Legislation cited: Residential Tenancies Act 1997 ss 71, 71E, standard terms 52, 55, 56, 57

1. The respondents are to pay the applicants the sum of $1,725.54 within one calendar month of the date of this decision.
2. ACT Rental Bonds on behalf of the Territory is directed to release the bond to the tenants.

1. The respondents, Mr Michel and Mrs Camille Geromboux (the owners), own a property located in Macquarie, ACT 2614 (the property).
2. The applicants, Ms Megan Arthur and Ms Rachel Male (the tenants), agreed to rent the property from the respondents from 7 March 2020. The lease was a 12 month, fixed term lease.
3. The tenants agreed to pay rent of $500 per week for the three-bedroom, one-bathroom property.
4. The tenants paid a bond of $2,000, which was lodged with ACT Rental Bonds.
5. The owners did not give the tenants an ingoing inspection report relating to the property.
6. On 5 May 2020, the tenants emailed the owners to complain that the range hood was broken and there was a leaking tap. The taps were fixed promptly.
7. On 8 July 2020, a technician examined the rangehood and advised the owners that a part needed to be ordered to fix the unit. I do not know if, or when, it was fixed.
8. The broken range hood meant that any condensation from cooking was not being extracted from the property and remained in the house, adding to the humidity within the house.
9. Likewise, according to a report provided by Peak Consulting, a window in the bathroom was not openable, meaning that any humidity generated after taking a bath or shower that was not expelled by the fan would permeate the rest of the house.
10. On 14 July 2020, the tenants noticed substantial amounts of mould in one of the bedrooms. The mould was in a built-in cupboard, on a wall, on the underside of the wooden slats of the bedframe, on the mattress, on the back of a chest of draws and on clothes.
11. This discovery caused the tenants significant concern and they started to look for other areas of mould growth. They found mould growth on the walls, ceilings, windows and on some other items of furniture owned by the tenants.
12. The tenants went next door and spoke to the owners, who live in the adjacent property, about the mould they had discovered. Mr Geromboux then went next door and inspected the property.
13. The owners were concerned about the mould and resolved to look into the issue.
14. The tenants removed all of their property from the mould affected bedroom and ceased using it.
15. On 16 July 2020, a representative from Electrodry inspected the property. As a consequence of the inspection, the owners provided the tenants with a dehumidifier for use in the property.
16. The owners elected not to use the services of Electrodry and instead arranged for the property to be inspected by a building inspector employed by Peak Consulting.
17. An inspector from Peak Consulting visited the property on 24 July 2020. The purpose of the inspection was to "conduct an inspection of the mould issue within the dwelling" and to "conduct non-invasive inspection, testing environmental conditions within the home in order to identify the source of condensation and mould, and provide a report of our findings and recommendations".[1]
18. The property was re-inspected by Peak Consulting on 7 August 2020.
19. Peak Consulting provided their report to the owners on 17 August 2020. The primary finding made by Peak Consulting, was that the mould was "due to uncontrolled condensation within the dwelling".[2]
20. The report cost the owner $880.
21. The owners and tenants blame one another for the high levels of condensation found in the property.
22. On 17 August 2020, the tenants issued the owners with a notice to remedy, which, amongst other things, called upon the owners to have the property professionally cleaned so as to remove the large areas of mould.
23. By email of 18 August 2020, the owners declined to have the property cleaned. The owners' position is that the tenants caused the mould, and they should pay for it to be removed.
24. By mutual agreement the tenancy was terminated early, and the tenants moved out of the property on 17 September 2020.
25. The owners did not draft an outgoing condition report following the departure of the tenants.
26. The owners had to have the house cleaned and painted before they could re-lease it. The property was re-leased on 19 October 2020.
27. The owners spent $4,466 on the cleaning and repainting of the property.
28. The tenants brought an action against the owners for damage done to their property by the mould. They originally sought $2,405 for damage to their property. This figure was later revised to $2,545.99. They also seek compensation in the form of a rent reduction of 30 per cent from 14 July 2020 to the date the tenancy terminated. This equates to $1,200. The total sought by the tenants is $3,749.99.
29. The owners deny owing the tenants anything and have brought a counter claim seeking $5,346. This figure is the sum of the cost of the Peak Consulting report ($880) and the costs incurred in cleaning and painting the property ($4,466).

