Beasley v Meriton Property Services Pty Ltd

NCAT Consumer and Commercial|2022-06-28

Introduction

The applicants are the tenants of residential premises owned by the respondent who is the landlord of the premises.
The applicants lodged an application with the Tribunal on 7 April 2022 (the Application). The applicants seek an order under s 44(1)(a) of the Residential Tenancies Act 2010 (NSW) (RTA) that a rent increase is excessive.
The Application was listed for hearing on 28 June 2022.
At the hearing on 28 June 2022, both parties appeared without legal representation. The applicants appeared in person and the respondent was represented by one its managers, Ms Rossetto.
The hearing on 28 June 2022 proceeded by telephone. At the hearing the parties were given an opportunity to present their evidence, ask questions of the other party and make submissions. The parties did this in a respectful manner and the Tribunal is grateful for their co-operation in the conduct of the hearing.

Jurisdiction

The dispute between the applicants and respondent arises from their relationship as the tenants and landlord respectively under a residential tenancy agreement governed by the RTA. The Tribunal therefore has jurisdiction to hear and determine the matter pursuant to the powers granted to it under the RTA in respect of residential tenancy agreements.

Evidence

In determining the Application, the Tribunal has had regard to the following: 1. The material filed by the applicants on 31 May 2022. This was said to supersede and replace the material originally filed by the applicants on 5 May 2022. This was marked Exhibit A1 at the hearing on 28 June 2022. 2. The material filed by the respondent on 13 May 2022. This was marked Exhibit R1 at the hearing on 28 June 2022. 3. The further material filed by the respondent on 22 June 2022. This was marked Exhibit R2 at the hearing on 28 June 2022 4. The oral evidence and submissions of the parties at the hearing on 28 June 2022.
The findings made by the Tribunal on the basis of the above evidence is set out below.

Assessment of the Evidence and Findings of Fact

The residential premises are located at Banks Avenue, Eastgardens in New South Wales. They consist of a one bedroom strata unlit located in a multilevel and multi-building complex. The unit consists of one bedroom, it is on the first floor of the building and it is south facing. These characteristics are highly relevant to the resolution of the dispute as will become apparent from the reasons set out below:
The applicants have been in occupation of the premises since March 2020. The rent ledger in evidence indicates that rent was initially paid at the rate of $630 per week from 10 March 2020; at the rate of $570 per week from 8 September 2020; and then at the rate of $530 per week from 6 April 2021.
The rent ledger indicates that the rent has been paid by the applicants as and when due without default, i.e., on a regular weekly basis in advance.
There is email correspondence between the parties which reveals a dispute as to the reason for the rent being reduced during the course of the tenancy. In the email correspondence, an employee of the respondent suggested that the rent was reduced due to the Covid-19 pandemic. It is not clear whether this was being suggested as some form of rent relief or as an adjustment of the rent due to altered market conditions because of the pandemic.
At the hearing, the applicants gave evidence that the rent was reduced based on a "market match". I understood this to mean that the applicants were able to demonstrate to the respondent that lower rent was being paid for comparable premises and the parties agreed to the rent for the subject premises being reduced on this basis. I did not understand Ms Rossetto to dispute this at the hearing. In any event, based on my review of the email correspondence between the parties and evidence given by the applicants at the hearing, I find that as at 6 April 2021, the weekly rent of $530 per week represented fair market rent for the premises.
On 11 March 2022, the respondent notified the applicants that the weekly rent was to increase by $100 per week, i.e., from $530 to $630.
The applicants have been paying weekly rent of $630 per week from 24 May 2022.
The applicants have included in their evidence an advertisement placed on-line by the respondent advertising other units for rent in the complex in which the unit occupied by the applicants is located. It advertises one-bedroom units as being "from $590".
By email sent on 25 March 2022, the applicants drew the respondent's attention to the advertisement referred to above. By email sent on 28 March 2022, Mr Miglis, a building manager of the respondent, responded to the applicants in the following terms: Just some clarification on the below regarding the $590p/w is what 1 bed start from for e.g. ground floor facing south would be at $590p/w unit. Given the level, floorplan and location on where the unit faces impacts the price as prices around the buildings change given the circumstances of the unit. Hope this helps to clarify. [sic]
The applicants contend that their unit meets virtually all of the characteristics of a unit identified by Mr Miglis as being available for rent at $590 per week, i.e., it is one-bedroom, it is on level one of the building and it is south facing. The only difference is that the applicants' unit is on level one as opposed to ground floor.
The respondent placed in evidence the rent being paid for 2 other units in the strata complex in which the unit occupied by the applicants is located. The respondent described these as "comparable properties". The rent being paid for one unit was $650 per week and the rent being paid for the other unit was $630 per week. It only emerged during the hearing that these units were located on levels 9 and 10. I therefore reject the respondent's contention that these units are comparable to the unit occupied by the applicants. As pointed out by the respondent's building manager in the email of 28 March 2022, the level of the unit "impacts the price". Based on this evidence, I cannot regard the rent for a level 9 or 10 unit as being comparable to the rent for a level one unit.
For reasons which were not explained, the respondent did not provide evidence of the rent being paid by other units located on the ground floor or first floor of the strata complex in which the applicants' unit is located.
The applicants have placed in evidence information derived on-line from the NSW Department of Communities and Justice and from the Tenants' Union of NSW; the former indicates rent for one bedroom units in the relevant locality as being in the range of $490 to $570 per week; the latter indicates rent for one bedroom units in the relevant locality as being in the range of $503 to $600 per week. This evidence needs to be treated with some caution as it is of a generalised nature. It is, however, of some value as it provides an indication of the range of rent payable for one bedroom units in the relevant locality.

