Jupp v Chambers

Ms Jupp (the tenant) applied to VCAT seeking refund of a $330.00 'change of tenant fee', she had been charged and paid, under protest. On 22 December 2009, I heard the application. The Tenants Union of Victoria represented the tenant. Ms S. McLaughlin of Walsh & Whitlock Real Estate Agents represented the landlord.
Ms Jupp and another person were tenants of the landlord. In September 2009, Ms Jupp advised the landlord's agent that she intended to vacate the rented premises and proposed another person (Jason), a friend of the other tenant, take her place as tenant.
This proposal was accepted. Ms Jupp's tenancy ended and Jason became the 'replacement tenant'.
However, the agency advised Ms Jupp she would be charged a $330 fee for the change of tenant. Ms Jupp said the agency told her the fee related to creating a new condition report when Jason moved in. Ms Jupp objected, but paid under protest. Ms Jupp said the new condition report was never created. She applied to VCAT seeking refund of the $330. She said (the agency agreed) that a new condition report was not done.
Ms McLaughlin said that since early 2009, the agency had been charging this fee (a week's rent) in all tenancies it manages. The fee related to the work relating to the tenant changeover, which took between one and two hours. It did not relate to creating a new condition report. The fee was charged to the landlord under the Exclusive Leasing and/or Managing Authority between the landlord and the agent. The agency provided me with a copy of the agreement. It contained a handwritten note, "Assignment Fee One Week's Rent".
The agency was unable to provide me with documentary proof that the landlord had been charged the fee.
I made orders giving:
1. the agency an opportunity to provide that evidence, by close of business 24 December 2009; and
2. the Tenants Union of Victoria the opportunity to make a written submission by 8 January 2010. I commented that because the issues had been discussed at the hearing, it seemed unlikely written submissions would be required.
On 8 January:
1. the agency faxed an invoice from the agency to the landlord dated 5 October 2009 invoicing the landlord for "Transfer Fee & GST" of $335.50. A cover note said the lateness was due to my order of 23 December not being available. While I accept the explanation, it seems odd as I created the order on the morning of 22 December; and
2. The Tenants Union made a written submission.
On 11 January 2009, the Tenants Union faxed a letter to VCAT saying it had received a copy of the invoice, noting it was late and that I may judge it appropriate to allow the Tenants Union to file further submissions.
Later the same day I considered the issues, decided they had been well canvassed at hearing and in writing and made final orders with written reasons to follow.

Section 84 permits a landlord to require a tenant to bear any fees, costs or charges incurred by the landlord in connection with the preparation of a written assignment of a tenancy agreement.
Therefore, I first have to be satisfied that the landlord incurred fees, costs or charges.
Given the invoice and the evidence of Ms McLaughlin, I find the landlord incurred a fee of $335.50 which was described on the invoice as being in connection with the preparation of a written assignment of a tenancy agreement
Second, I have to be satisfied that those fees, costs or charges were in fact incurred in connection with the preparation of a written assignment of a tenancy agreement.
In my view, the language of section 84(3) indicates Parliament intended the fees have a reasonable connection to the expense of preparing a written assignment of a tenancy agreement. Section 84 starts with a prohibition on charging fees and then in section 84(3) allows an exception where the fees are "in connection with the preparation of a written assignment of a tenancy agreement". That connection is intended to be between the fee and the reasonable costs of arranging the sub-lease.
Fees may well relate to the work associated with discussing the issue with the outgoing tenant and landlord, reference checking a proposed tenant and preparing required documentation.
Ms McLaughlin estimated the related work might amount to one or two hours. It seems to me unlikely that one or two hours work by the agency could give rise to a $335.50 fee with a reasonable connection to preparation of a written assignment of a tenancy agreement.
Another member of VCAT recently considered a similar case (Miller v Psomas R2009/31146 (unreported)), which involved the same real estate agency. She allowed $88.00. Ms McLaughlin said that if I found a refund was required, she would not object to a similar order. She had previously offered the tenant a refund of all but $88.00. That offer remained open. Ms McLaughlin did not wish to provide further evidence about the work associated with the assignment.
For the purpose of this proceeding only, I find the charges incurred by the landlord in connection with the preparation of the written assignment under discussion to be $88.00. That the landlord was charged another $247.50 under his agreement with the agency is a matter between them.
What the charge incurred in other situations may be would be a matter for evidence in those situations. It may be that a 'standard fee' could be justified. However, while I do not make a finding on the issue, in my view, a week's rent seems high.
Therefore, I ordered the landlord is to refund to the tenant $247.50 (transfer fee and GST of $335.50, as shown on tax invoice dated 5 October 2009, less $247.50 leaving a difference of $88.00).
In reaching this decision I considered the Tenants Union's submissions (on behalf of Ms Jupp. They were:
1. The landlord had not proved he had incurred charges in connection with the preparation of a written assignment of a tenancy agreement.

At a glance

Court

Decision date

Source

Judgment (15 paragraphs)

Jupp v Chambers (Residential Tenancies) [2010] VCAT 36 (15 January 2010)

Parties