Know your residential tenancy agreement

Brown Couch enthusiasts will recall our recent comments on real estate agents seeking to charge tenants for their time in the CTTT. Well, since then, a residential tenancy agreement with a strange set of additional terms has caught our attention.

It reads:

clause (x) - Should a dispute arise as a result of the tenants responsibilities, or neglect or failure to follow the Residential Tenancies Act or this agreement & the agent or its employees is required to prepare for &/or attend a CTTT hearing the tenant will be charged at a rate of $xxx.00 +gst per hour or part thereof.
clause (y) - The tenant agrees that inspections of the above property will be held on a quarterly basis. If the home is found in an unsatisfactory condition at these inspections a second inspection will be made and you will be charged $xx.00 for this return visit.

Now we've already suggested that it's a silly idea for real estate agents to try and charge tenants for their costs in the Tribunal. But it's worth revisiting some of that information because it similarly applies to fees for a 'second inspection' of the home. Here's what we said earlier:

The Residential Tenancies Act 2010 stipulates that tenants can only be required to make certain types of payment to the landlord under their residential tenancy agreement. These are bond and rent, and in many instances charges for water consumption ... Requiring a tenant to pay [other, non-prescribed costs], would be in breach of the law, and could leave a landlord liable for a $2,200 fine.

Clause (y) presents an additional problem, because a landlord (or their agent) is only allowed to inspect the property a maximum of four times in any twelve month period. Technically, a 'second inspection' would be okay (as long as proper notice is given), but it should be counted as one of the four... so sensible landlords might want to consider other ways of harassing tenants into doing the washing up more frequently.

Right. So legislation doesn't allow landlords (or their agents) to ask tenants for more money, or to visit too often. But what if terms allowing such things are actually written into the contract? Can a landlord or a real estate agent use additional terms in a residential tenancy agreement to hold a tenant to a higher standard of behaviour, or to place upon them further liabilities, than are allowed under the Act?

The answer is a resounding 'NO'! The Act is clear (at section 219) that 'contracting out' is prohibited. Any term that excludes, evades or limits the operation of the Act (or the Regulations) is void, and steep penalties can apply to anyone who tries it on.

"Great news!", you might be thinking... "we can all relax and give thanks to the Parliamentary Council for drafting such a useful law, and to the NSW Government for keeping it intact! Our rights as tenants are impervious to the innovations of the real estate industry!"



But let's not get carried away...

Something that has also caught our attention of late is the curious case of Grima v Plummer - a decision made under the old (1987) Act, to which a similar 'contracting out' provision applied. In this matter, the CTTT allowed a landlord's claim for cleaning charges, after the tenancy had ended, based on additional terms that created obligations "more onerous than those contained" in the standard form residential tenancy agreement. These terms required the tenant to leave the premises "in a clean and tidy state (as per the condition report)", and to "meet the full cost of flea extermination"; whereas the 1987 Act required tenants to "leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, as set out in any condition report".

With respect, we'd have thought that an outgoing tenant's cleaning obligations were pretty bread and butter stuff for the Tribunal. For a decision this kind - which relies on terms that contracted out of sensible legislative provisions - to appear on the record is surprising. But it serves as a pertinent reminder that additional terms can bite - even when they're not actually allowed!

If you've got a residential tenancy agreement that contains strange additional terms, do what the lucky punter with clauses (x) and (y) did - call your local Tenants' Advice service for a chat.