A Case Study On Renting A Flat In Australian Capital Territory

Background

Jason has recently moved out of home and into a rental accommodation. He is renting a two bedroom flat with his best friend, Sam. Both of them are part time students at the University of Canberra and work full time in the building industry.

Sam was offered a job in Sydney and decided to take to further his career prospects. His lease agreement had another six months to run, and he felt really bad leaving Jason to pay the rent for both of them. Jason was in no position to do this and after the two of them discussed the alternatives, the decision was made that Jason would continue to pay his share of the rent.

To ease Jason’s financial burden, another of their friends, Phil, offered to move in and take over Sam’s rent payments. The landlord was not told of this as there was no real change in the circumstances – the rent was going to be paid and that’s all the agent needed to know.

Everything was going fine for some months, but then Jason was offered a job in Sydney with Sam’s company. The thought of having fun Sam living in exciting Sydney made Jason’s decision easy and as the lease was almost due for renewal he saw it as a good time to get out.

Phil, however, wasn’t ready to move as yet – he had nowhere to go and another six months of his degree to finish. He wanted to stay and a decision was made that if he could get someone else to rent with him, he could stay on and nothing would be said to the rental agent.

Phil found Sarah to share the rent with him. Three months later the agent advised Sam and Jason that the rent will be increased by 5% each month for next six months, the first payment being due in 4 weeks.

The notice also states that the lessor’s agent will be making random inspections with only one day notice and that refusal to allow such inspections can result in termination of the lease by the lessor. Sam and Jason objected to this but the agent said it was his right to inspect the property and this was the only time that suited him. The agent said it didn’t matter if neither of them couldn’t be there – he had a key and will let himself in.

Sam and Jason are not very happy about this arrangement and ask your advice. They also ask your advice in relation to repair to the property, telling you that when the hot water system failed two months ago, the agent delayed repairs for almost a month, stating he had problems finding a plumber. Sam and Jason want to know if they can withhold rent as compensation for having to arrange and pay for the repairs themselves.

In your answer you must consider relevant legislation and/or case law. 

A current case study is about Jason who leaves his home and purchases a two bedroom flat on rent on a sharing basis with his friend Sam. Jason and his friend is a student by profession reading in the University of Canberra and working as a full-time employee in a building construction industry as they enroll in the university as a part-time student to earn its daily bread by doing the job. Sam got a job offer to work in Sydney to enhance its career by taking the opportunity in the future. The rental lease agreement of the flat has six months remaining which will directly impose the burden of rent on Jason as earlier they both are sharing the total rent and after Sam get a job opportunity[1]. The financial position of Jason is not good as they are not able to pay off the total rent of the flat which was shared with his friend Sam as after Sam got new job offer in Sydney so the entire rent is to be borne by Jason as discussed by both the friends as they search for various alternatives to pay off the total rent. To compensate the total rent, one of their friends Phil will share the flat with Jason to lessen its total load of paying the total rent[2]. The changes made by Sam and Jason are not conveyed to the landlord about this as they think there is no bigger change takes places in the existing rental agreement[3]. After sometime, Sam got job in Sydney in the similar company of Sam so Jason excited to leave this flat as they got chance to live with its best friend Sam in Sydney and the rental lease is also gets finished which needs to be renewed so Jason thinks that this is a right time to leave this flat. Phil’s degree has not yet started like six months are remaining for its study to get complete so they can’t leave this flat so he found Sarah to share the apartment with him to pay off the total rent of the flat[4]. After 3 months, the landlord advice both the tenant Jason and Sam that the rent of the flat will increase by 5% for next six months period and the first payment of the rent will be due in 4 weeks. The landlord files a notice in which a landlord specifically mentions that he will inspect its property for one random day and if the tenant refuses for the inspection the lease will get terminated as mentioned in the agreement[5]. Sam and Jason raise objection against the clause of inspection but the landlord said that it’s his right to inspect as both Sam and Jason knows this thing that if a landlord will inspect the property then they will get to know the truth that Sam and Jason are not living on its property and the same property is given to some another party that is Phil and Sarah without his permission and prior intimation. To defend its position and raise obligation regarding the landlord that he raises the rent by 5% as two months earlier, the hot water system equipped in the bathroom got damaged which requires repairing and the owner delayed this repairing due to this the tenant has to face problems in finding the plumber as they are new to the place and also did not get time from its study and job. Sam and Jason want to take the costs of repair as the compensation in arranging the plumber and meeting all the accessories used in repairing the electric hot water system in the bathroom by withholding the amount of rent asked by an agent.

Issues Faced by Tenants

In the current case study, the rental agreement of Jason and Sam belongs to Canberra which falls under the Australian Capital Territory according to which tenancy and landlord laws will be applied to resolve all the queries related to the current matter. According to this law, 4 weeks rent taken from the tenant living on rented premises as per the bond agreement of rental lease and 1 month’s advance rent demanded by the owner or its agent who acts on the behalf of the owner of the property. As per this law, the rent of the premises will only get increases after 12 months and not before then that otherwise the whole rental agreement will get terminated in absence of violating the stated rules and the regulations. The agreement of the rental lease can only be terminated by an agent only by giving 8 weeks prior notice to tenants to give them a reasonable time to search for new place according to its preferences in terms of location and the budget[6]. On another hand, a tenant can terminate the agreement of lease of the property by giving 3 weeks notice to its agent or landlord to notify them to search for another tenant.

