Private residential tenancies

Contributed by Ann-Margaret Walsh and Piercy Porter and current to 1 September 2005

APPLICATION FOR TENANCY

The owner/agent may require a prospective tenant to complete an Application for Tenancy form. The Application may ask for details of the tenant’s present and previous addresses, work address, references from previous owners/agents, and names of personal referees. The information on the form is used to assist the owner/agent in selecting who they think would be the best tenant. Although the applicant does not have to provide all the information requested, the owner/agent might not favour someone who refuses to answer all their questions.

Prospective tenants should be aware that if they are accepted by the owner/agent, the application form could bind them to a tenancy whether they want it or not. Therefore an applicant should be wary about applying for a property unless they are sure it meets their requirements. The applicant should also make additions or change anything with which they disagree before signing the form. Both the owner/agent and the tenant should initial the changes.

If the applicant changes their mind about the property they should notify the owner/agent as soon as possible, and preferably before being selected as a tenant.

There may be a provision in the application form for the prospective tenant to give permission for the owner/agent to do a credit check. Federal privacy laws do not allow owners/agent to obtain information about a prospective tenant’s credit history without their consent: see further PRIVACY RIGHTS .

Application/Option fees

An option fee may be charged by an owner/agent while they consider the application. If the application is successful, the fee must be applied to the first rent payment. Where an application is successful and the prospective tenant decides not to take the offer for tenancy, the fee may be forfeited. However, this can only occur if the application for tenancy says that the applicant will lose the fee. If the application for a property is unsuccessful, the option fee must be returned (s.27(2)). The applicant should therefore examine the terms of the application for lease very carefully.

A deposit or holding fee is not the same as an option fee. If it is agreed that the tenant will rent the premises, the tenant may pay a deposit or holding fee, so that the premises are not let to someone else. This deposit should be applied to the rent or bond once the tenancy commences. If the tenant decides not to move in, the owner/ agent may keep the deposit.

Tenancy databases

Tenancy databases, also known as tenant blacklists, are lists of tenants that an owner/agent says have breached the terms of a tenancy agreement. In order to be able to list a tenant, an owner/agent must have obtained the consent of the tenant to pass their details on to the database company. This usually occurs at the time of completing the application and a tenant is either asked to sign a Tenancy Privacy Disclosure Statement, or the application form may contain a clause saying that the tenant agrees to be listed on a tenant database if they breach an agreement.

The Federal Privacy Act and tenancy databases

In 2003 the Tenants’ Union of Queensland lodged 4 complaints with the Federal Privacy Commissioner against TICA Default Tenancy Database (‘TICA’), one of the largest tenant database companies in Australia. In April 2004, the Privacy Commissioner’s findings were that TICA or its members:

• advise tenants when an adverse listing has been made;
• ensure tenants have access to the listing categories;
• use the terms ‘objectionable behaviour’ and ‘repeated breaches’ only if there is a relevant court order’;
• provide tenants with the ability to add a statement to any listing which they dispute; and
• remove tenants from the listing after a specified period of time (four or five years depending on the database).

If the owner/agent considers the tenant to have breached the lease agreement, and if they are members of the database company, they may provide the company with the tenant’s name, date of birth and details of the breach. Any other member of the database company may then access the information. There is an obligation on the owner/agent to ensure the information is accurate.

The Act does not provide tenants with any clear legal protection from tenant database listing, although a tenant may apply pursuant to Section 15 of the Act. This section allows the Court to hear any dispute which arises under a tenancy agreement. A tenant may also lodge a complaint to the Federal Privacy Commissioner pursuant to the Privacy Act 1988 (Cth). For information on how to make a complaint, see Chapter 33: PRIVACY RIGHTS.

If a tenant disagrees with the listing details, they should commence the dispute process by writing to TICA outlining the reasons why they dispute their listing. If a satisfactory reply is not forthcoming they are able to proceed to complain to the Federal Privacy Commissioner. Where a tenant has evidence of loss or damage due to a listing with TICA they are able to claim compensation in certain circumstances. Although the rulings are specific to TICA’s practices it is clear the Privacy Commissioner does not intend to tolerate breaches of the Privacy Act in respect of tenancy blacklists.

