The Landlord's Guide To
Renting
Part 4 – Quiet
Enjoyment.
Tenants breaking a lease
Landlords cannot enter a rental property without good
reason.
Inspections must be notified in advance because Tenants
are entitled to their privacy.
Tenants are allowed to break a lease before the fixed
term ends.
Landlords may dispose of a tenant’s goods which are
abandoned when they move out.
This newsletter sets out the rules around quite enjoyment
and tenants breaking a lease.
Quiet enjoyment
All leases contain this guarantee to the tenant -
quiet enjoyment.
Think of this guarantee as a Do Not Disturb sign
hanging on the front door knob.
As clause 14 of the standard Residential Tenancy
Agreement puts it –
The landlord agrees not to interfere with the
reasonable peace, comfort or privacy of the tenant in using
the residential premises.
Quiet enjoyment does not prevent a landlord from
contacting a tenant. In Tribunal decision 2009/330, the
landlord had left text messages for unpaid rent during
working hours, which were not received by the tenant until
the early hours of the next morning for technical reasons.
Also, the landlord made a phone call about a cable hanging
down from the home unit to the garage. The tenant complained
of harassment. The Tribunal ruled that the landlord had
acted reasonably in texting and in telephoning during
working hours.
Quiet enjoyment is the reason why there are rules
for the landlord to observe when it comes to keys and inspections.
Keys
At the start of a tenancy, the tenant is handed the keys,
opening devices (swipe cards, remote controls) and access
codes, free of charge. This entitles the tenant to be in
occupation with quiet enjoyment.
Many landlords photocopy each and every key and device and
have the tenant sign a receipt, to minimise disputes with
the tenant later on about the replacement cost of lost keys
and devices. The landlord is entitled to keep a duplicate
set of keys and devices.
Both landlord and tenant have the right to change a lock or
security device if they have a reasonable excuse. A tenant
has a reasonable excuse for changing locks if their former
flatmate or visitor has not returned their key, or if the
landlord has harassed the tenant or if a ‘creepy landlord’
has been using their key to enter unannounced. If so, the
tenant must give a copy of the new key or opening device to
the landlord within 7 days of the change.
The landlord must keep the premises secure. This means that
the locks and security devices must be in working order. In
high crime areas, security doors and bars may need to be
installed. Window locks will help tenants to pay less for
contents insurance.
A tenant must have the landlord’s permission to install
additional locks or security devices. A landlord may refuse
permission because of fire safety if the locks and security
devices are to be installed on the sole exit door.
Inspections
A tenant must allow entry for general inspections, sale
and new tenant inspections, and give access for repairs and
urgent inspections, provided that a landlord gives the
required entry notice. The entry notice is often
given by telephone, and confirmed shortly beforehand because
some tenants like to be present during inspections.
General inspections A landlord must give at least 7
days’ notice for a general inspection or valuation. A
landlord is limited to 4 general inspections every 12
months. Often these are used to prepare a condition report
upon the property, but can be used for any purpose.
Sale inspections A landlord must give at least 14
days’ notice before the sale inspections are to start. Two
open houses per week are permitted on agreed days and at
agreed times. If the property is sold during a periodic
lease (as opposed to a fixed term lease), the landlord may
end the lease by giving a 30 day termination notice.
New tenant inspections During the last 14 days of a
fixed term or notice period, the landlord may show the
premises to prospective tenants, provided they give
reasonable notice.
Necessary repairs and urgent inspections A landlord
must give 2 days’ notice for access for necessary repairs,
and urgent inspections for health and safety reasons. No
notice is needed for emergency repairs.
Inspections and repairs are limited to 8.00am and 8.00pm,
Monday to Saturday.
The failure to give notice can have consequences. In
Tribunal decision 2012/96, the tenant had given 14 days’
notice to terminate the lease because the landlord had
entered the premises for inspections using their own key
without prior notice. The Tribunal decided that the tenant
was entitled to do so and the landlord was not entitled to
any compensation for the tenant breaking the lease in
reliance upon the notice.
Compensation for breaking a
fixed term lease
A tenant is liable to compensate the landlord if they
break a fixed term lease by moving out early. The tenancy
ends the day when the tenant vacates and the keys and
opening devices are dropped off, or if the premises are
abandoned, the day when the landlord re-enters.
A tenant can either pre-agree to a break fee or leave the
break fee amount to be calculated when a new tenant starts
their lease. The break fee is payable regardless of whether
or not the tenant gives notice. It is sensible for a tenant
to give notice to put a stop to the rent.
The break fee is payable in addition to the
rent payable up to the date the tenancy ends.
Clause 41 of the standard Residential Tenancy
Agreement sets out a pre-agreed break fee payable by
the tenant if the lease term is up to 3 years:
- a flat fee of 6 weeks rent - if less than one half
of the term has expired; or
- a flat fee of 4 weeks rent - if more than one half
of the term has expired;
If the lease term is more than 3 years, the amounts are
as agreed.
