The landlord's claim for bond and compensation is dismissed.

The Tribunal finds that the tenant has paid a bond of $1521.00

Direct the Residential Tenancies Bond Authority to pay to the tenant $1521.00.

The Tribunal finds that the tenant's claim for compensation under s.68(1) is proven in the sum of $240.00, net of rent outstanding.

The Tribunal orders that the landlord now pays to the tenant compensation of $240.00.

1. Applications R2012/26892 and R2012/30646 came before me for hearing on 6 March 2014. R2012/26892 is a claim by the landlord for bond and compensation to recover loss and expenses arising from an alleged breach of fixed term tenancy. R2012/30646 is a claim by the tenant for return of bond, compensation for initial cleaning and compensation to recover loss and expenses arising from the allegation that the rented premises were unfit for human habitation and/or that the landlord had failed to maintain the premises in good repair.

1. Shantelle Catanchin (the tenant) entered into a tenancy agreement of premises known as 57 Plumpton Avenue Glenroy (the premises), the landlord being Alfred Eskander (the landlord). The premises were managed by a real estate agent, Stockdale and Leggo (Glenroy) (the agent). The tenant moved into the premises on 10 February 2012 with her two young children. She returned the keys on 22 June 2012. I note that the tenant spells her given name as Shantell. However the bond is lodged in the name Shantelle and, with apology, I will use that spelling.

1. I informed the parties that each of them as an applicant, must establish his or her claim on the balance of probabilities.

1. I further informed the parties that a party to a tenancy agreement could only succeed in a compensation claim if a breach of the tenancy agreement or a breach of duty by the other party was established on the balance of probabilities.

1. Section 68 of the Residential Tenancies Act 1997 (the Act) states:
   • (1) A landlord must ensure that the rented premises are maintained in good repair.

Section 61 requires a tenant "to ensure that care is taken to avoid damaging the rented premises". Section 62 requires a tenant to notify the landlord of damage to the premises "as soon as practicable". Section 63 requires a tenant to keep premises in a reasonably clean condition.

1. In the main, the tenant's claims arise from her assertion that the premises were affected by mould and the air-borne spores. Rented premises can be affected by airborne spores (which for convenience I will generalise and call "mould") from a number of causes. Sometimes the cause is difficult to diagnose and difficult to eradicate. Broadly, premises can be infected by mould either because of the state of the premises or because of the living conditions of the occupiers. Matters relating to the state of the premises include the existence of and integrity of the damp course, the design and state of the repair of the walls and roof, the capacity and state of repair of the gutters and downpipes, the design and state of repair of ventilation and the state of repair of water pipes. Matters relating to the use and occupation of premises include use of extraction devices such as a fan or range hood, opening windows and drying towels and clothes in a vented dryer or outdoors.

1. The tenant stated that she and her two young sons had suffered from respiratory problems since moving into the premises. The symptoms were treated but cause was at first unknown. Her doctor, Dr Ka Earl Tan after some months suggested she obtain a microbiologist's report. An inspection was done on 7 May 2012 by Biological Health Services Pty Ltd (Dr Cameron Jones). Samples were taken. A written report was provided (after payment of the invoice $979.00) on 22 May 2012. On 28 May 2012, the tenant provided a copy of the reports from both Dr Cameron Jones and Dr Ka Earl Tan to the agent (then Paula Sulot). An offer was made to the tenant on 8 June 2012 that she could move out of the premises without lease break penalty provided that was a full and final settlement of the matter. This offer was conveyed by email from the new property manager Ervin Omerspahic to the tenant. She refused this offer as she believed she was entitled to claim compensation. The tenant stated that she was dissatisfied with her treatment by the agent. She had removed her children from the premises from 31 May 2012 to avoid exposure to the mould and was seeking alternative accommodation. The tenant commissioned a building report on 8 June 2012 from Schlueter Consulting Pty Ltd, which was received after payment of their invoice of $800.00 on 22 June 2012. The tenant gave Notice of Intention to Vacate to the agent on 13 June 2012 pursuant to s.238. The tenant stated that she believed the premises to be unfit for human habitation because the premises had caused her children's ill health. The tenant claimed compensation totalling $9,783.50.
2. The documents provided by the tenant included:

Report dated 22 May 2012 of Dr Cameron Jones of Biological Health Services Pty Ltd

Notice to landlord under s.238(1) dated 13 June 2012

Email correspondence between tenant and agent of various dates

Invoices of expenses associated with alternative accommodation, relocation and moving.

