Douglas v Warragrove Pty Ltd T/A Combined Property Rent [2010] QCAT 315

CITATION: Douglas v Warragrove Pty Ltd, T/A Combined Property Rent [2010] QCAT 315 PARTIES: Peter Douglas v Warragrove Pty Ltd, T/A Combined Property Rent APPLICATION NUMBER: 1621/10 MATTER TYPE: Residential tenancy matters HEARING DATE: 21 June 2010 HEARD AT: Brisbane DECISION OF: J Cowdroy DELIVERED ON: 7 July 2010 DELIVERED AT: Brisbane ORDERS MADE: The Residential Tenancy Authority is ordered to: Pay $502.86 to the applicant Pay $457.14 to the respondent CATCHWORDS : Rental bond dispute – Residential Tenancies and Rooming Accommodation Act 2009, claim of excessive hardship, lessor’s duty to mitigate loss, findings that both parties had claim over a portion of the rental bond APPEARANCES and REPRESENTATION (if any): APPLICANT : Mr Peter Douglas RESPONDENT: Ms A Martin for Warragrove Pty Ltd -- 1 of 4 -- REASONS FOR DECISION The Issue 1. The issue in dispute is whether the applicant is entitled to the rental bond of $960. Background to the Dispute 2. The parties entered into a written tenancy agreement in respect to property at 2/43 Devoy Street, Ashgrove for a period of six months from 7 November 2009 until 7 May 2010, although Mr Douglas has been a tenant at that property under previous agreements since October 2006. The rent for the premises was $320 per week. 3. During the course of the agreement, the applicant’s health deteriorated and affected his ability to work, as a result of which he was placed on disability support pension. Mr Douglas has a number of health conditions and a letter from Dr Bashir-Elahi states that the applicant has moderately severe depression with chronic fatigue and short term memory issues. Dr Bashir-Elahi also referred to “hardship issues” including financial stress and the need to move to cheaper accommodation to relieve that stress and improve the applicant’s health. 4. On 1 March 2010 the applicant advised the agent of his change of circumstances, indicating that he would need to break the lease as he could not afford the rent. On that date the agent wrote to the applicant enclosing a form called “Agreement to Terminate Fixed-Term Tenancy” and asked him to sign and return it. The agreement set out the expenses involving in reletting and the comment was made “no charge if new tenants start after 11 March 2010”. Mr Douglas returned the signed form on 15 March 2010. 5. Five weeks before the expiry of the fixed term agreement, the applicant was offered Department of Housing accommodation. He remained at the rented premises for a further two weeks and three weeks before the end of the agreement he vacated the premises and moved to his new accommodation. 6. The applicant seeks the return of the bond of $960. The original bond held by the Residential Tenancies Authority was for $1200, however $240 had been released to the applicant. The respondent claims that $960 should be released to it on the basis that the applicant owes three weeks rent from 16 April 2010 until the expiry of the agreement. The applicant refutes the respondent’s claim on the basis that his circumstances constitute excessive hardship as well as a contention that the agent did not take appropriate steps to mitigate the loss incurred when he terminated the agreement. Applicant’s Submissions 7. He gave the respondent 10 weeks’ notice of his intention to vacate the premises before the expiry of the fixed term agreement. He made it clear that he was moving because he could not longer meet the rent payments. The agent advised him that it would be in his interests to formally advise of his intention to break the lease closer -- 2 of 4 -- to the expiry of the agreement in an effort to save fees associated with breaking the lease. He received the break lease form and returned it on 15 March 2010 because at that time it was 8 weeks prior to the expiry date. 8. A sign advertising the premises for rent was set up on the property for about two weeks, rather than the entire period it was available. He had advised the agent that he could vacate the premises upon one day’s notice. He believed the premises were easily rentable. Not many people were shown through the property. Respondent’s Submissions 9. The property was listed from 15 March 2010. The agency did not list a property for rent until the break lease form was received. There was one application for tenancy but the person did not proceed. The tenant did not return the keys until 27 April 2010 at which time he advised he would no longer be paying rent. There were not a lot of people looking for properties and there were a lot of rental properties on the market. Towards the expiry date of the fixed agreement, the rent was reduced to $300 per week. The Legislation 10. The Tribunal has jurisdiction to hear and decide this matter pursuant to sections 11 and 12 of the Queensland Civil and Administrative Tribunal Act 2009 (“the QCAT Act”). It concerns a claim by the applicant against the respondent for relief under the Residential Tenancies and Rooming Accommodation Act 2009 (“the Act”) in respect to a residential agreement over premises formerly occupied by the tenant. 