WA Break Lease Costs Property Condition Reports

[WiserNow]

Hi

2.5 months into the lease 1 of the tenants advises they are having to move back to NZ but they have a new tenant to take their place. So I advise about the requirement to do a new property condition report and we agree, in writing, this cost will be borne by them.

All organised, paid for and go to finalise the second lease with the 1 tenant who remained & the new one. Had an issue with the lawn and couldn't transfer the bond, relationship breaks down and tenants wants to break the lease again but in 1 mth. So I cannot use the property condition report and it has to be done again when they exit. Cost of $350 x 2. This is a financial loss I have had to occur due to their decision to break it twice. Tenant disagrees.

We end up at the magistrates court, magistrate rules in tenants favour for both property condition reports based on this being a cost which has been brought forward and I would have to pay for it anyway. But rules in my favour for the advertising costs. So why is the property condition report a cost brought forward but the advertising for new tenants is not and is borne by the tenant?

As property condition reports are mandatory now in WA I have no choice. The other issue I experienced was one of the tenants was not present. Had signed the legal representation over to the other tenant but not used the correct form and not complied with section 22 (ie other tenant was not an agent nor a legal representative).

I also claimed for loss of rent but gave the new tenants keys day 2 after break lease but agreed they didn't take up residency until 4 days after the end of the break lease due to cleaning (which is the date that is on their lease) although I agreed they could store some items there. Magistrate gets the dates wrong (from end of one lease to another) and stated as they had taken possession of the property I am not awarded any loss of rent.

I feel like appealing based on section 22 and also feel there needs to be a good case history set for the issue which is a real concern around the property condition report costs. Especially with it becoming more common in WA. It has just happened again to me with my new tenants and within 6 months of a 12 month lease.

I do not see the logic on how in 1 year three property condition reports are seen as simply costs brought forward but advertising costs are borne by the tenant in a break lease.

 

[Worldly1]

Hi Ash,
Have you had a chance to read through all the replies in the LawAnswers thread "Tenant Broke Tenancy Agreement but Court Awarded Bond"? As you would have seen from that situation, a successful appeal in WA if it was heard by the Magistrate as a minor case is unlikely (unless natural justice was denied). At least the Magistrate ordered some costs in your favour from what you've said - the decision was not all bad news.

As frustrating as it is, the Magistrate's decision will generally stand. See section 26 of the Residential Tenancies Act 1987 (WA) and also this WA appeal of a minor case which ended up going to the Supreme Court arguing that natural justice had been denied and ultimately the appeal was rejected. Quite costly!

The WA Department of Commerce 'Renting out your property - a lessor's guide' was a good general resource, but of course, you've progressed with your dispute to Magistrate.

 

[WiserNow]

I did read the Tenant Broke Tenancy Agreement - I thought appeals were heard by the Supreme court and this wasn't mentioned? Tried to find out how it was appealed.

Also read the WA appeal of a minor case. Grounds of appeal are slightly different. I wanted to appeal on two grounds:

Magistrates made a ruling on a piece of evidence submitted by the tenants however I was not provided with an opportunity to view the evidence rather the Magistrate read part of it out - natural justice denied. Prior to this evidence being submitted the magistrate was calculating the cost of the property condition report on a pro - rata basis.

The second tenant was not present. A letter was presented handing over legal representation to the other tenant. However under Section 22 of Residential Tenancy Act http://www.austlii.edu.au/au/legis/wa/consol_act/rta1987207/s22.html : must be in a form approved by the Minister and represented by a property manager. The reason I object to this is that a verbal agreement was made with the missing tenant no 1 they would pay for the property condition report. Even had an email and advising tenant 2 would pay once (tenant 2 was in To line) I sent through the invoice. After all organised, they provided access to property, I paid for it NOW they are saying they are not going to pay for. Why does a magistrate not recognised promissory estoppel or is it completely up to the applicant and defendant to put forward this?

Appreciate help understanding the system.

 

[Sarah J]

Hi Ash,

As @Worldly1 wrote, appealing to the Supreme Court is quite costly and would probably cost you more than the costs of the three reports. You may need to seek legal representation before the Supreme Court, and before the appeal, you will first need to appear before court and make an application to appeal. In most cases, cost recovery is around 2/3 of actual costs spent by the winning party (if you win the appeal). For the losing party, they will usually have to pay the winner's costs.

In relation to natural justice, this refers to a denial of opportunity to appear in general. It is not a denial of natural justice that you do not get to make a certain argument before the Magistrate or you did not get an opportunity to view part of the evidence. Natural justice is when the applicant was denied the opportunity to appear before a court or the opportunity to argue before a court. What you mentioned would be an appeal on procedural grounds, not natural justice grounds. For such appeals, you will need to prove that the procedural irregularity affected the outcome of the case, in that the judgment would have been different had the procedural irregularity not occurred.

Promissory estoppel, or any form of equity, is discretionary and is not an as of right. The judge can decide to estop (i.e. prevent) a person from going back on a representation if it would be in the interests of justice to do so. This takes into account a number of factors, including the relative bargaining powers of the parties. Further, there are some things, including allocation of certain costs, that cannot be contracted out of because the law is designed to protect each party to a tenancy agreement, but there are regulations designed to protect the interests of residential tenants because they are generally in weaker bargaining positions. Hence, you will need to work out why condition reports should be born by landlords under statute and/or common law. The Magistrates' judgment (with reasons for the decision) should be a good place to start.