1. It was Dr Cameron Jones' report that led the tenant and her doctor to believe that continued occupation of the premises put the health of the children at risk. Dr Jones' investigations included sampling of air and surface mould, testing for surface moisture and humidity, taking swabs, use of infra-red thermography to detect indoor dampness and cultivation of microbiological samples. The conclusions are as follows:

There is no evidence of a widespread localised indoor mould problem based on the microbiological data when compared with the outdoor 'control' air sample. However that being said, the microbiological results for the Master Bedroom show that this room is a potent reservoir of mould and spores. The levels of indoor mould for this room are rated at High to Extremely High. Because the Master Bedroom is likely to be used daily by all the current occupants, including the children, the overall risk of exposure to mould is rated at High.

The indoor environment particularly in the main Living Room is considered 'damp' and adverse health effects are commonly reported for persons living in damp-affected indoor environments. There was no evidence of a moisture problem at floor level. The infra red scans show definite moisture problems at the roofline. If the reasons for the moisture ingress are not dealt with, it is likely that mould will develop elsewhere indoors, not withstanding the fact that measured levels in this sampling were low to normal for the rest of the rooms in the house. Concerns for the future include the fact that slow water ingress combined with heating will lead to elevated humidity making the home conducive to increased fungal growth. It is likely that water leaking from the roof is the causative reason for the indoor dampness.

The measured levels of indoor dampness and the spore/fungal load in the Master Bedroom pose a significant risk to the health and safety of the occupants.

1. Mark Schlueter prepared a Building Inspection Report (inspected 7 June 2012, report provided 22 June 2012). This report concludes:

From inspection the building condition would be typical for a dwelling of this age and type of construction however a number of existing building conditions have been identified as possible defects as a direct result of general poor building practices, weathering and lack of routine ongoing maintenance.

The lack of sub-floor ventilation and adequate maintenance of external timber weather boards and roof gutter elements appears to directly result in water and moisture penetration which would directly have a detrimental effect to structural timber and greatly contribute to loss of occupant's amenity via deterioration of air quality (musty smells) and mould growth.

1. The agent arranged a meeting with the landlord the day after receiving the tenant's report (ie 29 May 2012). From the landlord's perspective, he had lived at the premises for two years and the previous tenants had lived there for about 14 months. There had been no previous problems with mould. The landlord therefore was sceptical about the tenant's claims. The agent had not encountered such an issue before and sought advice. The landlord agreed to send a tradesperson to the premises to investigate. By email dated 31 May 2012, however, the tenant advised she had moved out. An offer was put to the tenant to vacate without penalty, which was rejected. Ervin Omerspahic declared by Statutory Declaration dated 22 November 2013 that he had inspected the premises on 13 June 2012 and did not see visible signs of mould in bedroom 1 or the bathroom nor detect any musty odour.
2. The documents provided by the landlord included:

Report dated 21 June 2012 from Antoinette Mikhail, licensed builder

Report dated 21 June 2012 from Victor Nasu, domestic builder

Report dated 13 August 2012 from Onoya Ndjeka, Building Solution Services (Aus) Pty Ltd

Photos of premises taken by Ervin Omerspahic on 29 June 2012

Report dated 12 September 2012 from Bell Laboratories

Statutory Declaration dated 14 August 2012 of Paula Sulot, employee of the agent

Statutory Declaration dated 22 November 2013 of Ervin Omerspahic, employee of the agent

Email correspondence between parties of various dates

1. In contrast to the reports commissioned by the tenant, those commissioned by the landlord detected no mouldy or musty smell in the premises. The Report of Antoinette Mikhail concludes:

On completion of the building inspection at 57 Plumpton Avenue, Glenroy 3047, there has been no signs of damage to the house which may lead to accumulation of moisture and formation of mould or any hazardous chemicals.

From external inspection, the roof, fascias, gutters, drainage pipes and walls all appear to be in a satisfactory condition. Windows and doors comply with the ABCB. Internally, there are no damage to walls and ceiling. There is no smell of dampness and all ventilation, heating and cooling systems are in a satisfactory condition.

