It would not be from the beginning of the previous tenancy. Compensation will be granted from the time they had asked for the fence to be fixed till they vacated. If they can prove the asking date that is.

    My guess would be that it will be nowhere near $6000.

    How long were they asking?

    I would just take responsibility for this one, wear it and move on, argue for it to be as little as possible given that you have already attempted to compensate the tenant $50 per week - which is excessive.

    argue for it to be $5 to $10 per week and reduce it by the $50 reduction already granted - this will reduce costs.

    Tribunal judges DO NOT want to hear stories of landlords not wanting to spend money on their properties - my feeling is total responsibility "sorry it should have been fixed, what is my consequence"? would at least get you some empathy.

    keep us updated please on this one.
     
  9. Xenia IM

    Xenia IM Property Manager

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    also - counter claim for the cost of the pool pump.
    Has bond already been refunded to you for that cost?

    If not, counter claim at the same tribunal hearing by lodging an application for compensation form.
     
  10. lizzie

    lizzie when i grow up ...

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    Yes - but - not when you were advised by the tenant ...
     
  11. lizzie

    lizzie when i grow up ...

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    Um ... if this goes to tribunal then it's the judges choice, not yours.

    As for the aircon example ... if there is an aircon affixed to the building, the assumption is made that it is in working order unless otherwise advised. It's not for the tenants to find out after they move in ... same is if there was a toilet not working ...
     
  12. Paul j F

    Paul j F Member

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    I do thank everyone for their input. Yes I should have attended to the maintenance of the pool fence. I totally understand that and will be offering them some compensation....but I am still perplexed.

    The events leading up to the signing of the latest lease agreement support "the pool fence requires maintenance therefore there will be a reduction in rent" Whilst not stated in the agreement I do have an email chain requesting a reduction in rent due to "maintenance issues" I replied to PM stating the only issue was the pool fence and we were still receiving quotes but agreed to a reduction.

    They are claiming compensation for loss or reduction of facilities of which they did not endure. They continued to use it regardless and we continued to pay for monthly pool maintenance. See picture from latest inspection Feb 2015 Never did we receive any notice stating that they are no longer using the pool or the backyard due to safety concerns. Surely one must experience loss to be entitled to compensation?

    and finally..we were first notified of the fence in April 2014. They are claiming back to May 2013.
     

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  13. Perp

    Perp Member

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    Some things cannot be negotiated out of contracts. As well as equity, there are statutory provisions on what can and can't be part of a lease agreement, and there are common law duties.

    1. Your email chain etc. is irrelevant because statute says - in all parts of Australia as far as I know - that leases must be evidenced in writing. The only conditions that are part of a lease, are written in the lease.

    2. Even if it had said it in the lease, pool fencing is a safety issue that's not just an obligation to your tenant but to the wider community, e.g. to prevent a wandering child from drowning. Your tenant cannot excuse you from protecting third parties. Think of it this way: if it were your PPOR, and the fencing inspector came by, could you say "Oh, it's OK, I was happy with it unfixed"? :)

    3. Even if your obligation was only to your tenant, you can't contract out a duty of care. As a landlord, you owe a common law duty of care to keep your premises safe. Any provision of a lease in conflict with that would be found to be invalid.

    Their claim for compensation is excessive, I think we all agree. I agree they're unlikely to be compensated for the period before when they notified you. But once you're notified of a safety issue, you've *got* to act promptly. Even if they still used the pool, the Tribunal member hearing the matter is not going to be sympathetic with your position, for neglecting to attend to a safety issue ASAP, and may award them compensation for their "loss of safe enjoyment of the premises", for example. It highly unlikely to be anything like the thousands they're seeking, but it's likely to be something.