COMMENCING THE TENANCY

Fixed Term or Periodic Tenancy

When a tenant and an owner/agent enter into a residential tenancy agreement for a specific period of time, and when the date the agreement is due to end is specified in the agreement, it is known as a fixed term tenancy. This agreement may be either written or verbal, but is usually written.

The tenant and the owner/agent are bound to the terms of the agreement for the specified period. For example, unless there is special condition in the agreement stating the rent can be increased, the Act provides that under a fixed term tenancy agreement the rent cannot be increased (s.30(2)).

A periodic tenancy is not entered into for a specified period of time and may continue indefinitely.

In-going charges

The Act prohibits the payment of any monies by a tenant prior to or at the time of entering into a residential tenancy agreement except for security bond (“bond”), rent, option fee and letting fee (s.27(1) and (2)).

BOND

The amount of bond payable is restricted to the equivalent of four weeks rent. Where the tenant is permitted to keep a cat or dog on the premises, an additional $100 may be required as a pet bond (s.29(b)(i) and (ii)). The restrictions on the amount of bond payable do not apply, however, where the house was the private house of the owner for at least three months prior to renting it out, or the weekly rent is more than $500 (s.29(2)(a) and (b)).

When the owner/agent receives the bond, they must issue a receipt stating the date the bond was received, the name of the person paying the bond, the amount paid, and the premises for which it was paid. Failure to do so can incur a penalty of $4,000 (s.29(4)(a)).

All bond money must be lodged in a joint account or in a Real Estate Agent’s trust account at an authorised bank or building society, or with the Bond Administrator (Schedule 1, s.2(1) and s.29(4)(b), penalty of $4,000). This must take place within 14 days (if it is an owner), or as soon as practicable (if it is an agent) (Schedule 1, s.3). The owner/agent must give a copy of the record of the payment of the bond to the tenant (s.29(d)).

How the bond is disposed at the end of the tenancy is outlined in ‘TENANCY DISPUTES’ below.

BOND ASSISTANCE

Entering into a tenancy can be a very difficult time financially for a tenant. They need to pay the bond, 2 weeks rent in advance, option fee and letting fee prior to be handed the keys to the premises. Homeswest provides assistance for tenants wishing to enter the private rental market through the Bond Assistance Loan Policy (Private Rental Housing Assistance) by providing a loan for a rental bond. The object of this policy is to provide assistance to income eligible people with limited finances, who are homeless or likely to become homeless, if there is no suitable Homeswest accommodation available. This assistance does not extend to a tenant wishing to enter into a Community Housing Program tenancy.

Applications can be made at any Homeswest Office prior to paying the bond on a property. Homeswest will then pay the bond to the owner/agent, who should lodge the bond according to the Act as if it was the tenant’s money. Repayment instalments will be negotiated at the time of loan approval with a minimum repayment of $15 per fortnight. At the end of the tenancy, the normal process for returning the bond applies (see ‘TENANCY DISPUTES’ below).

RENT

No more than two weeks' rent may be charged before or during the first two weeks of the tenancy (s.28(1), penalty of $1,000). However, after this period the rent may be demanded on a different basis. For example, if the tenancy agreement requires the payment of rent on a monthly basis, the first payment of rent will be a maximum of two weeks, and this may then be followed by monthly payments.

The owner/agent must always give a rent receipt to the tenant within 3 days of the rent payment. The receipt should show the date on which the rent was received, the name of the person paying the rent, the amount paid, and the premises in respect of which it is paid (s.33, penalty of $1,000). This does not apply if the rent is paid by the tenant into a bank, building society, or other similar body nominated by the owner/agent.

The owner/agent must keep a record of rental payments (s.34, penalty of $1,000). The tenant may request a copy of such information, but the agent/owner is not required to provide it. It is a good idea for tenants to keep their receipts well organised and to keep their own record of payments.

LETTING FEE

A letting fee is only payable at the commencement of a tenancy and where the owner is using the services of a licensed Real Estate Agent. The equivalent of one week’s rent may be charged as a letting fee, but does not have to be paid on renewal of the lease or the continuation of an expired tenancy of the same premises. A letting fee may not be charged by a private owner (s.86 and s.27(c), penalty of $1,000).

