Repeated breaches - The importance of following the correct procedure

It is no doubt a daily occurrence for property managers to refer to the Residential Tenancies and Rooming Accommodation Act 2008 (RTRA Act) when considering the appropriate action to take with regards to a tenancy dispute.

In this article, we consider the operation of section 299 of the RTRA Act and provide property managers with best practice recommendations for navigating the pathway to the Queensland Civil and Administrative Tribunal (Tribunal) when applying for termination of a tenancy agreement for repeated breaches by a tenant.

Section 299 of the RTRA Act

In accordance with section 299 of the RTRA Act, a lessor may apply to the Tribunal for a termination order if:

1. the lessor gives 2 notices to remedy breach to the tenant for breaches of a particular provision in relation to the agreement; and
2. each notice relates to a separate breach of the particular provision; and
3. the tenant remedies each breach within the relevant allowed remedy period; and
4. the tenant commits a further breach of the particular provision after the breaches mentioned in paragraph (a); and
5. all breaches happen within the period prescribed under a regulation for this section.

The prescribed period for the purposes of section 299(1)(e) of the RTRA Act is 12 months [1].

When should property managers consider Section 299 for repeated breaches?

Section 299 of the RTRA Act often causes confusion among property managers and is most commonly considered when determining the appropriate action to be taken in relation to rental arrears.

It is not the relevant section of the RTRA Act to be relied upon where there have been multiple unremedied breaches of a tenancy agreement for rental arrears. In those circumstances, the relevant pathway to follow is to issue a Form 12 Notice to Leave for unremedied breach and if necessary, proceed with an application to the Tribunal for a termination order for failure to leave [2].

Section 299 of the RTRA Act is the correct section to use when seeking a termination order in circumstances where the tenant has failed to pay rent when due and only makes payment of the rent after being issued with a Form 11 Notice to Remedy Breach, prior to the remedy period stated within the Form 11 [3].

Section 299 of the RTRA Act is designed to prevent tenants from stalling and manipulating the system in circumstances where a lessor is unable to issue a Form 12 Notice to Leave if the breach has been remedied. Under section 299, a lessor can apply to the Tribunal to terminate the tenancy agreement without the need for a Form 12, so long as there have been two remedied breaches followed by a third breach all happening within 12 months [4].

However, where no action is taken by the lessor until the 7^th or 8^th breach of the particular provision of a tenancy agreement, it may be implied that the lessor will accept that type of breach given that steps were not taken to terminate the tenancy agreement. This is exactly what happened in the decision of Southport Realtor Pty Ltd t/as Shores Realty v Rostas [5]. In this decision, the Appeal Tribunal stated that:

“There is a common misconception in the industry about the use of this section. Eight breach notices are not more deserving of action than two. The section is designed to be a “short sharp shock” to those tenants who, like Mr Rostas, are inclined to test the lessor. If, like Shores Realty, the lessor allows the breach behaviour to continue past two breaches then the tenant may have a legitimate expectation that the lessor will conduct business this way and that the lessor will tolerate minor breaches."[6]

The Appeal Tribunal held in this decision that there were “sufficient grounds to refuse the exercise of the tribunal’s discretion to issue a termination order.” [7]

Repeated breaches must occur during the relevant tenancy agreement

What is also critical for the operation of section 299 of the RTRA Act is not only that all three breaches of a particular provision have occurred within 12 months, but also that all three breaches relate to the same tenancy agreement.

For example, if there have been two remedied breaches of a particular provision of the tenancy agreement, say, rental arrears, and a new tenancy agreement is entered into with the tenant before a further breach for rental arrears occurs, the requirements of section 299 of the RTRA Act have not been satisfied.

In the above example, while all three breaches for rental arrears occurred during the 12 month period, the conduct spanned two tenancy agreements. For the requirements of section 299 of the RTRA Act to be satisfied, all three breaches for rental arrears must occur within 12 months and must also be breaches of the same tenancy agreement.

Conclusion

Whilst all parties involved in residential tenancy disputes before the Tribunal must represent themselves (some exceptions apply), they are, of course, always able to seek legal advice in regard to all aspects of a dispute.

If property managers have any concerns about a residential tenancy dispute, including compliance with the RTRA Act, it is strongly recommended that they seek legal advice. REIQ members are also able to seek advice via the REIQ’s Property Management Support Service and/or Legal Advisory Service.

Read more: Navigating Queenslands new minimum housing standards.

Read more articles about property management here.