1. The applicants' claim is based on section 71E of the Residential Tenancies Act 1997 (the Act), which provides:

(1) In considering a matter, or making a decision, under this Act in relation to an occupancy agreement for premises, a person must have regard to the following principles (the occupancy principles):

_(a) an occupant is entitled to live in premises that are - _

1. Section 71E of the Act applies to occupancy agreements and it sets out the principles that apply to those arrangements. Occupancy agreements most commonly arise in situations where a lodger is living with the owner of a property and is a distinct form of property right to that of a lease holder.
2. Section 71E does not apply to the lease of a residential property under the Act.
3. The applicants claim for the loss of amenity and damage to property caused by the mould arises under sections 71(1)(a)(ii) and 71(b) of the Act, which I set out in full:

(1) On application by a tenant, the ACAT must order a reduction in the rental rate payable under a residential tenancy agreement if it considers that the tenant's use or enjoyment of the premises has diminished significantly as a result of any of the following:

_(a) the loss or diminished utility of an appliance, furniture, a facility or a service supplied by the lessor with the premises as a result of - _

(i) the withdrawal of the appliance, furniture, facility or service by the lessor; or

(ii) the failure by the lessor to maintain the premises and any appliance, furniture or facility supplied with the premises in a reasonable state of repair, having regard to their condition at the commencement of the residential tenancy agreement; or

(iii) the failure by the lessor to provide and maintain the locks or other security devices necessary to ensure that the premises are reasonably secure;

(b) the loss of the use of all or part of the premises;

(c) interference with the tenant's quiet enjoyment of the premises or the tenant's ability to use the premises in reasonable peace, comfort and privacy by the lessor or anyone claiming through the lessor or having an interest in, or title to, the premises.

(2) To remove any doubt and for subsection (1), a tenant's quiet enjoyment of premises is interfered with if there is substantial interference with, or a significant lessening of freedom in exercising, the tenant's rights.

_(3) A reduction in the rental rate ordered under subsection (1) - _

(a) takes effect from the day the tenant's use or enjoyment of the premises diminished, or the later date that the ACAT specifies; and

(b) remains in force for the period, not longer than 12 months, specified by the ACAT.

(4) The ACAT may order a lessor to pay to the tenant the difference between the rent paid and the rent payable as a result of an order for a rental rate reduction.

(5) Any purported increase in the rental rate in relation to premises for which a reduction order is in force is void and any amount paid above and beyond the reduced rental rate in accordance with a purported increase is a debt owing by the lessor to the tenant.

1. In summary the effect of section 71 of the Act and clauses 56 and 57 of the standard residential terms (set out below) is:

(a) The tenants have the right to the quiet enjoyment of the property. This includes the right to reasonable comfort within the property.

(b) The owners have an obligation to maintain the property to a reasonable state of repair, having regard to the condition of the property when it was initially leased to the tenants.

(c) The owners have an obligation to undertake any necessary non-urgent repairs, (including the growth of mould) within four weeks (clause 57 of the standard residential terms).

(d) The owners have an obligation to remove the mould from the property, if it was not caused by the negligence or wilful act of the tenant (clause 56 of the standard residential terms).

(e) The applicants can claim for the loss of amenity if the respondents breached (a) - (d) above and they can prove "the tenant's use or enjoyment of the premises has diminished significantly"

1. To succeed with their claim the tenants must prove on the balance of the probabilities:

(a) The condition of the property was permissible when they entered into the lease agreement on 7 March 2020

In this regard I am satisfied there was no visible mould at the time the tenants moved into the property. I am satisfied of this because Mr Geromboux gave evidence to the effect that none of his other tenants had complained of mould, and it seems clear from the evidence of the tenants that they did not notice it until winter; on 14 July 2020.

(b) The owners breached their obligation to carry out repairs within four weeks

The cleaning and other repairs were not carried out until after the tenants moved out on 17 September 2020, more than four weeks after the issue was brought to the attention of the owners by the tenants on 14 July 2020.

(c) That the mould affected the tenants' quiet enjoyment of the property and "the tenant's use or enjoyment of the premises has diminished significantly".

It seems clear to me that the presence and extent of the mould affected the comfort of the tenants. They felt unable to use the bedroom which had the large manifestation of mould and also saw their property, including their clothing, becoming affected by mould.