Documentation to be provided at the beginning of the tenancy

In addition to the receipts and documents outlined above, the owner/agent must also give the tenant a booklet setting out their rights and obligations (s.88(2)(c), Reg. 14(2)). A copy of the agreement must also be provided at the time it is signed by the tenant (s.54(1)(a), penalty of $1,000), and an executed copy of the document must be delivered within 21 days, or as soon as practicable (s.54, penalty of $1 000).

PROPERTY CONDITION REPORT

A Property Condition Report (PCR) records the state of the property at the start and end of the tenancy. An accurate, thorough report at the beginning helps to ensure that there are no deductions from the tenant’s bond for problems that existed prior to the commencement of the tenancy.

While there is no requirement for a PCR to be completed by either party, it is certainly in the tenant’s interest to do so as a record of the condition of the property, and to provide a copy of the report to the owner/agent. It may be useful to have the report witnessed and signed by an independent person. The report may be referred to in the event of a dispute involving the return of the bond money.

DURING THE TENANCY

Privacy/Owner’s right of entry

Section 44 of the Act provides that the tenant has a right to peace, comfort, privacy and quiet enjoyment of the premises without interruption by the owner/agent. However, the agent/owner or their representatives may enter the premises in certain circumstances. These are set out in section 46 and include:

• in case of emergency;
• to inspect the premises or for any other purposes, on a day and at a reasonable hour, with notice of between 7 and 14 days in advance;
• no more than once a week, at a reasonable time, to collect rent where this is agreed between the tenant and the owner;
• to inspect the premises on the occasion of rent collection but not more frequently than once every four weeks;
• to carry out necessary repairs, with at least 72 hours' notice;
• to show the premises to prospective tenants, at a reasonable hour on a reasonable number of occasions in the 21 days before the termination of the agreement, with reasonable notice;
• to show the premises to prospective purchasers, at any reasonable hour on a reasonable number of occasions with reasonable notice; or
• with the consent of the tenant given at, or immediately before, the time of entry.

If the correct notice has been provided to the tenant, but the proposed time of entry is not reasonable to them, they may try to renegotiate the time of entry. However, because the Act does not define what is reasonable, the extent of the tenant’s right to refuse entry is difficult to clarify. If the tenant believes that the frequency or times of the visits impinge on their ‘quiet enjoyment’, they should attempt to renegotiate the time with the owner/agent (see sample letter to owner), or they may apply to the court to clarify or restrict the time of entry (see ‘Proceedings in the Magistrates Court’ below). If the breach by the owner/agent is sufficiently serious, the tenant may alternatively seek an order for termination and compensation for breach of agreement.

Repairs and maintenance

Owners are responsible for providing a reasonably clean and habitable dwelling, and for carrying out maintenance and repairs on the premises, consistent with the age, character and life expectancy of the premises (s.42).

Tenants must keep the premises in a reasonable state of cleanliness, must prevent intentional or negligent damage to the property and must report property damage to the owner within 3 days or as soon as practical (s.38).

Section 43 of the Act does enable tenants to undertake repairs and to seek compensation where the owner fails to meet their obligations in this regard. However, most tenancy agreements (such as those provided by REIWA and Homeswest) contract out of or exclude this section and therefore do not allow tenants to get repaid for repairs.

Where it has not been contracted out of, Section 43 provides that if the owner fails to repair or maintain the premises, and repairs are urgent, the tenant may arrange for the work to be done and seek compensation from the owner. It requires that the state of disrepair did not arise from a breach of agreement by the tenant, and that the tenant made a reasonable attempt to notify the owner of the fault, and of the tenant’s intention to get the repairs done.

Repairs must be carried out by a licensed tradesperson and a report prepared by the tradesperson must be given to the owner. The tenant may then seek compensation for the cost of repairs from the owner/agent.

Resolution can be more difficult where the right to compensation does not apply to a tenancy and the owner/agent is reluctant to undertake repairs. The tenant should firstly notify the owner/agent of the fault. If the owner/agent fails to fix the problem, it is recommended, but not essential, that the tenant issue a Notice of Breach (Form 20A). This form is available from the State Law Publishers, but a simple letter is also sufficient.