Applicable Law

Section 44 of the RTA provides relevantly: 44 Tenant's remedies for excessive rent (1) Excessive rent orders The Tribunal may, on the application of a tenant, make any of the following orders - (a) an order that a rent increase under an existing or proposed residential tenancy agreement is excessive and that, from a specified day, the rent for residential premises must not exceed a specified amount, (b) an order that rent payable under an existing or proposed residential tenancy agreement is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent for residential premises must not exceed a specified amount. (2) Time limit for excessive rent increase applications An application for an order that a rent increase is excessive must be made within the period prescribed by the regulations after notice of the increase is given. (3) Applications on withdrawal of goods or services A tenant may, before the end of a tenancy, make an application that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities provided with the residential premises, even if those goods, services or facilities were provided under a separate or a previous contract, agreement or arrangement. (4) Determination of excessive rent For the purposes of making an order under this section, the Tribunal may declare that amounts payable under a contract, agreement or arrangement under which goods, services or facilities are provided to the tenant are rent. (5) The Tribunal may have regard to the following in determining whether a rent increase or rent is excessive - (a) the general market level of rents for comparable premises in the locality or a similar locality, (b) the landlord's outgoings under the residential tenancy agreement or proposed agreement, (c) any fittings, appliances or other goods, services or facilities provided with the residential premises, (d) the state of repair of the residential premises, (e) the accommodation and amenities provided in the residential premises, (f) any work done to the residential premises by or on behalf of the tenant, (g) when the last increase occurred, (h) any other matter it considers relevant (other than the income of the tenant or the tenant's ability to afford the rent increase or rent). (6) Effect of excessive rent order An order by the Tribunal specifying a maximum amount of rent - (a) has effect for the period (of not more than 12 months) specified by the Tribunal, and (b) binds only the landlord and tenant under the residential tenancy agreement or proposed residential tenancy agreement under which the rent is payable.

Consideration

The applicants seek an order that the proposed rent increase from $530 to $630 per week is excessive.
Section 44(5) specifies a non-exhaustive list of factors which the Tribunal may have regard to in determining whether a rent increase is excessive.
In Baltov v Casaceli [2021] NSWCATCD 91 at [15], the Tribunal said: The discretionary matters which the Tribunal is 'to have regard to' are set out in RTA s 44(5). Not all these factors are required to be considered and the weight to be attached to each is a matter for the Tribunal in the circumstances of each case; there is a wide discretion to be exercised judicially but without a requirement to adopt any particular method of determining the fair rent. The RTA does no more than provide a list of matters for consideration, and leaves it to the Tribunal to determine whether any or any particular weight should be given.
I shall adopt the approach set out by the Tribunal in Baltov v Casaceli.
It appears to me that the evidence and submissions of the parties were solely focused on the matter identified in s 44(5)(a), ie, the general market level of rents for comparable premises in the locality or a similar locality. In the absence of evidence and submissions on the other matters identified in s 44(5), it is difficult to see how they can have any bearing on the determination of the Application.
In my opinion, the evidence which warrants the greatest weight in relation to the market rent for comparable premises is the advertisement by the respondent offering units for rent in the relevant strata complex "from $590" per week and Mr Miglis' email setting out the characteristics of such units. As I have explained above, the characteristics of the applicants' unit align almost identically with the characteristics described by Mr Miglis for units available for rent at $590 per week. I have no reason not to accept that the respondent accurately advertised that it was offering units for rent "from $590" and that, based on Mr Miglis' email, the units which were available at $590 per week were one bedroom, south facing and on the lower levels of the building.
Based on the above evidence, I consider the rent increase from $530 to $630 per week to be excessive.
Even if the Tribunal finds that the rent proposed by the landlord is excessive, it may nonetheless order a rent increase in a lower amount if it considers that is justified by the evidence. So much is clear from the power given to the Tribunal under s 44(1)(a) to order that rent "must not exceed a specified amount".
It does appear that the present circumstances justify a rent increase. The advertisement placed by the respondent does indicate that $530 per week no longer accords with the market level of rent.
However, having regard to the whole of the evidence, I am not satisfied that the rent increase proposed by the respondent is justified. Doing the best I can on the available evidence, I consider that a rent increase of $40 per week is appropriate taking the rent to $570 per week from 24 May 2022 which is the date on which the rent increase took effect. In determining this as the appropriate rent increase, I have had regard to the fact that the advertised rent for premises is not necessarily the rent that will be agreed to be paid between the parties, the respondent could have provided evidence of rent being paid by comparable units on lower levels of the strata complex but failed to do so, the likelihood that a landlord will accept slightly less than market rent for stable and reliable tenants and the general market information referred to in paragraph above.

Orders

For the above reasons there will be orders that the rent increase to $630 is excessive and that the rent shall not exceed $570 per week from 24 May 2022 to 24 May 2023. As the applicants have been paying rent since 24 May 2022 in an amount which the Tribunal has determined to be excessive under the RTA, it is also appropriate to make an order under s 47(5) of the RTA that the respondent is to repay the applicants any rent paid in excess of the amount determined by the Tribunal to be appropriate.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 29 September 2023 - Formatting amendments. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 September 2023

At a glance

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Judgment (9 paragraphs)

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