In an unusual move, the tribunal has decided the increase “to market rent” from $320.00 to $420.00 a week was excessive and cut it back to $370 a week.
The tribunal says it was at a loss to understand how landlord Rowan James Turnbull could consider a 30% rent increase to tenant Julian Richards reasonable and justified.
Adjudicator J Greene says the tribunal does not lightly interfere with rent charged, but section 25 RTA (which deals with market rent determinations) was enacted for a reason.
Market rent is defined as the rent that a willing landlord might reasonably expect to receive, and a willing tenant might reasonably expect to pay, taking into account the general level of rents for comparable tenancies of comparable premises in the locality.
“Reasonableness is the key word in the statutory provision.”
Greene says he found the rent increase to $420 per week - later reduced to $400 - exceeded the market rent by a substantial amount. “The property manager ameliorated that, but even then, the rent at $400 per week still exceeded the market rent.”
Based on the evidence both parties produced, Greene found the market rent for the property was $370.00 per week, $30 less than the rent increase eventually settled on.
The rent increase took effect 60 days after the rent increase notice, so the period of time involved was about nine weeks and with the tribunal’s decision on fair rent, Turnbull was ordered to refund rent of $270 to Richards.
The tribunal says what the case between Turnbull and Richards illustrates is how one decision - possibly in hindsight, ill- advised - to significantly raise the rent can destroy a landlord/tenant relationship that had been without issue before then.
Both parties agreed the landlord’s decision to raise the rent ‘to market rent’ was the catalyst for all that followed.
“Often landlords give no thought to the consequences for a tenant of such a large rent increase,” tribunal Greene says.
In this case the rent increase was reduced to $400 per week after property manager Four Seasons Realty was hired by Turnbull, but by then the relationship had been damaged irreparably.
For Richards, this set in chain a process whereby he almost forensically looked at every perceived defect and repair issue, which before then had not concerned him. He relentlessly emailed the landlord. His tone changed completely. He became demanding and, objectively viewed, unreasonable, in his dealings with the landlord, Greene says.
This barrage of communications led to great emotional strain on Turnbull. Greene says it led to him believing the tenant would make constant demands for repairs in an effort to be as difficult as possible.
For both parties, it led to stressful and time-consuming litigation and a two-day hearing in the tribunal, with all the preparation of the significant documentation produced and responded to; the accusations and counter- allegations; and the entrenching of positions.
Greene says he observed parties who each believed they had the moral high ground with each the aggrieved victim of the actions of the other.
“In fact, objectively viewed, neither party emerges as a blameless victim. The more considered position was that put forward by Four Seasons Realty, which was also dragged into what was essentially a dispute between Turnbull and Richards, triggered by the communication of a significant rent increase.
The tenancy started in September 2020, and for much of it, the relationship between Turnbull and Richards was without incident.
That changed following the notice of the rent increase in May last year, but mentioned at the end of April.
Once that happened the relationship between Turnbull and Richards became fractious and they both filed proceedings with the tribunal.
Turnbull claimed compensation of $1,713.50 for garden work and compensation for harassment by the tenant and for the landlord’s time defending the tenants’ application.
Richards claimed compensation and/or exemplary damages for breaches of quiet enjoyment amounting to harassment; Turnbull’s failure to provide and maintain the premises in a reasonable state of repair; a market rent determination; a declaration the termination notice was retaliatory; and the landlord’s unreasonable demand the tenant’s flatmate leave the premises and his refusal to allow the tenant to have a flatmate after that.
Turnbull’s claim for gardening work compensation was thrown out after the tribunal heard his brother did the work and did not charge for it.
The tribunal also declined his claim for harassment saying an application for compensation for a breach of quiet enjoyment (which, if it amounts to harassment is an unlawful act that can attract an award of exemplary damages) is only available to a tenant but not to a landlord for actions by a tenant.
“Yes, the tenant behaved badly by continuing to bombard the landlord with emails, says Greene but Turnbull took the appropriate action by appointing a property manager, better skilled at responding to a (by then) demanding tenant.
“There is also no basis on which the tribunal can award a party compensation for their time and effort defending a tribunal application.”
Greene also dismissed Richards compensation claim against Turnbull for breaches of quiet enjoyment amounting to harassment.
“I accept tradespeople might have arrived without notice on occasion. But the tenant was - following the notice of the rent increase - pursuing the issue of repairs relentlessly. What did he expect? And with the restrictions on contractor availability the result of covid-19 disruptions, some degree of tolerance is necessary if repairs are to be done. These occasions were annoying possibly, but do not amount to compensable breaches.
“That the tribunal can award compensation does not always mean that it should. The overall context of the tenancy must be considered,” he says.
However, the tribunal did award Richards $400 compensation for the landlord’s gardening which effectively took out nearly all the trees and other vegetation that had provided some privacy.
“After the removal of almost everything, he had no privacy,” says Greene. “And because he could no longer use the previously shared area where the washing line was (due to the aggression of the neighbouring tenant) he had to hang his washing at the front of the property.
“Turnbull failed to recognise this loss of privacy aspect. He appeared dismissive of the tenant’s concerns.”
He says the removal of most of what Richards had planted in the vegetable garden was also an interference with his quiet enjoyment. What Turnbull considered to be garden weeds Richards saw as useful seed-producing plants.
Although Richards withdrew the claim that selling the property was a ploy to end the tenancy, for completeness Greene dismissed the application for a declaration that the notice to terminate the tenancy was retaliatory. “Richards has since accepted that the landlord is genuinely selling the property.”
Richards claims to the tribunal included issues concerning his flatmate - firstly the landlord evicted the flatmate and secondly he then unjustifiably refused to him to have another flatmate.
Richards says Turnbull took a stance against his flatmate because he had tattoos on his face and was a bad person who was involved with drugs.
He told the tribunal Turnbull wanted references for his flatmate. He then insisted the flatmate go because he had been told by the police he was a bad person.
Richards also believed the landlord refused to allow him to have a flatmate after that.
Greene says confusion appears to have arisen because Richards kept enquiring about sub-letting the tenancy - which he could not do without the landlord’s consent.
Turnbull told the tribunal all the communications referred to sub-letting, which he was not prepared to agree to. In fact, Richards says he confused the wording and really was asking for consent to have a flatmate.
“This is not an issue the tribunal can address by awarding compensation,” says Greene.
“While both parties say they were confused about what each was asking, I think it probable they each knew what the other’s understanding was. But the relationship had become so strained that neither was willing to take a more reasonable approach.
“Richards did not need consent for a flatmate. If he thought he did, he just needed to ask ‘may I have a flatmate’? Turnbull knew he could not oppose a flatmate. But he chose to interpret the tenant’s emails strictly as seeking consent to sub-let. All he needed to ask was ‘do you mean you want a flatmate rather than sub-letting the tenancy?’.
Greene says Richards was not prevented from having a flatmate. “He could have had a flatmate share his tenancy at any time.
“Nor did Turnbull evict the first flatmate. Essentially the parties were talking past each other. And all the while there seems to have been interference by the neighbouring tenant who had developed a dislike of Richards and his flatmate.
“It seems to the tribunal the break down in the relationship between the two neighbouring tenants was an influence in much of what took place,” says Greene.
At the end of the hearing, Turnbull was ordered to pay Richards $670 in total compensation for breaching his privacy and a rent determination refund.