If the owner does not respond to the tenant’s satisfaction, the tenant may seek a Performance Order from the court, or they may make payment of rent into the court until the owner complies with the performance order; or, in serious circumstances, they may seek a Termination Order (see ‘ENDING THE TENANCY’ below). In any event, if the tenant incurs a loss as a result of the owner’s/agent’s failure to provide maintenance and repairs (such as a water leak or damage to furniture), they may apply for compensation from the court.

Security and locks

The owner/agent must provide the rented premises with locks and any other devices (such as devices for securing windows) needed to make the premises reasonably secure (s.45(1)(a)). It is unlawful for the owner/agent or tenant to change the locks or other security devices without the consent of the other party (s.45(1)(b), penalty of $4,000).

If the owner/agent does not provide reasonable security and the tenant is robbed as a result, the tenant may make an application for compensation for any quantifiable losses (see ‘Proceedings in the Magistrates Court’ below).

Although it is not the tenant’s responsibility to keep the owner informed of security issues, it might assist a tenant’s claim for compensation if he or she can demonstrate that the owner was aware of the problem and failed to remedy it. It is therefore suggested (but not essential) that the tenant notify the owner/agent of inadequate security as soon as they become aware of the problem.

Rent increases

If the owner/agent wishes to increase the rent during a periodic tenancy they must provide written notice of not less than 60 days to the tenant (s.30). The notice must state the amount of the increase and the day on which the increased amount becomes payable. A rent increase is not payable if there has already been an increase within the last 6 months. If the owner/agent does not give the correct notice the tenant can refuse to pay the rent increase until the correct notice is issued. The 60 day period begins only from the date of issue of the correct notice.

Unless there is a special clause in the agreement stating that the rent can be increased, the rent cannot be increased during the term of a fixed term tenancy. Where there is such a clause, 60 days’ notice must be given as outlined above.

If the tenancy agreement is being renewed and the owner/agent wishes to increase the rent, the tenant must agree to the rent increase and a new tenancy agreement signed. However, the owner/agent may refuse to renew the contract if the tenant refuses to pay the new rent.

Excessive rent

There is generally no limit to how much rent can be charged on a property or on the amount by which the rent can be increased. There are only two grounds on which the court can order that the rent or a rent increase is excessive (s.32):

• where there has been a significant reduction in facilities and/or chattels provided with the premises since the tenancy was entered into, renewed or extended (s.32(2)(a)); or
• where the rent has been increased to an excessive level because the owner wants to terminate the tenancy (s.32(2)(b)).

An order that the rent is excessive can only take effect from the date of the tenant’s application to the court, not from the commencement of the problem (s.32(4)). A Magistrate may order that the tenant pay a discounted rent up until the expiration of the tenancy or for a period not exceeding 6 months, whichever period expires earlier (s.32(5)). Because this section has proven difficult for tenants to use, it is advisable to seek advice as soon as the problem arises, and before tenants pursue such an order.

ENDING THE TENANCY

General

Part V of the Residential Tenancies Act outlines the provisions for terminating residential tenancy agreements, the form of notice of termination by owner and tenant, the process for evicting the tenant, the provisions for abandoned premises, and the handling of abandoned goods.

A tenancy can be terminated at any time by mutual consent provided the agreement to terminate is confirmed in writing (s.60(1)(g)). Except where there is mutual consent, different provisions apply to fixed term and periodic tenancies.

Tenants can never be forced to vacate their rented premises unless the owner/agent has a court order (s.80). A breach of this section is serious and should be reported to Department of Consumer And Employment Protection to investigate and pursue prosecution action. A penalty of $4,000 may apply for illegal evictions. If a tenant is threatened with illegal eviction, they should notify their local police station that they are anticipating trouble and request that the police attend if the owner attempts such an action.

If the tenant disagrees with any attempt by the owner/agent to terminate the tenancy, or requires more time to vacate than is normally legally required, they should attend the court hearing and dispute the owner/agent’s application, or seek more time for relocation on grounds of hardship (s.71(3)(a) or s.72(3)(a)).