I am satisfied that the existence and spread of the mould significantly diminished the applicants quiet enjoyment of the property.

(d) The damage, that is the creation and spread of the mould, was not caused by the negligence or wilful act of the tenants.

Clause 56 of standard residential conditions means that an owner will not be liable to repair, or compensate, a tenant for damage that is caused by the tenant's negligence or wilful act. Standard residential term 56 states:

1. The lessor is not obliged to repair damage caused by the negligence or wilful act of the tenant.
2. The owners believe that the mould occurred because the tenants were not adequately heating the property during the winter months and that this led to significant amounts of condensation and humidity within the property, which in turn led to the proliferation of mould.
3. The owners' beliefs are concisely set out in the email they sent to the tenants on 25 July 2020, which in part stated:

My responsibility as a landlord was to give you a house perfectly clean with all the facilities necessary to make it comfortable. There is a ducted gas heater programmable for the desired temperature at various times of day and night, with a choice for fan speed so it's not noisy when required. There is also a brand new reverse cycle air conditioner and windows have security screens so they can be left open even when you are at work. Your responsibility is to use them to maintain the house in its original condition.

for the past few weeks we have seen the condensation on windows reaching an alarming point. Never since the many years we have been here it happened in such a way. It was normal in winter to get fog on windows but it was disappearing quickly as the house got warmer.

The cold Canberra winter started early this year, mid April, and we are near the end of July. For more than 3 months the morning condensation was not cleared as you were not starting the ducted heating. Day after day if accumulated and when the windows could not get any more it started depositing on cold walls...

When sleeping in a bedroom approximately 10 square metres with a closed door, it is normal practice in the morning to get fresh air in it. As you were not using the heater and the temperature was cold, I understand that you didn't want to leave the windows open. [errors in original]

1. In essence, the owners say that the mould issue had not arisen before the tenants moved in and that they had provided the heating systems that, had they been used, would have ensured that the mould would not have grown in the property.
2. In effect, the owners' case is that the tenants were negligent in failing to open windows to allow fresh air into the property and also by failing to use the heaters provided which would have led to the dehumidification of the property and an environment in which the mould could not grow.
3. The tenants sent the owners a reply on 27 July 2020, in which they said:

We are hesitant to believe it relates to the heating of the house as only one of the bedrooms is affected, along with the opposite end of the house (being the kitchen/dining area and bathroom) by mould and mildew. The other two bedrooms are not as affected (just mould on windowsills). If it was the lack of heat in the house, all bedrooms and living areas would be affected as much as the end bedroom, where the severity of the mould is worse. We have been using the dehumidifier each day as per your request and have emptied approximately 4 litres of liquid from the machine each day. We do use the heating when we are in the house.

1. The tenants' evidence, given during the course of the hearing, was to the effect that whilst they didn't use the gas heating system, they did in fact use the reverse cycle air conditioner, as well as panel heaters to heat the house when they were cold.
2. The Peak Consulting report offers the only evidence based rationale for the development of mould in the property.
3. At paragraph 6.3 and 6.4 of the report, the author made some relevant observations about the property:

The surface temperature of the aluminium window frames, glazing and external walls is significantly lower than the relative internal temperature.

Low insulation value window treatments are present to the exterior windows/doors. Roller blinds to bedrooms and the kitchen and vertical blinds to the living room are in place.

1. In paragraph 6.7 the author concluded that the mould was caused by uncontrolled condensation.
2. In paragraph 6.8 the author gave his view as to how this uncontrolled condensation occurred:

The condensation is principally a result of the combination of reasonably high levels of humidity and cycles in air temperature, combined with the dew point cold surface produced at the aluminium windows/doors single glazed units, uninsulated external walls and/or services. These provide for a conducive environment for condensation to form.

1. It should be noted that all of the deficiencies noted in paragraph 6.8 are failures of the building structure. They have nothing to do with the tenants.
2. In paragraph 6.10 the author articulated the other factors he considered relevant to the creation of high humidity levels in the property. He said:

Other factors increasing the humidity within the dwelling include significant moisture presence within the subfloor area, internal drying of clothes and other items, bathroom use, dryer use in the laundry and the non-cyclic use of the reverse cycle HVAC system contributing to the significant condensation issues being experienced.

