Campbell v Fazzolari

Background

On 30 September 2021, Mr Adam Campbell (the tenant) and Ms Tara Vance entered into a residential tenancy agreement (the agreement) with Ray and Marcus Fazzolari (the landlords) for residential premises in Drummoyne, NSW. The agreement is for a 12 month fixed term starting 30 September 2021 and the rent is $2,700 a fortnight.
On 17 November 2021, the tenant applied to the Tribunal for orders:

for compensation of $15,000;
reducing the rent for a residential premises because of reduced access to part of the premises; and
that the landlords carry out repairs.

The respondents to the application were the landlords and the Owners Corporation for the premises, Owners Strata Plan - 55035.
The Tribunal heard the application on 3 March 2022. The tenant attended in person and was represented with leave of the Tribunal by Mr McManus, Solicitor. The landlords were represented by managing agents, Mr Mirabella and Ms Christofi and Mr Thomson of Counsel represented the Owners Corporation with leave of the Tribunal.
At hearing, the tenant withdrew the claim for compensation and all parties consented to the Tribunal removing the Owners Corporation as a respondent to the application.

Withdrawal of facilities

The property is an apartment in a strata complex with a large balcony with water views. There is no dispute that, on 18 October 2021, the tenant was injured when two floating pavers on the balcony of the premises broke while he was standing on them. They are large square ceramic based pavers supported by four pedestals at each corner.
In his application, the tenant contended that either the pavers or the pedestal system are not "fit for purpose". A technical report provided to the Owners Corporation states there "is no evidence of a defective installation" and recommends that the relevant pavers "be sent to an accredited lab for tensile testing". At the time of hearing, no further test results were available to the parties and the Tribunal.
The landlords firstly placed a metal sheet over the two tiles and asserted the balcony was safe. However, given two tiles had broken without significant weight being placed on them, the tenant refused to use the balcony. The landlords' evidence is that stoppers were placed on the balcony doors on 22 December 2021 and, at hearing, the landlords' agents agreed that the balcony could not be used safely until the cause of the problem was determined and rectified. Both parties told the Tribunal that the tenant did not have access to the balcony and would not have access until that happened. Both parties said the responsibility for repair was with the Owners Corporation and they did not know when repairs would be complete.
It was unclear whether access to the balcony was originally withdrawn by the Owners Corporation or the landlord. However, at hearing, the landlords' representative agreed that the landlords would not allow access unless satisfied that it was safe to do so and that is not the case at the moment. In that case, the Tribunal finds that the landlord has withdrawn access to the balcony or the landlord and the owners corporation have jointly withdrawn access. That is sufficient for section 44 to apply.
Both parties agreed that the rent was above average or median rents for the area and the landlord did not dispute the assertion of the tenant that this was because of the large balcony with expansive views. The landlord waived the rent for two weeks after the incident and the tenant and landlord then agreed to a reduction in rent of 30% to $1,890 per fortnight to 4 March 2022 on the basis that the tenant did not have access to the balcony. The landlord did not suggest that the rent should revert to the rent in the residential tenancy agreement from that date but argued that the reduction should not be as much as 30%. In that case, the Tribunal finds on the evidence of both parties that the rent is excessive from 5 March 2022 because of the withdrawal of facilities. The Tribunal must then determine the maximum rent that is to be payable from that date.
The landlords' submission is that the reduction should be no more than 20% because that is closer to the proportion of space taken up by the balcony in the floor plan of the rented apartment. The tenant argued that the rent reduction should continue to be 30% because the balcony space is more important and of greater benefit than the other parts of the premises. He said that it was the only drawcard for the apartment which was otherwise in poor condition.
The landlords' agents made relatively detailed submissions about the proportion of floor space taken up by the balcony, including submissions that the amount of space available to the tenant on the balcony was more limited than it might be because of a row of planter boxes and that the uncovered balcony was of less benefit during the tenancy because of generally poor weather. The tenant gave evidence, disputed by the agents, that the bottom level of the apartment was not liveable and that they used it only for storage.
In the Tribunal's view, a detailed argument about the amount of space available to the tenant in the apartment and on the balcony is not helpful. It is satisfied that any landlord and tenant would place a very significant premium on the balcony space because it has water views and is large enough for entertaining. That the weather has not been conducive to entertaining is not relevant.
The Tribunal has no evidence of the general market rents for premises without water views in Drummoyne or any similar locality. However, a large balcony with water views would increase the rent of the apartment by significantly more that the percentage of the floor space it takes up. It accepts it was a drawcard for the tenant and that would be the case for any reasonable prospective tenant.
The Tribunal has no evidence of the landlords' outgoings under the residential tenancy agreement and, while the tenant claims the premises are not otherwise in good condition, there is no evidence that it is not in a good state of repair. The Tribunal takes the tenant's evidence to mean that it has not recently been renovated.
The Tribunal takes into account that the parties valued the benefit to the tenant of the balcony at 30% of the rent when they made their agreement to reduce the rent. It accepts that the landlord agreed to this amount without knowing that the repairs would take more than a few months. It is not determinative but the Tribunal gives it some weight.
In all the circumstances, the Tribunal is satisfied that a 30% reduction in rent reflects the value of the withdrawal of the facility of the balcony by the landlord or the landlord and owners corporation jointly. It will make a determination that is consistent with the previous agreement to apply from 5 March 2022 that the maximum rent is $1,890 per fortnight which is 70% of the rent of $2,700 payable under the agreement.

At a glance

Court

Decision date

Source

Judgment (7 paragraphs)

Parties

Cited By (1)