Agent pushback on liability for rental’s maintenance defects

A Burleigh Heads agency faces a $25k personal liability to a residential tenant for over maintenance deficiencies and other defects resulting in reduced amenity of a rental property it is managing.

Chris Salmon filed his application in November against the Professionals Black & Young Burleigh.

The agency – nominated on the General Tenancy Agreement as managing agent – contended the claim should have made against the owner for whom it was managing the tenancy and applied to have the claim struck out.

The tenant’s $25k claim also seeks the return of bond monies remitted to the owner in error.

Professionals Black & Young Burleigh argued Salmon had incorrectly commenced the proceeding against it as managing agent, when the correct respondent was the landlord.

It was not after all, a contracting party to the tenancy agreement and could not personally or otherwise liable to the tenant in relation to the relief sought.

Not so ruled senior Queensland Civil and Administrative Tribunal senior member John Bertelsen.

Residential Tenancies and Rooming Accommodation Act s 206 (3) specifies that as a consequence of an agent giving his details to a tenant – as required at the start of a tenancy – the agent thereafter “stands in the lessor’s place for a prescribed proceeding” and a “proceeding may be taken against the agent as if the agent were the lessor”.

Any application by a landlord or a tenant to QCAT is a “prescribed proceeding”.

It follows that any tenant may therefore sue a managing agent for any deficiency in rental arrangements. The agency will be put to the expense of defending the claim.  The agent’s ability to recover its legal costs and any compensation paid out will depend on whether or not its appointment contains a sufficient indemnity from the owner to meet such expenses.

In many cases, the agent may find itself paying an insurance deductible on its own insurance policy that it cannot recover from its landlord client.

Salmon v Professionals Black & Young Burleigh [2017] QCAT 047 Adjudicator Bertelsen 17 February 2017