Early Termination of a Fixed Term Tenancy Agreement by Tenants

Transcription

1 Early Termination of a Fixed Term Tenancy Agreement by Tenants 1. Ending the agreement because your landlord breached the tenancy agreement (s70 of the Residential Tenancies Act 1987) Section 70 of the Residential Tenancies Act 1987 says: Sometime tenants find themselves in a situation where they have to break a fixed term tenancy agreement early. Usually, there are costs involved in ending and agreement early, such as rent till a new tenant is found, advertising costs, etc. For more information on costs contact you local Tenants Advice service or go to However, under special circumstances there are avenues for ending a fixed term agreement without paying the usual costs for ending the agreement early. Some examples of special circumstances where you might seek to break an agreement early without having to pay the usual costs are: The landlord keeps on breaching the agreement You are suffering violence from a co-tenant or the landlord You would suffer undue hardship if the tenancy was not terminated The premises have become uninhabitable (1) The Tribunal may, on application by a tenant under a residential tenancy agreement, make an order terminating the agreement if it is satisfied: (a) that the landlord has breached the agreement, and (b) that the breach, in the special circumstances of the case, is such as to justify termination of the agreement under this section. (2) If the Tribunal makes an order terminating a residential tenancy agreement under this section, the Tribunal shall also make an order for possession of the residential premises specifying the day on which the order takes effect. The emphasis of section 70 is on special circumstances. Usually, when a landlord breaches an agreement, for example by not doing any required repairs, the tenant can apply to the Consumer, Trader & Tenancies Tribunal (CTTT) for an order that the landlord remedy the breach. This means you can t just end a fixed term agreement without any costs to you, because your landlord hasn t fixed a minor roof leak. The Tribunal said in Skea v Bowman (RT 91/1940) that Special may be defined as of a distinct or particular kind of character, particular individual or unique; extraordinary, exceptional, or especial. It does not mean merely that the court should have regard to the particular facts and circumstances of the case, but something particularly special unique or weighty should be located to justify the court in regarding those as being special circumstances. Some examples of special circumstance for which you may apply to the CTTT to end your tenancy under section 70 are:! There has been a previous Tribunal order that the landlord fix some serious repairs and the landlord not only keeps ignoring these orders, but the problems have become worse! The landlord has injured or seriously threatened you! The landlord keeps on entering your premises without your permission, even though you have a Tribunal order that the landlord stop breaching your quiet enjoyment 1

2 ENDING AN AGREEMENT BECAUSE OF BREACH BY THE LANDLORD (CONTINUED) If you want to end a fixed term agreement, because the landlord has breached the tenancy agreement, and there are special circumstances, you do not have to send a notice of termination, but can directly make an application to the Consumer, Trader & Tenancies Tribunal under section 70 of the Residential Tenancies Act If your landlord has been violent towards you, you should call the police immediately and take out an Interim Apprehended Violence Order. As mentioned, the circumstances will have to be such as to justify termination, and the Tribunal may order that the landlord fix the breach first, rather than terminate the tenancy. Therefore, if you apply for an order under section 70, it is advisable that at the same time you also apply for an order for compensation (s16) in the alternative. For example: An order to end the tenancy because the landlord has breached the Residential Tenancy Agreement (s70 RTA) In the alternate, an order that the landlord pay me compensation to the amount of $... for loss incurred as a result of breach by the landlord (s16 RTA) Remember, you will have to show that these are special circumstances. For documents supporting your application see the evidence list at the end of this fact sheet. Please Note: There is provision in the Residential Tenancies Act 1987, for tenants to issue a notice of termination for breach of the agreement (s57). In this case, a tenant would have to give a 14-day written notice (plus 4 business days if the notice is posted). Even though, s57 does not specify that the breach by the landlord has to be serious or persistent, the Tribunal has consistently found that in order to grant termination of the tenancy, a breach would have to be serious. For example, in Shaw v Laing [2004] NSWCTTT 519 the Tribunal noted that when a tenant gives a Notice of Termination it was still necessary for the Tribunal to consider, in the event of a dispute, whether the breach complained of justified the termination. Therefore, rather than giving a notice of termination under s57 of the RTA, you might want to apply straight to the Tribunal under s70 without having to first issue a notice. 2