In order to maintain this level of adequacy within the house to minimise and avoid any health hazards, the occupant must make use of exhaust fans, heating/cooling systems and rangehood to ensure normal airflow and minimise condensation, which normally occurs in conditions of hot air to cooler temperatures, favouring the formation of visible vapour seen by the naked eye as water droplets (as has been the condition in the bathroom containing functional exhaust fan).

Household members must utilise ventilation systems at all times and open windows as required to allow the house to naturally dry itself, while allowing sufficient air recirculation.

Overall, as an experienced and licenced builder, I believe that this building deems a healthy environment for anyone to dwell in as it fully complies with the Australian Standards of Building with no sign of health hazard.

1. The landlord did not return the premises to the rental market until reassured by his building and microbiology reports that the premises were sound and did not present a health hazard.

General Observations - Notice Alleging Unfit for Habitation

1. The Act allows either a landlord (s.245) or tenant (s.238) to serve a termination notice on the other which asserts that rented premises are unfit for human habitation. Examples include significant damage to premises due to fire, flood or storm. It is not necessary for the party giving the vacate notice to establish that the other party by action or inaction "caused" the damage to the premises. However, if a landlord or tenant applies to the Tribunal for compensation, then the starting point is to establish that the respondent breached a duty.
2. An example may help explain. Suppose rented premises were wholly or substantially destroyed by fire. Either party could serve a termination notice. If the cause of the fire was an electrical fault of which the landlord knew, the tenant could then bring a claim for compensation. If the cause of the fire was due to a candle left burning by the tenant, the landlord could claim compensation from the tenant. If the fire spread from a neighbouring property then neither landlord nor tenant could claim against the other even though each incurred loss and expense.

Tenant's Compensation Claim - Has a Breach of Duty been proven?

1. Did the landlord know, or ought he to have known that the premises were subject to mould? The relevant facts, as I find on the evidence, are as follows:
   • The tenant had not reported mould or water penetration from her own observations.
   • The tenant obtained the report from Biological Health Services Pty Ltd at the suggestion of her family's doctor.
   • The parties' reports are contradictory.
   • The landlord had previously lived at the premises without a mould problem.
   • The previous tenants had not raised any issue about mould.
   • The new tenants still occupy the premises and have not raised any issues of mould, no work having been done to the premises.
2. I am not satisfied that, until the tenant reported the issue of mould and supplied her report to the agent on 28 May 2012, the landlord either knew or ought to have known that mould was present at the premises.

Did the Landlord Fail to Attend to the Mould within a Reasonable Time?

1. If a landlord fails within a reasonable time to investigate and take appropriate action following notification from a tenant of a repair issue, that landlord will be in breach of his or her duty under s.68 of the Act.
2. Urgent repairs are defined in s.3 of the Act and include such matters as a burst water service, a broken lavatory, a dangerous electrical fault and serious storm or fire damage. A tenant may undertake an urgent repair and recover the cost if the landlord is not contactable or fails to act (s.72). The Act also provides a remedy for failure to carry out non-urgent repairs (s.74) but that process is longer. In the circumstances of the claim before me and on the evidence, I am not satisfied that the works required by the tenant on 28 May 2012 were urgent repairs.
3. The landlord (via the agent) became aware, as I have found, that the tenant had complained that the premises were subject to mould on 28 May 2012. A meeting between the agent and the landlord took place the next day.
4. I am satisfied that it was reasonable for the landlord to initially investigate the tenant's issues. Indeed, investigation of possible water/moisture entry was recommended in the report of Dr Cameron Jones.
5. The tenant's evidence was that the agent did not believe her and failed to act professionally towards her. From the tenant's perspective, she was worried about the health of her children and removed them from the premises. Her claim includes accommodation at the Airport Tourist Village from 31 May to 11 June 2012. Although the keys were not returned until 22 June 2012, the tenant spent the time from 31 May 2012 removing her belongings and cleaning the premises. At the suggestion of the microbiologist, the tenant obtained the building report from Mark Schlueter, provided to her on 22 June 2012. The landlord was prepared to let her out of the tenancy agreement as a settlement of all matters. Ervin Omerspahic attended the premises on 13 June 2012. In his Declaration he states that he did not observe mould and did not detect a musty odour. The landlord followed up with two building reports both dated 21 June 2012 from A Mikhail and O Ndjeka. In the meantime, on 13 June 2012, the tenant had served a Notice of Intention to Vacate. In all of the circumstances and on the evidence, I do not find that the landlord delayed addressing the issue of mould as raised by the tenant for a period of time that was unreasonable.
6. I find that the landlord did not fail, as at 28 May 2012, to maintain the premises in good repair. I find that the landlord did not fail to take reasonable steps within a reasonable time of 28 May 2012 to investigate and address the issue of mould raised by the tenant. Accordingly the claim by the tenant for compensation in relation to the mould is dismissed.

