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LONG TERM TENANTS
1. Section 94 (1) (a) of the Residential Tenancies Act 2010 defines ‘long term
tenant’ as a ‘tenant [who] has been in continual possession of the same
residential premises for a period of 20 years or more’.
2. In regards to no-grounds terminations the Act treats long term tenants
differently to other tenants (see Sections 84 (4), 85 (4) and 94) . Section 94
states:
94 Termination of long term tenancies
(1) The Tribunal may, on application by a landlord, make a termination
order for a residential tenancy agreement:
(a) if the tenant has been in continual possession of the same residential
premises for a period of 20 years or more, and
(b) if the tenant occupied the premises under a fixed term agreement, the
fixed term of the original agreement has expired, and
(c) if the Tribunal is satisfied that it is appropriate to do so in the
circumstances of the case.
(2) A landlord may make an application under this section without giving
the tenant a termination notice.
(3) The Tribunal must not make a termination order under this section that
specifies a termination date that is before the end of the fixed term if the
residential tenancy agreement is a fixed term agreement.
(4) The Tribunal, in determining the day on which vacant possession of
the residential premises is to be given to the landlord, must not order that
vacant possession be given earlier than 90 days after the order is made.
The Act treats long term tenants differently in three respects:
•
The landlord applies directly to the Consumer, Trader and Tenancy
Tribunal for a termination order, without issuing a notice of termination.
•
The Tribunal must look at ‘the circumstances of the case’.
•
If the Tribunal proceeds to make an order, then it must not make an order
for possession for a date earlier than 90 days from the date of the order
for termination.
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3. The first dot point in Paragraph 2 is a radical departure from previous practice.
The landlord does not issue a notice of termination (and if they do, it is not a
termination notice under the Act).
4. The second dot point in Paragraph 2 preserves the status-quo from the
repealed Residential Tenancies Act 1987 (Section 64 (2) (c)), but only for a long
term tenant.
5. The third dot point in Paragraph 2 introduces a problem that occurred only
infrequently under the previous Act. When an order for termination is made, there
is no longer a tenancy on-foot and it is 90 days before the possession order
takes effect. Reasons follow:
(i). Section 81 (3) of the Residential Tenancies Act 2010 states that a
residential tenancy agreement terminates if the Tribunal makes an order
terminating the residential tenancy agreement.
(ii). In the case of long term tenancies, Section 94 (4) of the Act states that
the possession order must be dated to take effect at least 90 days after
the order terminating the residential tenancy agreement.
(iii). But this leaves the former tenant and former landlord in limbo, as the
former tenant continues to occupy the premises without a residential
tenancy agreement on-foot which bind parties to Part 3 ('Rights and
obligations of landlords and tenants') of the Act. However, this situation is
addressed by the Tribunal making an order under Section 188 (b) of the
Residential Tenancies Act 2010: that is, to suspend the operation of the
order terminating the residential tenancy agreement until the same date
that the possession order takes effect.
6. On 12 December 2011 Older Persons Tenants Service wrote to the
Chairperson of the Consumer, Trader and Tenancy Tribunal seeking a
‘Chairperson’s Directions’. On 30 April 2012 the Chairperson placed
Chairperson’s Directions CTTT CD2012-3 entitled ‘Suspension of operation of
order for termination to date for possession’ on the website of the Consumer,
Trader and Tenancy Tribunal. This may be viewed at:
http://www.cttt.nsw.gov.au/Resources/Publications/Chairpersons_directions/Susp
ension_of_operation_of_termination_order.html
7. It should be noted that long term tenants are treated no differently to other
tenants where the termination notice provides grounds.
8. Following the commencement of this provision OPTS received an enquiry
where the original tenant signed a lease or residential tenancy agreement more
than 20 years ago, but died with their spouse taking over the tenancy. However,
the spouse has lived at the premises ‘continually’ for more than 20 years.
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The question arises whether the spouse is a long term tenant within the meaning
of the Act. There are two arguments that support an answer in the affirmative.
Firstly, Section 3 of the Residential Tenancies Act 2010 defines tenant to include
‘the person to whom such a right passes by transfer or operation of the law’.
Secondly, The Macquarie Dictionary (Second Edition, 1991, p.388) defines
‘continual’ as ‘proceeding without interruption or cessation; continuous in time’.
Janice Gray, Brendan Edgeworth, Neil Foster and Scott Grattan, Property Law in
New South Wales , Second Edition, Butterworth, 2007 (pp 184 to 186) discusses
the meaning of ‘possession’:
… it is not a term which has been neatly and succinctly judicially defined' Toohey
J in Mabo v Queensland (No 2) described it as ‘a conclusion of law defining the
nature and status of a particular relationship of control by a person over land’
[my emphasis].
Applying the definition of ‘continual’ and drawing upon the comments by Toohey J
in Mabo v Queensland (No 2), even though the name of the deceased spouse only
was on the original lease or residential tenancy agreement, it may argued,
depending upon the circumstances, that both jointly exercised control over the
land. Hence, it follows that the surviving spouse’s continual possession of the
same residential premises is for more than 20 years.
It is doubtful whether a child (instead of a surviving spouse in the above
scenario) would meet the criterion of ‘control over land’ and, accordingly, any
attempt to assert that the child was a long term tenant would fail.
9. Following the commencement of this provision OPTS received an enquiry
where current the tenant initially may have been a boarder, but he had lived at
the same premises ‘continually’ for more than 20 years. What is relevant is
their status as a tenant at the time they are asked to go, and the length of their
occupation of those residential premises. Indeed, other categories of tenants who
similarly might be covered by this provision include an owner who became a
tenant such as one of the many victims of the HomeFund fiasco.