11. Section 429(1) of the Act provides that if there is a dispute between the lessor and tenant about an agreement, either party may apply to the Tribunal for an order and the Tribunal may make any order it considers appropriate to resolve the dispute. 12. Section 310 of the Act provides that the tenant may apply to a tribunal for a termination order because the tenant would suffer excessive hardship if the agreement were not terminated. 13. Section 343 of the Act provides that if an application is made to a tribunal for a termination order because of excessive hardship, the tribunal may make the order if it is satisfied the applicant has established the ground of the application. 14. Section 362 of the Act provides that a lessor must take all reasonable steps to mitigate a loss or expense because of a tenant’s action. The lessor is not entitled to receive compensation for any loss or expense that could have been avoided by taking reasonable steps. The Tribunal’s View 15. The Tribunal considered the evidence and submissions of both parties and had regard to the legislative obligations imposed on both the lessor and the tenant. 16. The applicant argued that he should be granted relief on the basis of the provisions relating to excessive hardship. Those provisions enable the Tribunal to terminate an -- 3 of 4 -- agreement if excessive hardship is established. In the present matter, termination of the agreement has already occurred, consequently this provision is not open to the applicant. 17. In respect to the argument that the respondent has not taken all reasonable steps to mitigate the loss, the evidence is that the premises were listed for rent on the day that Mr Douglas returned the form indicating he intended to break the agreement. In assessing whether the landlord took all reasonable steps to mitigate the loss, the Tribunal considers it significant that it was only towards the expiry of Mr Douglas’ agreement that the rent was reduced to $300. By that time, according to Mr Douglas the premises had been available for at least 6 weeks. 18. The Tribunal considered that it was not appropriate for the respondent to have waited until Mr Douglas’ agreement had almost expired before deciding to reduce the rent in order to attract a tenant. The agent had knowledge about the depressed state of the rental market and that should have alerted it to the need to reduce the rent long before it took steps to do so. If that had been the approach adopted by the agent it might have acquired a tenant for the premises. In such a case, it would not be unreasonable for Mr Douglas to have been required to compensate the landlord for the difference in rent. 19. Mr Douglas was offered Department of Housing accommodation because of his personal circumstances. Whilst the provisions relating to termination for excessive hardship are not available to the applicant, the Tribunal has a duty to make orders it considers fair and equitable to all the parties. 20. Given the applicant’s circumstances, it was reasonable for the landlord to have taken steps to mitigate its loss from the time Mr Douglas gave notice on 15 March 2010. Mr Douglas was concerned that the sign advertising the premises for rent was only present for about two weeks. I accept his evidence on this aspect. The sign should have been present from 15 March 2010 and remained on the premises from that time. Merely listing the premises on the internet and putting up a sign on the premises for a few weeks is insufficient to demonstrate that all reasonable steps are being taken to attract a new tenant. 21. In the circumstances, I consider it is reasonable that Mr Douglas pay rent up to and including 26 April 2010, which is a period of six weeks after he indicated his intention to vacate. He has paid rent up to and including 16 April 2010. I direct that 10 days rent, being the sum of $457.14 be paid to the landlord from the bond, with the balance being released to the applicant. 22. The Tribunal orders that the Authority release the rental bond in the following manner: To the respondent the sum of $457.14 To the applicant the sum of $502.86 -- 4 of 4 --