Share house tenants who had paid a bond and the first two weeks rent but then decided not to move in because the “conditions did not meet their expectations and standards,” have been forced to pay re-letting expenses and lost rent of more than $11k.
Gemma Feroviar knew the home because one of the occupants leaving the end of January 2014 was her cousin.
She initiated enquiry to landlord Saufi Kasim who agreed to a 12 month tenancy at $600 weekly from 1 February to the trio that included friends Alastair Blondfelt & Nathan Hauesta.
All three contributed equally to the $2.4k bond. Feroviar’s mother and that of Blondfelt provided the landlord the written personal guarantees he requested.
All three signed the bond lodgement form but Feroviar could not comply with the landlord’s requirement – all each sign the lease “before he would regard it as effective” – because of her housesitting duties in Roma.
To redress that problem, she explained her predicament to Kasim by phone who agreed to wait for the signed agreement, saying “don’t worry the house is yours”.
Blondfelt and Hauesta noted several defects for the purposes of the entry condition report when they saw the interior of the home for the first time during the landlord’s handover on 1 February.
During that encounter Kasim returned to the pair the tenancy agreement that was still awaiting Ferrier’s signature.
The following day they notified they had decided not to proceed because of the home’s unsatisfactory condition.
The first question for consideration by the Queensland Civil and Administrative Tribunal (QCAT) was whether or not the absence of Ms Feroviar’s signature meant there was no tenancy agreement.
QCAT member Jeremy Gordon noted that although Residential Tenancies and Rooming Accommodation Act (RTRAA) ss 61 and 62 require a tenancy agreement containing in the standard terms to be given by the lessor to tenants, an oral agreement or one that is as yet unsigned by a landlord’s or tenant, is nevertheless enforceable.
Considering all the circumstances objectively, it was apparent that the parties intended to be bound by the partly signed agreement as of 1 February.
Kasim’s prior stipulation – that all tenants must sign – had been “lifted” when he expressly confirmed to Feroviar that he would – at her request – allow her to sign the document when convenient.
A binding agreement having been entered into and none of the enabling circumstances that RTAA s 60 allows for having it set aside – documentation irregularities (s 58) or non-permitted payments (s 59) – existing, it was beyond the tribunal’s power to make any declarations about the agreement’s validity for example by reason of misrepresentation or the rental’s poor condition.
Neither was there any common law right that might allow the housemates to terminate on such grounds even if they could establish the home was in such poor condition it constituted a landlord’s “repudiation”.
Judge Gordon reminded the parties that the RTAA framework requires a tenant to issue a form 11 (notice to remedy) which if not complied with in a reasonable time, allows a form 30 (notice of intention to leave) to be issued.
What financial loss could the landlord recover?
Because he was only able to re-let the home from June and then only at $500 weekly, his loss was calculated at $600 for each week up to the date of commencement of the new tenancy and $100 from then until end January 2016.
The tribunal ordered the tenants to pay such loss (after having already credited the bond) of $10.1k plus advertising, re-letting, smoke alarm testing and key replacement costs, to bring the grand total of their debt to nearly $11,500.
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