A Gold Coast agency that served  eight rental arrears notices on its residential tenant, without a notice to leave has been held by a court to have “unintentionally signalled” that it was not serious about enforcing the terms of the tenancy agreement.

Luxury realtor, Shores Realty of Southport brought a lease termination suit in QCAT to end a tenancy because of recurrent fails on prompt payment of rent. The suit was dismissed because the tenant got payments up to date by the time of the QCAT hearing, prompting the first tribunal to dismiss the agent’s proceedings on the basis that the tribunal thought it could not evict in those circumstances.

Shores appealed, contending that the relevant date for determining if there were a breach entitling termination was the date of issue of the “Notice to Leave” not the hearing date.

The appeal member agreed.

Regardless that the rent was up-to-date at the time of the hearing, breach as at the date of Notice would ordinarily be sufficient to justify termination.

However if, like Shores Realty, the lessor allows the breach behaviour to continue past one or two breach Notices, the “tenant may have a legitimate expectation that the lessor will conduct business this way and that the lessor will tolerate minor breaches”.

In this instance, the tenant – although clearly in breach for a series of payment delays – the amount outstanding was large, the delay in payment was short.

By issuing eight notices to remedy breach, without a Notice to Leave, “Shores Realty was signalling to the tenant, perhaps unintentionally, that it was not serious about enforcing the terms of the tenancy agreement”.

The tenant succeeded in resisting the lease termination, but will no doubt be mindful to ensure all future payments are made on the dot.

Southport Realtor Pty Ltd t/as Shores Realty [2014] QCATA 013 Brisbane Senior Member Stilgoe OAM 28/01/2014


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