General Observations re Breach of Fixed Term Tenancy Agreement

1. I return to the observations made at paragraph 15 - that either party may serve a termination notice on the other that claims the premises unfit for human habitation. Where a termination notice is served by a landlord, if the tenant does not vacate, the landlord may apply to the Tribunal for an order of possession. This means that the validity of a disputed termination notice served by a landlord is determined by the Tribunal. However, where the termination notice is served by a tenant, there is no equivalent application to the Tribunal. The tenant has vacated. The landlord subsequently claims bond and/or compensation for breach of fixed term. If the tenant's Notice of Intention to Vacate is held to be valid, the claim for breach of fixed term fails. In my opinion, the initial response of a landlord to the tenant's notice is important. To fail to challenge the facts relied upon by the tenant may be legally construed as acquiescence. In my opinion, there is also the issue of whether the test for unfitness for human habitation is subjective or objective: would adverse consequences affect these specific occupiers or all occupiers? Is the test whether a reasonable person with the knowledge of the tenant would have formed the opinion that this tenant formed?

Validity of the Tenant's Notice of Intention to Vacate

1. If the landlord is to succeed in his loss of rent claim, the onus of proof is, in my opinion, on the landlord to establish that the Notice of Intention to Vacate dated 13 June 2012 was not valid. I am satisfied that the tenant sincerely believed that her children's health was compromised by mould affecting the premises. Based on the reports from Dr Cameron Jones and Dr Ka Earl Tan and the building report dated 22 June 2012 of Mark Schlueter, I am satisfied that the tenant's sincere belief was reasonably based on the evidence she had. What is less clear is whether the condition of the premises would adversely affect only the tenant's family or whether another family would suffer from illness due to the (presumably low) concentration of mould. Each person has a different threshold to adverse environmental factors. Indeed some landlords claim extreme allergic reaction to pet hair or the pollutants from cigarette smoke. However the doubt expressed here is my own. It was not put to me by the landlord that the tenant's children were unusually susceptible to mould. As stated, the onus of proof is on the landlord as applicant. I do not find that onus discharged. The landlord has not proved that the tenant's Notice of Intention to Vacate was invalid. The landlord's claim for loss arising from breach of fixed term is dismissed.

Remaining Claim - Cleanliness of Premises at commencement

1. The tenant moved into the premises on 10 February 2012. She reported to the agent that the premises had not been provided in a reasonably clean state. She initially claimed $820.00 for work undertaken by two people for two days to clean the premises. The claim, per her application, was reduced to $400.00. The tenant relied on her own evidence and that of Nicholas Catanchin and from the ingoing Condition Report. The agent considered that a professional cleaner would have charged $250.00 for the work. I was satisfied that the evidence of the tenant and her witness Nicholas Catanchin established that the landlord had not provided the premises on the day of intended occupation in a reasonably clean condition as required by s.65(1) of the Act. The amount claimed is established on the evidence as fair and reasonable compensation for the work undertaken. The order will include compensation to the tenant of $400.00. The tenant however owes rent outstanding to 22 June 2012 of $160.00 which will be deducted from the compensation.
2. The order which results from my decisions on R2012/26892 and R2012/30646 is that the landlord's claim for loss due to breach of fixed term is dismissed, the tenant's claim for loss due to the state of repair of the premises is dismissed and the tenant's claim for compensation for cleaning at the commencement of the tenancy is allowed in the sum of $400.00, less rent owed being a balance of $240.00. There being no amount ordered in favour of the landlord, the bond is to be repaid to the tenant.