Tim Thompson and Nicole Smith submitted a residential tenancy application with Ray White Coorparoo in September 2013, at the same time paying two weeks rent and bond for a Holland Park rental.
A week or so later, after their application had been approved, they decided the asking rent was, at $510/week, over the odds. They sought a reduction before moving in.
The agent declined to come to the party and in response to a refund request for the total of $3060 paid, Ray White treated the change of mind as a “break lease” situation entitling them to forfeit the payment.
The renters promptly made application for a QCAT ruling that the the tenancy application wasn’t a concluded rental agreement because the formalities of the Residential Tenancies and Rooming Accommodation Act had not been complied with.
In particular they alleged that BEFORE payment of any money under the lease, s 61 requires them to have been given a “compliant written tenancy agreement”.
Furthermore their payment was merely a holding deposit that – pursuant to s 159 (3) – was required to be receipted as such and which granted them an automatic option to cancel with no penalty for 48 hrs from the time the receipt was issued.
Because a correct deposit receipt had never been issued – the agent treated the funds as paid towards rent – the 48 hr cancellation window had neither commenced nor expired and therefore, the agent had no legal right to withhold any funds.
QCAT member John Bertelsen upheld the renters’ arguments ruling that only after the tenants had received a “compliant written tenancy agreement,” were Ray White entitled to accept any amount by way of rent or bond.
Although it is possible that a tenancy agreement be entered into orally, clearly in this instance, the payment was by way of a deposit and the adoption of an incorrect procedure meant the 48hr cancellation window had never begun.
None of the payment could be retained. The tribunal ordered the whole of the funds be repaid to the couple.