Thursday, February 4, 2016

Frustration or breach for Lidcombe tenants?

A Lidcombe apartment complex suffered extensive damage to its roof during a storm this week - reports suggest it may be uninhabitable for months. So arose the question of remedies for affected owners and tenants. Whilst compulsory insurance for the strata corporation should ensure owners are covered for 'loss of rent' - that is, alternative accommodation as needed and actual rent forfeited - it may be of no use to tenants.

The roof in question

Our Senior Policy Officer Ned was quoted in Fairfax Media as saying the issue of tenant remedy is "...a tricky one. There's a question about the circumstances under which the tenancy might end, and there's questions around the circumstances under which a tenant might recover costs of damaged furniture and items." 

By way of clarity, such issues may be cause for either 'frustration' of a tenancy agreement, or action arising from a breach of the landlord's obligations under the Residential Tenancies Act 2010.

Section 109 of the Residential Tenancies Act provides that a landlord or tenant may serve the other party with a notice of termination on the ground that the residence has become wholly or partly uninhabitable due to no fault of either party. For example, a residence maintained in a reasonable state of repair may suffer damage due to a thunderstorm. A notice served under Section 109 need not provide any minimum notice period and may be issued in either a fixed term or a periodic agreement. Such action implies no breach of the tenancy agreement by either party, and precludes further discussion about compensation for any loss arising.

On the other hand, section 63 of the Act provides that it is the landlord's responsibility to provide a tenanted residence in a reasonable state of repair. So, for example, a landlord may fail to provide a residence with a roof in reasonable repair, which may only become apparent after a bout of severe weather. This would mean the tenant has suffered a detriment as a result of the landlord breaching his or her obligations - potentially giving rise to not only termination rights for tenants, but also a compensation claim for any economic loss suffered.

To add a further complication - a landlord might try to avoid the obligation by pointing to a strata manager, saying "it wasn't me, it was them". But just as a landlord may be liable, under a residential tenancy agreement, for the defective work of a plumber or electrician with whom they have contracted, so too are they responsible for work carried out by or on behalf of their owners' corporation.

Of course, we don't claim to be privy to the details of the Lidcombe case. But it's worth noting that there is more than one way situations like this may play out. Affected tenants should visit to view our factsheets on storm damage, repairs and maintenance and renting in a strata scheme. For further information tenants can seek free advice from their local Tenants' Advice and Advocacy Service.

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