Tenant to provide owner with forwarding address

At the end of the tenancy, the tenant must provide the owner/agent with their next residential or postal address (s.53(3), penalty of $1,000). This ensures that the tenant receives any notices of action by the owner/agent after the property has been vacated.

Fixed Term Agreement and tenant wishes to end tenancy

Generally, a fixed term tenancy means each party is bound to the agreement until it expires. This means that the tenant is liable for rent and maintenance costs during the lease, even if they have vacated. The ways in which a lease may be ended early include:

By agreement between the parties:

• By mutual agreement between the owner and tenant. It is advisable to put any such agreement in writing so that each party is clear about its terms. Tenants should ensure that they are released from liability to pay costs for breach of contract, or that any agreed costs payable by the tenant are clearly itemised.
• The tenant may notify the owner/agent of their intention to leave, and request that the owner/agent take steps to locate new tenants. The owner/agent is not bound to cooperate, but in most cases the termination can be negotiated if the tenant agrees to pay for any reasonable losses suffered by the owner as a result of the termination of the contract. This may include: rent until a new tenancy commences or the lease expires, whichever happens first; advertising costs to locate new tenants; and maintenance of the premises until they are re-let (the tenant may arrange to do this and reduce their costs). The tenant should negotiate the specific costs and obtain such information in writing from the owner/agent prior to advising of their intention to vacate. Once agreement that the owner/agent will re-let the premises has been reached, they must take all reasonable steps to keep the tenant’s costs to a minimum (s.58). Disputes relating to the cost of breaking the lease can be resolved through the Magistrates Court.

By Court Order:

• Tenants may apply to the Magistrates Court to seek an order for the termination of the agreement on the ground that the owner/agent has breached the agreement (s.75),and may also seek compensation for relocation costs as a result. The Magistrate must believe that the breach is serious enough to warrant the termination. Examples of serious breaches may include: failure to carry out necessary repairs leading to some loss or damage, or breaching the tenant’s right to quiet enjoyment. It will assist the tenant’s case if the tenant can show that he or she has made the owner/agent aware of the breaches.

• A tenant or owner/agent may terminate an agreement (fixed term or periodic) if it is frustrated (s.69). An agreement is frustrated if, otherwise than as a result of a breach of an agreement, the premises are destroyed or declared uninhabitable or cease to be lawfully useable as a residence. Under this section the tenant must give at least 2 days’ notice and the owner must give at least 7 days’ notice of termination (see Form 1C).

Fixed Term Agreement and owner wishes to end tenancy

A tenant is under no obligation to end a fixed term tenancy at the owner/agent’s request, irrespective of the reasons. A fixed term tenancy may only be ended on the grounds detailed below.

By agreement between the parties:

• The owner/agent may ask that the tenant vacate the tenancy early. The tenant can refuse unless the owner agrees to meet all reasonable costs of relocating. This could include (for example) removal costs, service connection costs (telephone, electricity, gas and water), letting fee for new tenancy, the difference in rent between the old and the new premises for the time left on the lease and full bond refund immediately upon vacation. The tenant should negotiate the specific costs, and confirm the terms of their agreement to vacate in writing.

By Court Order:

• An application to terminate the tenancy may be made by the owner/agent on grounds of hardship (s.74). If the application is successful the court may also order compensation to the tenant.

• Where the tenant is in breach of the agreement (other than rent arrears).
Two steps are required (s.62):
i. The owner/agent must issue a notice to the tenant detailing the breach and providing at least 14 days for the tenant to remedy the problem (s.62(3)). This notice is known as a breach notice and must be on a prescribed form (Form 20); and
ii. The owner may then issue a Notice of Termination giving the tenant at least 7 days to vacate (s.62(2)). This must be on a prescribed form (Form IC) (s.61). If the tenant remedies the breach or does not agree that the agreement is in breach, but the owner/agent wishes to proceed with termination of the tenancy, the tenant should attend the court hearing to defend the action. The owner/agent will be required to prove that there is a breach, that the correct notices have been served and that the breach is, in the circumstances, serious enough to justify termination (s.71).

