We often hear complaints from our clients that when they attend Tribunal and /or Court, that they are not awarded any compensation, for instance, for the time taken to prepare an application to Tribunal/Court, or for the time taken in attendance at the Tribunal/Court.
Many Property Managers have stated to us that when at Tribunal/Court they have applied for these items as compensation but it has been rejected. Certainly the management agreement between your agency and the landlord provides that the landlord will be responsible for your professional costs in preparation and attendance at Tribunal/Court, however the fact is that that agreement is between you and the landlord.
While the legislation dealing with awarding compensation to a landlord in residential tenancies matters Australia wide is quite encompassing in terms of the nature of the compensation that may be awarded for the breach of the agreement, we have found that most Tribunals/Courts have a difficulty in drawing the correlation between the breach by the tenant and the cost to the landlord as a consequence of that breach as per the terms of the management agreement.
We therefore suggest that you include some special conditions in your tenancy agreement whereby the tenant acknowledges that in the event of a breach of the lease, they then become liable for payment of other items other than the usual such as cleaning, repairs etc – items such as re-advertising the property, re-letting fee, your costs of preparing a Tribunal/Court application and attendance at the Court Tribunal.
These special conditions also re-enforce the tenant's acknowledgement that he/she/they are liable for compensation to the landlord for any loss suffered by the landlord as a result of the breach by the tenant.
SPECIAL CONDITIONS TO RESIDENTIAL TENANCIES AGREEMENT
1. In the event that the Tenant terminates this Tenancy Agreement before the end of the fixed term tenancy or of the Landlord lawfully terminates this Tenancy Agreement due to either default in payment of rent or any other breach of this agreement (including abandonment of the property), the Landlord may claim and the Tenant must pay compensation to the Landlord that the Landlord reasonably suffers as a result of the Tenant's breach and/or default. The Landlord will endeavor to mitigate any loss sustained as a consequence of the Tenant's default and/or breach.
2. The Tenant acknowledges that in the event of termination of this Tenancy Agreement, whether by the Tenant before the end of the fixed term agreement or by the Landlord for an unremedied breach of this agreement by the Tenant, and the Landlord is required to make application to a Court/Tribunal for Orders for either termination of the agreement and possession of the premises or compensation for breach of the agreement the following expenses may be incurred by the Landlord and or charged by the Managing Agent to the Landlord:
(a) Tribunal/Court filing or lodgement fee;
(b) Sheriff/Bailiff fee for execution of Warrant for Possession of premises;
(c) Managing agent's preparation fee for application to Tribunal/Court (fixed at $100.00 as per the Management Agreement between the Managing Agent and the Landlord);
(d) Attendance fee at Tribunal/Court by the Managing Agent on the hearing of the Application (whether for order for termination and possession or compensation) fixed at the rate of $100.00 per hour as per the Management Agreement between the managing Agent and the Landlord;
(e) Advertising expenses for re-leasing of the property;
(f) Letting fee chargeable by the Managing Agent to the Landlord as per the Management Agreement between the managing Agent and the Landlord (fixed at the equivalent of one week's rent plus GST).
The Tenant acknowledges that the above expenses and outlays will be reasonably incurred by the Landlord as a consequence of a breach of this agreement by the Tenant and will be payable by way of compensation by the Tenant to the Landlord.
Should anyone believe that there should be any other matters included in these special conditions we would really appreciate hearing from you.
Additionally, if you decide to use the suggested special conditions, and then encounter any problems with enforcement by way of obtaining appropriate orders from the Tribunals/Courts we would appreciate hearing from you so that consideration can be given to either an Appeal or application for re-hearing.