10. Watch a pitfall with Section 110 (1). A tenant of 20 years or more standing
who receives a 90-day termination notice may be seen as abandoning their
tenancy (and up for all the associated costs) if they move out early using Section
110 of the Act. The reason for this is that the termination notice that they
received is not a termination notice within the meaning of Section 80 of the Act,
because of the operation of Section 85 (4).
If the tenant wishes to leave before the 90 days is up (or until such time as there
is a Tribunal order terminating the tenancy), then one course open to them is to
obtain the landlord's consent under Section 81 (4) (e).
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There is an alternative interpretation of the so-called 'pitfall' with Section 110 (1)
(thanks to Chris Martin of the Tenants’ Union of NSW). It is not abandonment, but
a termination by consent. Although the landlord’s notice is not a termination notice, it is
still a representation on the part of the landlord that they seek an end to the tenancy.
Neither is this representation conditional. By making their representation in the form of a
90-day termination notice, the implicitly assumes the 'get out sooner' provision that
Section 110 inserts into such notices. Also, there is the matter of estoppel: ie the
landlord represents to the tenant that their tenancy may end per Sections 85 and 110.
The tenant relies on that representation to their detriment by vacating in the absence of
a valid termination notice. Therefore, the landlord is estopped from asserting their legal
right to recover losses.
Robert Mowbray
Older Persons Tenants Service
16 July 2012
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Attachment 1
Submission to Consumer, Trader and Tenancy Tribunal
The landlord seeks a termination order under Section 94 of the Residential
Tenancies Act 2010. This section states:
94 Termination of long term tenancies
(1) The Tribunal may, on application by a landlord, make a termination
order for a residential tenancy agreement:
(a) if the tenant has been in continual possession of the same
residential premises for a period of 20 years or more, and
(b) if the tenant occupied the premises under a fixed term
agreement, the fixed term of the original agreement has expired,
and
(c) if the Tribunal is satisfied that it is appropriate to do so in the
circumstances of the case.
…
(4) The Tribunal, in determining the day on which vacant possession of
the residential premises is to be given to the landlord, must not order that
vacant possession be given earlier than 90 days after the order is made.
The tenant asks that the landlord’s application be dismissed because of ‘the
circumstances of the case’.
Clearly, it was the intention of Parliament in 2010, when the Act was
enacted, for the Tribunal to give special consideration to the circumstances
of long term tenants, with it having the discretion to dismiss an application
brought by the landlord.
I refer to the case of RTA v Swain in which the NSW Court of Appeal upheld
the decision of Rolfe J in the Supreme Court matter of Swain v Residential
Tenancies Tribunal (unreported Supreme Court of New South Wales 22
March 1995 Rolfe J).
The Supreme Court judgment in Swain held that the Residential Tribunal in
considering an application to terminate the tenancy under section 64 (2) (c)
the Tribunal must give weight to any possible hardship to the tenant when
considering under that section ‘the circumstances of the case’. Section
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64(2)(c) was held to apply when termination was commenced under section
58 of the Act. The Court of Appeal in endorsing Rolfe J's reasoning on the
operation of section 64 (2) (c) sets a test, which requires the Tribunal to
consider the hardship to the tenant if the tenancy were terminated. Rolfe J
noted in that case:
... Possible 'circumstances', which may have to be taken into account, are
the time the tenant has occupied the premises, the age and state of health of
the tenant, the necessity for any number of reasons for the tenant to live in a
particular area, and the inability of the tenant to obtain other suitable
accommodation in which, of course, I include accommodation in an area
suitable for matters such as proximity to family, facilities or employment. (at
14)
I refer the Tribunal to the discussion of Section 64 (2) (c) of previous
Residential Tenancies Act 1987 on pages 170 to 175 of Allan Anforth and
Peter Christensen, Residential Tenancies Law and Practice New South
Wales, 4th Edition, 2008.
The tenant’s circumstances are detailed in Appendix 1 [tenant to append a
document called ‘Appendix 1” that spells out their circumstances and attaches evidence, such
as statutory declarations, medical certificates, etc.].
The tenant submits that, because of the circumstances of the case, the
landlords’ application should be dismissed.
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Attachment 2
POSSIBLE CONSENT ORDER
The Tribunal makes the following orders:
1. That the residential tenancy agreement between the parties terminates
today.
2. That the tenant will give vacant possession of the residential premises
on … [insert date … must be a date not less than 90 days after date of Tribunal
hearing].
3. That the tenant will pay or occupation fee of $X/7 per day whilst he
remains at the premises [where $X is the weekly rent].
4. That the Tribunal will suspend the operation of the order terminating
the tenancy and the order to pay occupation fee until … [insert date, being
the same date that the possession order is to take effect]. (s188 (b) of RTA 2010)
The Tribunal notes that the landlord agrees that, should the tenant wish to leave
earlier than … [insert date, being the day before the possession order is to take effect], the
landlord will have no objection as long as 7 days’ written notice is given. The
landlord will only require the rent (or occupation fee) to be paid up to the new
vacating date. 1
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Any such agreement to leave earlier than the possession date should be turned into a written agreement by
the landlord and the tenant at the time that the tenant gives the 7 days’ written notice in order for the
landlord to be bound by s. 81 (4) (e) of RTA 2010. Alternatively, it is sufficient for the tenant to give 21
days written notice under s. 97 of RTA 2010.
Long term tenants 16 July 2012