Landlords must be aware of the "implied" tenancy agreement: Lessons from tribunal
Section 6A of the Residential Tenancies Act notes that the residential tenancy agreement may be "express or implied" or even "in writing, oral, or partly in writing and partly oral", bringing rise to an interesting situation at the ACT Civil & Administrative Tribunal (ACAT) recently.
The case, between the Commissioner for Social Housing in the ACT and Moffatt was in part regarding whether a new tenancy agreement is implied by the conduct of the parties in this particular case.
In May 2013, the Commissioner for Social Housing filed an application for an order "pursuant to section 42A of the Residential Tenancies Act" noting that a conditional termination and possession order made in May 2012 has not been complied with, and the tenant remained in the property.
The tenant opposed this application, saying that while she noted payments required by the conditional termination and possession order had been missed, a fresh tenancy agreement had arisen "due to the conduct of the parties" and that a further conditional termination and possession order is needed.
The tenancy began on 4 July 2011, for herself and her three children. She had at all times been eligible for housing assistance in the form of a rental rebate.
She fell behind in her rent and in May 2012, the Commissioner applied for and was granted to conditional termination and possession order with arrears at that time of $5,421.05. Rent, after the rebate, was $165.55 per week.
She consented to the order, and was required to pay arrears at $30 a fortnight, from 28 May 2012 onwards. On 25 May 2012, she made a $170 payment.
On 20 June 2012, the tenant applied for a rent rebate to her future rent, and on 26 June this was approved noting "You will be required to pay a weekly rent of $163.60 from 8 July 2012."
It then noted "If you have a current arrears repayment arrangement, or there is an Order from the ACT Civil and Administrative Tribunal to pay off arrears, the repayment instalment must be added to the Weekly Rebated Rent shown above."
As of 30 June 2012, she was $6,025.45 behind in rent and a letter was sent to her on 5 July 2012. She was told that $6,356.55 needed to be paid before 15 July 2012 and the normal rent after this time.
"If your account is not up to date and you do not attend this appointment legal action will proceed. This will include issuing you with a Notice to Vacate the property and action to recover the debt," the letter noted.
She did not pay these funds. In August, she submitted a Centrepay deduction form, authorising rebated rent and extra amounts to be deducted from her Centrelink payments. Payments were then halted for a fortnight due to surgery, with Homenet noting that this would be added to her agreement.
She did not then recommence her payment of rent and arrears and contact with the tenant from the Commissioner's office was unsuccessful.
In November 2012, an unconditional termination and possession order was sought. A new rental rebate was being sought by the tenant, having been six months since the previous application.
A payment was deduced for rent in December 2012, however no arrears deductions were made, and later that month she was written to advising the approval of her rental rebate in the same terms as the June 2012 letter.
In January, the Housing Manager informed the tenant that her account would be referred to tribunal "due to non payment of legal agreement".
In February 2013, the Commissioner sent a letter to the tenant referring to the conditional termination and possession order of May 2013, noting: “As you have breached the above Orders the matter has been referred to the Housing Assistance and Tenancy Review Panel (HATRP) for consideration.”
This was eight months after the Commissioner had become aware of the situation.
In March 2013, the tenant attended Housing ACT office where she was told a recommendation was being sought for a warrant of eviction.
In May she was then advised that the Commissioner intended to seek an unconditional termination and possession order with effect as a warrant for eviction.
Rental arrears at this time stood at $10,166.60.
The difficulty comes about as the Commissioner looked to use the breach of the conditional termination and possession order as grounds for termination, but also notes that it wasn't 'final' enough to bring about a fresh tenancy agreement.
"There is no doubt that in cases where a lessor has failed for a significant period of time after termination of a tenancy agreement to take action to seek a warrant for eviction, the factual and consequently legal matrix may become complicated," the Tribunal's M.T Daniel said.
"It follows that I am satisfied that a conditional termination and possession order is self executing in the sense that it terminates a residential tenancy agreement, although this does not mean that all of the rights and obligations of the parties under that agreement end at the time of termination," Ms Daniel said.
The conclusion of the case was that the order sought by the Commissioner, under section 42B of the RTA, that would allow tribunal to direct the registrar to issue a warrant for eviction, was not approved.
"I will dismiss the application, although I am satisfied that the conditional termination and possession order operated to terminate the residential tenancy agreement and the tenant continues to live at the premises. This is because I am satisfied that the tenant continues to live at the premises under a new residential tenancy agreement which is implied as a result of the conduct of the parties over a prolonged period of time," she said.