3 1. ENDING AN AGREEMENT BECAUSE YOU ARE SUFFERING VIOLENCE FROM A CO- TENANT If you are in a co-tenancy (your name, and the name of the domestic violence perpetrator are both on the lease) and you are still in a fixed term agreement, you are jointly or severally (individually) liable to the landlord. This means, under normal circumstances, it would be very hard for you to leave the tenancy, lets say, just because you don t get on with your co-tenant, or you have split up. If you have suffered violence from a co-tenant, report the incident to the police, and contact your local Legal Centre or the chamber magistrate of your Local Court for advice about getting an Apprehended Domestic Violence Order (ADVO). Also write to the landlord and tell her or him about what happened and that you have left the premises. Ask that the landlord agree to assign your tenancy over to the co-tenant (see sample letter). To assign your tenancy, you will also need the agreement of the co-tenant, whom you should contact through a support-person. If your landlord and/or co-tenant do not release you from the agreement you might want to apply to the CTTT that the tenancy will be ended, as otherwise it would cause you undue hardship (s69a). Be aware, that the Tribunal cannot hear co-tenancy disputes, therefore the other party in your application is not your cotenant, but the landlord. Note that different Tribunal members have different views on whether they can end the agreement without the consent of the other co-tenant. Some Tribunal members have the view that they can only do so after the fixed term has expired. If you apply to the Tribunal to end the agreement, you will have to show that in the "special circumstances" of the case you would suffer "undue hardship" if the agreement were not terminated (see s69a below). For documents you might show to the Tribunal, see the evidence list at the end of this fact sheet. SAMPLE LETTER Undue Hardship due to Violence by Co-tenant Your name and address Date Landlord s or Agent s name & address Dear. Notification that I no longer reside at the premises at your address I am writing to give notice that I am vacating (have vacated) above premises on the grounds of undue hardship on The particulars of my special circumstances are (explain your situation, for example): I have suffered violence from my co-tenant and have been granted an interim Apprehended Domestic Violence Order My support person is currently negotiating with my co-tenant to assign the tenancy to him/her. Due to above circumstances I would appreciate if you would agree in writing to the assignment of the tenancy to my co-tenant. If we cannot come to an agreement to assign the tenancy, I will see no other option as to apply to the Consumer, Trader and Tenancy Tribunal that the tenancy will be terminated on the grounds of undue hardship to myself. If you would like to discuss this matter further, please feel free to call me on My new address is: New address Yours sincerely Your Name Keep a copy of your letter! 3

4 1. ENDING A TENANCY AGREEMENT, BECAUSE YOU WOULD SUFFER UNDUE HARDSHIP IF THE TENANCY WAS NOT TERMINATED (S69A OF THE RTA) Section 69A of the RTA says: 69A Tribunal may terminate residential tenancy agreement where tenant would otherwise suffer undue hardship (1) The Tribunal may, on application by a tenant under a residential tenancy agreement, make an order terminating the agreement if it is satisfied that the tenant would, in the special circumstances of the case, suffer undue hardship if the agreement were not terminated. (2) If the Tribunal makes an order terminating a residential tenancy agreement under this section, the Tribunal: (a) is also to make an order for the repossession by the landlord of the residential premises specifying the day on which the order takes effect, and (b) may make such other orders as it thinks fit (including an order that the tenant pay to the landlord compensation for the landlord s loss of the tenancy). In this situation, you do not have to send a notice of termination to the landlord, but can directly make an application to the Consumer, Trader & Tenancy Tribunal to terminate your tenancy, as otherwise you would suffer undue hardship (s69a see above) You will have to show that in the special circumstances of the case you would suffer undue hardship if the tenancy was not terminated. You will have to provide strong evidence and prove that the circumstances are extreme. Some examples of undue hardship in special circumstances are: You have received an offer for social housing You were unexpectedly retrenched, have no savings, and can no longer afford the rent You had an accident and are now disabled and the premises are no longer accessible to you You are in a domestic violence situation See evidence list at end of this fact sheet. (3) The landlord must take all reasonable steps to mitigate the loss and is not entitled to compensation for any loss that could have been avoided by taking those steps. 4