1. In terms of the issues in the subfloor area, the report writer noted at paragraph 6.12:

Front and rear timber structures are inhibiting cross flow ventilation to the subfloor area resulting in damp conditions being experienced within. Consideration should be given to increasing the number and positioning of sub- floor vents to the exterior of the property to increase cross ventilation.

1. Again, it should be noted that the "significant moisture presence within the subfloor area" was not the responsibility of the tenants. The owners have the obligation to ensure that those conditions cannot thrive and affect the living space above.
2. It should also be noted that most of the other factors listed by the author (drying clothes and other items, use of the clothes dryer and bathroom use) as being causative of high humidity levels were well within what would be considered normal use of a property by tenants.
3. The author does state that the non-cyclic use of the reverse cycle HVAC system was a contributor to the high humidity levels.
4. I accept that the tenants' evidence that they did use both the reverse cycle system and panel heaters to heat the property. It is hard to be critical of the tenants' decision to use the heaters to the extent necessary to keep themselves warm.
5. Reviewing all of the evidence, it appears that condensation and humidity occurred because of:

(a) the nature of the house (single glazing causing dew point cold surface and absence of insulation);

(e) bathroom (shower) use in a bathroom where the window is not openable;

(f) the absence of a working extractor fan above the oven; and

(g) noncyclic use of the HVAC reverse cycle air conditioner.

1. On the evidence before me, I do not believe there is any one cause for the humidity levels within the property.
2. Two of the significant causes of the humidity (the structure of the house and the significant moisture presence within the subfloor area) are nothing to do with the tenants and are not their responsibility.
3. Equally, the absence of an opening bathroom window and functioning kitchen extractor fan are outside the control of the tenants and would have contributed to the humidity in the house.
4. Otherwise, the factors highlighted in the Peak Consulting report that contributed to the high humidity levels (drying clothes and other items, use of the clothes dryer, bathroom use, and intermittent use of the reverse cycle heater and panel heaters) are perfectly normal uses of the property that a tenant is entitled to use without criticism or comment.
5. It is impossible for me to conclude that the tenants' acts, by themselves, caused the humidity, condensation and mould.
6. It is also impossible for me to say that the tenants acted in a negligent manner and caused the mould.
7. I am satisfied on the balance of the probabilities that the applicants have proved that they did not negligently or wilfully create the circumstances that led to the growth and spread of the mould.
8. It appears to me that the tenants have proved all that they need to prove to succeed with their claim, and for that reason their claim for compensation is successful.

1. The tenants have claimed a total of $2,545.99 in compensation for a number of listed items of furniture and clothes. The tenants valued those items by finding the cost of each item online. Each of the costs they provided are for new products, not used.
2. None of those items specified in the applicants' list were brand new at the time of the damage. In evidence, the tenants gave a range of ages for each item, with some items being six months old and others up to six years old.
3. The tenants are entitled to compensation for the actual value of the goods, not the amount of money it would cost to buy those items again. It is impossible for me to value each of the used items. Consequently, I have tried to calculate a formula that would allow me to arrive at a fair estimate of the value of the used goods.
4. I have decided to award compensation on the basis that each of the items has a current value of 40 per cent of its new price. This means the tenants are entitled to $1,018.40
5. The tenants also seek compensation for the loss of amenity and comfort caused by them having to live in a mouldy environment. They seek a 30 per cent reduction of their rent from 14 July 2020 to 18 September 2020. This, they say, equates to $1,200.
6. Whilst I take into account the inconvenience caused by the mould to the tenants, I also take into account that the owners acted very properly and reasonably in allowing the tenants to break the lease within the currency of the fixed term, on a date of their choosing and without having to pay a break-lease fee.
7. For that reason, I reduce the percentage of the award sought by the tenants to 15 percent. This equates to $707.14 ($500 divided by 7 x 66 days x 15%).
8. In total I award the tenants the sum of $1,725.54, which is to be paid to the tenants within one calendar month of the date of this decision.

1. The owners' counter claim is that they are entitled to damages as the tenants negligently or wilfully caused their property to become infested with mould and that they have been put to considerable expense in cleaning the mould and having the property re-painted.
2. For the reasons given above I do not find that the tenants' negligence or any combination of their actions alone caused the mould. For that reason, the counter claim is dismissed.

[1] Exhibit R1 (Peak Consulting Report) page 2