The clause 41 break fee is set by the Tenancy Law. It is
payable even if the landlord re-lets the premises quickly
and makes a ‘profit’. The break fee applies in lieu of
compensation for loss of rent until the premises are
re-leased, re-letting fees and advertising costs.
The tenant is not liable to pay the break fee if the
tenant has terminated the lease because of the landlord’s
breach, or because the premises are damaged by fire or flood
or are storm damaged and become uninhabitable, or for
special reason such as a court order or an offer of social
housing or a place in an aged care facility or hardship.
Abandoned goods left for Council clean-up on the foot
path and nature strip outside a block of home units in
Sydney.
Landlords and tenants can leave the break fee to be
calculated to cover the actual loss by deleting
clause 41. For the landlord to claim the actual loss of
rent until the premises are re-rented, re-letting fees and
advertising costs, they must show that they have taken all
reasonable steps to mitigate their loss. A landlord has not
taken reasonable steps to mitigate their loss if the
premises are not advertised for lease or are not rentable
because of renovation. The landlord may advertise for a
higher rent, so long as they reduce the rent to the amount
under the “old” lease if they do not find a tenant
reasonably quickly. If the landlord has not taken all
reasonable steps to mitigate their loss, they will be
restricted to the same amounts as if the clause 41
break fee applied.
In Tribunal decision 2012/49, the tenant signed a 6 months
lease, paid a rental bond and paid 3 months’ rent in
advance. The tenant changed his mind and did not move in. He
claimed a refund. The Tribunal ruled that the tenant was
entitled to a refund of the rental bond. Clause 41 had been
deleted and so the break fee was to be calculated. The
landlord demonstrated that despite reasonable advertising,
the rental premises remained unrented for over 3 months
because the house was unique in style, and was therefore
difficult to let. The Tribunal ruled that the landlord was
entitled to keep the 3 months rent paid in advance as
compensation for the loss of rent for the tenant breaking
the lease.
In situations where clause 41 is deleted, most landlords
charge their usual re-letting fees and advertising costs,
and agree with the tenant the deduction from the rental
bond. But if the dispute goes to the Tribunal, only a
percentage of these fees and costs will be awarded. In
Tribunal decision 2012/183, the tenant abandoned the
premises with 4 months of the 4 year term remaining. There
was no pre-agreed break fee clause in the lease and
so the Tribunal awarded the landlord only 8.5% of the
re-letting fee and advertising costs, the percentage being
4/48ths of the term.
These days, many tenants prefer to continue in a periodic
lease rather than renew a fixed term lease because they can
give 21 days’ notice and pay no break fee when they want to
move out. The tenant has security because the landlord must
give 90 days’ notice to terminate the lease (except in the
case of sale where the notice is 30 days).
Disposal of abandoned goods
The Tenancy Law gives landlords clear rules to follow to
dispose of goods abandoned by former tenants. Provided the
landlord follows the rules, the landlord will not be liable
to compensate the tenant for the value of the goods or for
having disposed of them.
perishable goods - the landlord is authorised to
dispose of perishable goods and rubbish such as old
newspapers, perishable food, dying pot plants and broken
furniture immediately. No prior notice needs be given to the
tenant.
goods other than perishable goods or personal documents
– the landlord must give the former tenant 14 days’
notice that furniture, clothing, personal effects and so
forth will be disposed of unless claimed. The notice may be
mailed, given in person or stuck to the front door. 14 days
afterwards, the landlord may dispose of these goods without
liability. The landlord may charge an occupation fee for up
to 14 days for storing the goods in the premises. Leased
goods should be returned to the rental company. The rest may
be donated to charity, put out for the free Council clean-up
or pick-up, kept in the premises (e.g. curtains) or sold.
Experienced landlords will photograph goods before disposing
of them.
The goods must be stored in a safe place. In Tribunal
decision 2012/302, the Tribunal ordered the landlord to
compensate the tenant $1,630 for damage caused in the
removal process and while the goods were stored on a flat
top truck covered by a tarpaulin.
personal documents – the landlord must give the
former tenant 90 days’ notice to collect their personal
documents. Personal documents can consist of a birth
certificate, passport or other identity document; bank books
or other financial statements or documents; photographs,
medals, trophies and other personal memorabilia; licences or
other documents conferring authorities, rights or
qualifications.
If the tenant’s personal documents have not been collected
within 90 days, then they may be returned to the authority
that issued the documents, or must be stored safely for 6
years for the tenant to collect.
The Landlord’s Guide to Renting has been produced by
Cordato Partners Lawyers, as part of its Property Law
practice. It contains a brief outline of the Tenancy Law.
Because it is a general guide, is not intended to be
relied upon for any specific tenancy situation. For those
situations professional advice should be obtained.
If you would like to receive the Guide as a pdf email
attachment rather than as a hard copy, or would like further
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and relatives -
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