In the case of Sam and Jason, an agent gives notice to both of them by giving notice of 4 weeks in which the tenant has to pay the increased rental amount is not an appropriate as per the law as it is clearly stated in the law that landlord is required to give a notice of 8 weeks for increasing the rent for its existing tenant agreement mutually decided by the tenants and the landlord[7]. In the notice given by the landlord about the rental amount increase, one clause is related to the random inspection of the site is valid to refuse by Sam and Jason as the period of giving notice to the tenant is not appropriate as per the law and for which Tenant can terminate the lease agreement or maintain the previous agreement and will pay the rent as per the old agreement as the period of giving the notice to a tenant is not suitable as this should be 8 weeks instead of giving just 4 weeks as this is regarded as very low time for a tenant to repay the increasing rent[8]. In this case, the original tenants such as Sam and Jason has given its rented premise to Phil as they both have to leave this property for getting a new job in Sydney and after this Phil also search its new partner Sarah to live with them to share the total amount of rent equally to lessen its load of bearing the total amount of rent when the Sam leaves the place when they got job in the same company as its friend.

Legal Remedies Available

One of the problem raised by both Sam and Jason that in past two months period, when the electric water heating system gets damaged then both of them inform an agent about this to repair the same and after listening to the problems of tenants, an agent did not resolve the issue due to which Sam and Jason have to face difficulty in searching for plumber and incur expenses. It is clearly mentioned in the state and local laws that landlord of a rented premise is liable to repair its own property when a tenant inform them about the same. But in this case, the landlord did not resolve the issue due to which the costs have to borne by the tenant. As per the law, Sam and Jason is required to deduct the cost of repairs and searching for the plumber from the total rent payable to the landlord as on informing an agent about the issue, the landlord ignore the problem of a tenant is consider as an intentional negligence of an owner is not resolving the daily maintenance and the repairing issue of a tenant[9].

In this case study various legislation will help in resolving this issue such as residential Tenancies act 1997 applicable for considering the cases falls under the Canberra in the Australian capital territory as rental laws of all the parts of the Australia are especially mentioned which help all the individuals to judge all the cases accordingly in order to resolve each and every case. Tenant protection laws are also used in taking a reasonable decision for the case of Sam and Jason to justify the action of a landlord who increases the rent of the premises and also inspect the property on a random which is opposed by Sam and Jason and takes a legal help which reveals that the action of an agent is not appropriate in accordance with the law[10]. Repair and deduct principle uses in this case under which, a tenant held responsible for deducting all the repairing expenses incurred by them on the rented premises by deducting the same from the total rent payable to the landlord as this is considered as their right.

• Tenant will deduct the costs of repairs from the rent
• Tenant will not pay the increasing rent by 5% as the notice period given by the landlord is of 4 weeks is not valid as per the law by also disregarding the right to inspect the property.

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Hulse, ,. K. (2018). Private rental in transition: institutional change, technology and innovation in australia.

Parker, D. (2018). Home sharing, airbns and the role of a law in a new market Pardigm. UniSA student law review , 3.

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Residential Tenancies act 1997. (2018).

Rowley, S. a. (2018). The Private rental sector in australia.

Whincop, M. K. (2018). Policy and Pragmatism in the conflict of laws. Routledge .

Yates, J. a. (2015). Market provisio of affoordable rental housing: lessonss from trends in Autsralia. Urban POlicy and research , 5-19.

[1] Rowley and James, (THE PRIVATE RENTAL SECTOR IN AUSTRALIA, 2018)

[2] Berry, Investment in rental housing in Australia: Small landlords and institutional investors. (Housing Studies, 15, 2010) 661-681.

[3] Graycar, Family law reform in Australia, or frozen chooks revisited again?. (Theoretical Inquiries in Law, 13(1), 2012) 241-269.

[4] Yates and Wulff, Market provision of affordable rental housing: lessons from recent trends in Australia. (Urban Policy and Research, 23(1), 2015) 5-19.

[5] Hulse, Martin, James and Stone, Private rental in transition: institutional change, technology and innovation in Australia. (2018)

[6] Parker, Home-Sharing, Airbnb and The Role of the Law in a New Market Paradigm. (UniSA Student Law Review, 3, 2018)

[7] Tenancies’ protection law, 2017. Available through: < https://www.rentalagreementsdiy.com.au/tenancy_laws_in_australia.php> [Accessed on 20^th October 2018].

[8] Rental law, 2018. Available through: < https://realestate.findlaw.com/landlord-tenant-law/is-my-landlord-responsible-for-repairs.html> [Accessed on 20^th October 2018].

[9] Repairs and maintenance in rental properties, 2018. Available through: < https://www.sa.gov.au/topics/housing/renting-and-letting/renting-privately/property-condition-and-maintenance> Accessed on 20^th October 2018].

[10] Residential Tenancies Act 1997, 2018. Available through: < https://www.legislation.act.gov.au/a/1997-84/default.asp> [Accessed on 20^th October 2018].