5 SAMPLE LETTER Undue Hardship Your name and address Date Landlord s or Agent s name & address Dear. Intention to terminate residential tenancy agreement at your address I am writing to give notice that I am vacating my premises on the grounds of undue hardship. I shall give vacant possession of the premises on The particulars of my special circumstances are (explain your situation, for example): moved here for a job, but have now been retrenched and cannot afford rent suffered injury which means I cannot get up and down the stairs to the bathroom I draw your attention to Section 69A of the Residential Tenancies Act 1987 which addresses the question of both, the tenant s and the landlord s liabilities when the tenant ends an agreement early due to hardship. Sub section 3 states: The landlord shall take all reasonable steps to mitigate the loss and is not entitled to compensation for any losses that could have been avoided by taking these steps. I ask you to re-advertise the premises as soon as possible. I will hand my keys in on and will contact your to arrange a time for a final inspection of the premises. I have applied to the Consumer, Trader & Tenancy Tribunal for an order terminating the tenancy. However, should we come to a written agreement that the tenancy is terminated without further costs to me, I will withdraw my application. If you would like to discuss this matter further, please feel free to call me on My new address is: New address Yours sincerely Your Name Keep a copy of your letter 5

6 4. ENDING AND AGREEMENT, BECAUSE THE PREMISES YOU LIVE IN HAVE BECOME UNINHABITABLE (FRUSTRATION) (S61 OF THE RTA) Ending the agreement because the premises have become wholly or partly uninhabitable (section 61 of the RTA), otherwise than as a result of a breach by the landlord. Examples of this would be a severe fire in the premises, or the roof coming off during a storm. As there is no breach by the landlord, you cannot seek compensation. Section 61 of the Residential Tenancies Act 1987 says: 61 Notice of termination where agreement frustrated (1) If residential premises under a residential tenancy agreement are, otherwise than as a result of a breach of the agreement, destroyed or rendered wholly or partly uninhabitable or cease to be lawfully usable for the purpose of a residence or are appropriated or acquired by any authority by compulsory process: (a) the rent abates accordingly, and (b) the landlord or the tenant may give immediate notice of termination to the other party. (1A) For so long as a residential tenancy agreement is not terminated under subsection (1) (b), then, for the purposes of subsection (1) (a): (a) the landlord and tenant may agree in writing as to the amount of rent payable, or (b) failing such agreement, either the landlord or tenant may apply to the Tribunal for an order determining the amount of rent payable. any rent paid by the tenant since the specified day that is in excess of the amount determined by the Tribunal, and (c) make such other orders with respect to the application as the Tribunal thinks fit. (2) A notice of termination of a residential tenancy agreement that creates a tenancy for a fixed term given under this section is not ineffective because the notice is given before the day the term ends. Note that in this case, you will have to give a notice of termination. If either the landlord or you give an immediate notice of termination to the other party, then you may agree in writing on how much rent you are going to pay. If you and the landlord don t come to an agreement, you then can apply to the CTTT for a hearing. Even where there is serious damage to the premises in circumstances where neither party is at fault (in breach), the responsibilities continue as long as a tenancy is on foot. This means that you are required to notify the landlord of the damage and the landlord is required to do any necessary repairs, if possible. Be aware that when you argue that the agreement is frustrated, you are saying that the problem has not been caused by a breach by the landlord. If there has been no breach, you cannot ask for compensation, although the Tribunal will still be able to reduce your rent. (1B) The Tribunal may, on application made under subsection (1A) (b): (a) by order, determine the amount of rent payable, from a day specified by the Tribunal, for the purposes of subsection (1) (a), and (b) order the landlord to repay to the tenant 6