• Where the tenant is in arrears with rent.
There are two options for terminating the tenancy:
i. as soon as the rent is in arrears, the owner/agent can issue a breach notice requiring the tenant to pay the rent within 14 days (s.62(4)). If the rent remains unpaid, he or she can issue a Notice of Termination (Form IA must be used s.61) giving the tenant at least 7 days to vacate the premises (s.62(2)). If the outstanding rent is paid after the breach period has expired the owner/agent may continue with eviction proceedings; and
ii. as soon as the rent is in arrears, a Notice of Termination (Form 1B must be used:s.61) giving the tenant 7 days to vacate may be issued (s.62(5)). A hearing for an application for a court order to evict cannot be made until 21 days after the Notice of Termination has been issued.

If the tenant pays the rent and the court application lodgment fees at least 1 day before the date of the court hearing, the owner cannot proceed with the eviction; that is, the tenant cannot be evicted unless the rent is at least 20 days in arrears.

The tenant should always try to negotiate with the owner/agent for time to pay the arrears.

WHERE THE TERM OF THE AGREEMENT IS ABOUT TO EXPIRE

The lease technically expires on the date specified in the tenancy agreement. There are therefore no notice requirements if either party wants to end the tenancy on the lease expiry date. However, some tenancy agreements contain a clause requiring that the tenant give notice. Although such a clause may be unenforceable, it is sensible to comply with the clause if possible to avoid possible problems. Because there are no notice requirements for the owner/agent, the tenant is advised to contact the owner/agent several weeks prior to the expiry date to ascertain his or her intentions.

If the tenant remains in the property after the expiration of the agreement, the owner may apply for an order of termination and possession up to 30 days after the expiry date of the fixed term (s.72(1)).

Periodic Tenancy and tenant wishes to end tenancy

The ways in which a periodic tenancy can be ended are:

• A tenant may end a periodic agreement at any time without specifying any grounds or reasons by providing the owner with not less than 21 days notice (s.68). The notice must be in writing, and must give the address of the premises, specify the date of vacation and be signed by the tenant (s.67). It is wise to also request details of the arrangements regarding the final inspection and the disposal of bond.

• Tenants may apply to the Magistrates Court to seek an order for the termination of the agreement due to a breach by the owner (s.75) and compensation for relocation costs as a result. The Magistrate must believe that the breach is serious enough to warrant the termination. Examples of serious breaches may include failure to carry out necessary repairs and breaching the tenant’s right to quiet enjoyment. It will assist the tenant’s case if the tenant can show that she or he has made the owner/agent aware of the breaches.

• A tenant or owner/agent may terminate an agreement (fixed term or periodic) if it is frustrated (s.69) (as described above). Under this section the tenant must give at least 2 days’ notice and the owner must give at least 7 days’ notice.

Periodic Tenancy and owner wishes to end tenancy

• An owner/agent may end the tenancy by serving a 60 day Notice of Termination (s.64), using a Form 1C (s.61). Because no reasons are required under a Section 64 Termination, the tenant cannot argue against the reason for eviction. However, they can argue against the eviction if the correct process has not been followed.
For example:

– the Notice was not properly served (s.85);
– the owner has not allowed the appropriate time periods to elapse, that is, the full 60 days’ notice was not given;
– they believe the eviction is retaliatory because they took steps to secure their rights as a tenant within the previous 6 months (s.71(3) and (4)).

• Where the owner has entered into a contract of sale of the premises, and it is a condition of the sale that vacant possession be given to the new owner, the owner/agent may give 30 days’ notice to vacate (s.63), using a Form 1C.

• Where the tenant is in breach of the agreement (other than rent arrears).
Two steps are required (s.62):

i. The owner/agent must issue a notice to the tenant detailing the breach and providing at least 14 days for the tenant to remedy the problem (s.62(3)). This notice is known as a breach notice and must be on a prescribed form (Form 20); and
ii. The owner may then issue a notice of termination giving the tenant at least 7 days to vacate (s.62(2)). This must be on a prescribed form (Form IC) (s.61). If the tenant remedies the breach, or does not agree that the agreement is in breach, but the owner/agent wishes to proceed with termination of the tenancy, the tenant should attend the court hearing to defend the action. The owner/agent will be required to prove that there is a breach, that the correct notices have been correctly served (s.85), that the appropriate time periods have elapsed (that is, the tenant was given the full 14 days to rectify the breach prior to the Form 1C being served on the tenant) and that the breach is, in the circumstances, serious enough to justify termination (s.71).

