A tenant has overturned a court ruling requiring she pay a further $1,300 after forfeiture of a bond, because her landlord declined the tenant’s offer to recruit a replacement tenant who could commence immediate occupation.
Although the prospect was prepared to enter into a tenancy within 24 hours, landlord Ying Chen refused the proposal as “the premises weren’t clean enough”.
Tenant Cristina Morrison argued Chen’s cleanliness complaint was a ruse designed to allow her to rent another unit to the prospect and at the same time extract from her some bond money as a ‘break lease’ fee.
A QCAT adjudicator dismissed the tenants’ objections and allowed Ying Chen to retain the break lease fee equivalent to two week’s rent.
Tenancy terms that apply a penalty or liquidated damages for a tenant’s lease breach are unenforceable unless they relate to “the tenant ending the tenancy other than in a way permitted by the Act” and then only if the amount specified for payment is no more than the reasonable costs of re-letting.
Notwithstanding that rule, the adjudicator – without evidence that it represented the cost of re-letting – allowed Chen the full $836 when Morrison notified she was leaving her rental one month early in December 2014.
Considering whether the tribunal should allow a rehearing, senior QCAT member Peta Stilgoe noted that the adjudicator’s reasoning was “exceptionally brief” and did not set out his material findings of fact or the law that applied.
Because the failure to provide adequate reasons is an error of law, she granted leave to appeal and reconsidered the facts in stanta to substitute her own decision.
Agreeing that re-letting fees should never be more than one week’s rent, Judge Stilgoe then directed herself to the heart of the tenant’s case – which the adjudicator ignored – that Chen denied the prospective replacement an opportunity to see the unit for herself.
Neither party called the proposed tenant as a witness. But as Ms Chen, as lessor, was held to have the onus of proving that she took all reasonable steps to mitigate her loss, her omission would count against her.
Chen admitted that she had multiple units vacant at the time the Morrisons vacated and could not produce an invoice for cleaning the premises after they left.
“The strong inference from the evidence is that Ms Chen preferred to rent other premises to that person and keep the Morrisons paying rent,” Judge Stilgoe ruled. “Therefore, I am not satisfied that Ms Chen took all reasonable steps to mitigate her loss”.
The appeal was allowed and Chen was ordered to refund the $1500 bond plus all of the $836 already paid by Morrison by way of break lease fee.