7 PREPARING FOR YOUR HEARING FOR TERMINATION OF YOUR FIXED TERM AGREEMENT AT THE CONSUMER, TRADER & TENANCY TRIBUNAL (CTTT) Application to end the tenancy because of breach by the landlord (s70 of the RTA) What orders to you seek? An order to end the tenancy because the landlord has breached the Residential Tenancy Agreement (s70 RTA) In the alternative, an order that the landlord pay me compensation to the amount of $... for loss incurred as a result of breach by the landlord (s16 RTA) The second order is a backup just in case the Tribunal finds that the special circumstances of the case don t warrant an order for termination. When collecting your evidence, keep in mind that you will have to show that the breach by the landlord was serious and that you have to show that there are special circumstances. work Examples of evidence of a breach by the landlord Applications to the CTTT for termination of a fixed term agreement require that you show the CTTT that there are special circumstances, which warrant that the CTTT make a termination order. Therefore you will have to prepare your case well. For all matters before the Tribunal, it is important that you have a chronology of events. This chronology will assist you to tell the Tribunal member dates and times of certain events. For more information on the CTTT, call your local Tenants Advice Service and ask them to send you the CTTT Kit.!Photos or video!statutory declarations from people who have witnessed the breach!police Event Number!Copy of interim Apprehended Violence Order (if violence was by landlord)!copy of previous Tribunal Orders in relation to the breach Examples of evidence to establish the special circumstances of the case!medical certificate showing how the breach affects you!letters from support people on what impact the breach has on your life!break-down of the costs you have incurred as a result of the breach!letter from employer on what impact the breach has on your work 7

8 Application to end the tenancy because of breach by the landlord (s70 of the RTA)..continued As already discussed, there is a possibility that the Tribunal may not end the tenancy, because the member doesn t think you have established that the circumstances warrant it. This could be, because the member believes that an order that the landlord remedy the breach would be sufficient. For example, if you have applied to the Tribunal under s70 to end the tenancy, because you came home and the landlord was inside your unit, the Tribunal may order instead that you can have the locks changed at the landlord s expense and that the landlord not get a key for the new locks. Therefore it is important that you ask for an alternate order for compensation. This compensation can either be for economic loss (damages to your goods, or expenses incurred) or non-economic loss (distress, embarrassment and inconvenience) resulting from the breach. Ring your local Tenants Advice Service and ask them to send you the Guide to Compensation Claims to help you prepare for the hearing. You will have to prove that in the special circumstances of the case you would suffer undue hardship. Special circumstances are any You will have to prove that in the special Application to end the tenancy because you would otherwise suffer undue hardship (s69a of the RTA) circumstances of the case you would suffer undue hardship. Special circumstances are any unusual and unexpected changes in your situation, which would cause you hardship if the tenancy would continue. What orders do you seek? An order that the tenancy be terminated as otherwise I would suffer undue hardship (s69a) Make sure you put URGENT on the top of the Tribunal application form and give reasons why the matter needs to be dealt with urgently Examples of evidence of special circumstances and of the hardship you would suffer:! Letter from Housing NSW offering you accommodation! Proof of income (eg Centrelink statement or payslip) showing that you are on low income and could not afford to pay two rents! Letter from doctor outlining why you can no longer live in the premises! Employment separation certificate and bank statements showing that you don t have any savings and no longer can afford to pay the rent! Copy of domestic violence order (ADVO)! Plane ticket (if you have to leave the country for an emergency)! Letters or statutory declarations from agencies and/or support people confirming the circumstances of your case! Budget drawn up by a financial counsellor If the Tribunal terminates you tenancy, it can also order that you pay compensation to the landlord. You may need to explain why you should not have to pay compensation. 8

9 Application to end the tenancy because the premises you live in have become uninhabitable (s61 of the RTA) If the premises you live in have become partly or wholly uninhabitable, you will have to give a notice of termination. This can be a notice for immediate vacation of the premises. If you and the landlord cannot agree on the fact that you will be leaving, and on the amount of rent to be paid till you vacate the premises, you will have to apply to the Consumer, Trader & Tenancy Tribunal for an order to end the tenancy after your notice of termination has expired. What orders do you seek? An order to terminate the tenancy as the agreement has been frustrated.! Photos of the state of the premises! Letter from Council to landlord (if you have a copy)! Reports from authorities, such as Council Health Inspector! Copy of any correspondence between you and the landlord The Tribunal may determine the amount of rent payable (if any) and order the landlord to repay you any rent paid that is in excess of the amount determined by the Tribunal. Examples of evidence to show to the Tribunal This information kit has been written and produced by the Inner Sydney Tenants Advice and Advocacy Service at This publication has been produced with the financial assistance of the Law and Justice Foundation of NSW. The Foundation seeks to advance the fairness and equity of the justice system and to improve access to justice, especially for socially and economically disadvantaged people. Disclaimer: any opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Law and Justice Foundation's Board of Governors. 9