• Where the tenant is in arrears with rent.
There are two options for terminating the tenancy, as set out above in relation to termination of Fixed Term Agreement by owner under “by Court order.”

TENANCY DISPUTES

Bond return disputes

At the end of the tenancy, unless the owner can establish any amount owing by the tenant either for rent, damage to property, or outstanding bills for which the tenant is responsible (such as water consumption), the tenant should receive their bond monies back from the owner/agent in full. In general terms, a tenant is responsible for leaving the premises in the condition he or she found them, less ‘fair wear and tear’. Fair wear and tear is the result of the ordinary day-to-day use of the premises, rather than anything caused negligently or maliciously by the tenant. For example, worn carpet pile or faded curtains could be considered fair wear and tear.

A tenant cannot refuse to pay rent at the end of the tenancy on the basis that it can be taken out of the bond (s.52, penalty of $1,000).

As outlined in ‘Commencing the Tenancy’ above, the bond must lodged in a special account at the beginning of the tenancy. It can then only be released from the account if both parties sign a Joint Application for Disposal of Security Bond (Form 4), or if one of the parties obtains an order from the Court. The tenant should never sign this form unless the amounts are filled out and he or she agrees with the division. If agreement cannot be reached, either party can apply to the court for the return of the bond as determined by the magistrate.

Generally, there are no time limits for the return of bond money. However, if the money is in an Agent’s trust account and the Joint Application for Disposal of Security Bond form has been signed by both parties, the bond should be paid to the tenant on the date specified in the application or, if no date is stated, within 7 days of receiving the application (Schedule 1, s.7(2), penalty of $1,000).

Failure on the part of the owner/agent to lodge the bond correctly can be used in the tenant’s favour in a court hearing. In such circumstances, the court may order a full refund, because to allow the owner to keep any of the bond money may be seen to be supporting an unlawful act.

Tips for getting your bond back

Because of the high incidence of dispute over bond returns, tenants should make all efforts to protect their interests. The tenant should check the terms of the agreement for any special conditions that must be satisfied (such as carpet cleaning) and attend to these. They should try to attend the final inspection, and should bring their original Property Inspection Report and a witness (preferably the person who witnessed the report at the beginning of the tenancy).

Proceedings in the Magistrates Court

Negotiation is the first step in resolving any dispute, except when rights only apply from the date of the application (such as claims for excessive rent), or it is a matter of some urgency. If negotiations fail, an application may be made to the Magistrates Court (before May 2005, applications were made to the Small Claims Division of the Local Court).

OVERVIEW

If a dispute cannot be resolved without legal intervention, the matter may be taken to the Magistrates Court. Where the matter in dispute is less than $10,000 it will be dealt with under the minor cases procedure contained in Part 4 of the Magistrates Court Act 2004 (WA). Disputes under this procedure are dealt with in a private and informal manner. Agents, including lawyers, may not represent parties unless the Court gives its approval. Disputes over the disposal of bond monies can exceed this amount and still be dealt with in the Magistrates Court.

TERMINOLOGY USED

• Claimant: the person who first applies for a hearing to resolve a problem under the Act.
• Defendant: the person given notice by the court that an application has been made against them, the person on the other side of the dispute.
• Order: the decision of the Court. It usually says what the owner/agent or tenant must do, or how much money has to be paid.

PROCESS

All proceedings of the Magistrates Court when dealing with a minor case are held in private unless the Court otherwise orders.

Relatives and friends of a party may be present at the proceeding unless the Court otherwise orders.

The Court acts with as little formality as possible and is not bound by rules or practice as to evidence.

Anything said or done by the parties in trying to settle the dispute in private sessions with the Magistrate cannot be used later in any hearing, should the matter not be resolved.

Only if the matter is not resolved privately by negotiation or mediation will the Court proceed to formally hear and determine the dispute.

WITNESSES

If the matter does proceed to hearing, as with any court case, witnesses can be called to support or dispute claims made by either of the parties. Form 13 is used to call witnesses to appear or to bring documents (see s.19 of the Act).

ORDERS THAT MAY BE MADE BY THE COURT

The orders permissible under the Act (s.15) include:

• To terminate the tenancy agreement;
• To stop further breaches of the agreement or ensure obligations are acted upon;
• To force payment of any amount payable, or award compensation for loss or injury caused by a breach (other than personal loss); and
• Anything else the Magistrate considers appropriate (such as return of the application fee, waiver or extension of notice periods).

MAKING A CLAIM

A claim in relation to a tenancy dispute should be lodged at the Magistrates Court closest to the rented premises which are the subject of the dispute. Different forms are used for different types of claims and are available from the court:

• Bond Disputes: Applications in relation to bond disputes only are lodged on a Form 6 Application for the Disposal of Bond Money but only if the bond has been lodged according to the Act (see ‘Bond Disputes’ above). If there is a claim for something other than the bond, even if it is related (such as a claim for reimbursement of the application fee), a general application form should be used;
• General Applications: Applications in relation to other disputes are lodged on a Form 12. This includes applications for:
– performance orders (for the owner/agent to remedy a breach of agreement);
– termination orders;
– compensation; or
– bond disputes if the bond was not lodged in accordance with the Act, or where the applicant is seeking something in addition to just the bond return.

Reimbursement of the application fee may be sought as long as it is included as one of the orders sought.

The forms give limited space to provide details. A brief outline of the reasons for the claim may be sufficient, but if the space provided is not sufficient, an appendix may be added. Where an appendix is added, make sure that this is noted on the claim form. Only those orders listed on the claim form can be made by the court, and all orders sought should be specified. If there is more than one order sought, it is advisable to number them.

Always provide the owner’s name even if an agent managed the premises. The address provided can be an agent’s address.

Once completed and lodged, the court forwards a copy of the application to the other party. In the case of a claim for bond, the other party must respond to the court within seven days if they dispute the claim. The applicant should contact the court before the hearing date to obtain a copy of the respondent’s (the other party’s) claim. If the court receives no response from the respondent, it makes an order in favour of the applicant.

In the case of any claim other than for a bond, the other party does not have to respond, but can just appear at court on the date of the hearing if he or she wants to defend the claim.

DEFENDING AN ACTION

The court forwards a copy of the form to the other party within 7 days of receiving a claim. If the claim is in relation to bond (Form 6 Application), it is important to respond within seven days or the court will make an order in favour of the applicant. If the claim is in relation to any other matter, such as eviction, the other party does not have to respond, but can just appear at the court on the hearing date, if they wish to defend the claim. Even where it might appear that there are no grounds of defence, the defendant may be able to appeal for special consideration on grounds of hardship. For example, even if it is clear that a termination will proceed, the court can suspend the order for up to 30 days due to hardship for the tenant.

APPEALING A DECISION AND APPLYING TO VARY OR SET ASIDE AN ORDER

Grounds for appeal from a decision in a minor case are extremely limited and will only exist on the grounds that the case:
• was not within the jurisdiction of the Court; or
• was not a minor case;
• that in dealing with the minor case there was a denial of natural justice; or
• that the judgment was beyond the Court’s jurisdiction. (s.32 Magistrates Court Act).

However, where a Registrar is presiding a party may appeal to a magistrate. (s.32(3) and (4) Magistrates Court Act).

Specialist advice should be sought if an appeal is under consideration.

COSTS

Because legal representation is not generally permitted in minor cases, the costs of a successful party are usually limited to the initial filing and service fees. There is no cost for defending an action, unless the court makes an order against the respondent. For details of current filing costs, including for low-income earners, contact the Registry of the Magistrates Court closest to you.

ENFORCEMENT

If the court has ordered payment of money, and the money is not paid, the person who is owed the money can apply for enforcement of the order in the Magistrates Court. This process is set out in DEBTS).