Compensation Claims and Reduced Rent – the importance of timely responses and action

The recent case of Ericson v Elder & Anor [2024] ACAT 20 highlights the importance for managing agents to take prompt action to address issues raised by a tenant, particularly where those issues may appear to be minor in nature. In that case, the ACAT found that the managing agent’s failure to do so warranted the lessor paying to the tenant compensation in the sum of $1,750.00.

We note this case also involved claims by the tenant in relation to the validity of requests for access for the purpose of inspection, air conditioning maintenance and repair, iPayRent service fees and claims of intimidation and dishonesty, none of which were successful.

Building Key

Over the course of the tenancy, which commenced on 24 March 2021, the tenant notified the managing agent that a building key had not been provided and that the key was required to access the bin area, the back gate, pool, and stairs to the carpark.

The issue of the missing key was first raised on 12 April 2021 and again on 17 May 2021, but it was not until 22 May 2023 that a new key was provided to the tenant. In that time, the managing agent had also confirmed a new key was being ordered, but the new key was never provided.

Whilst the lessor submitted photo evidence indicating the tenant was provided a key to the building at the commencement of the tenancy, it was still held that the tenant suffered distress and physical inconvenient, and the lessor was ordered to pay to the tenant:

• $1,000 by way of compensation for loss of utility associated with the use of the bin area; and

• $500 for loss of utility associated with the use of the pool area.

This is despite, in the ACAT’s view, the tenant could have been clearer in articulating the purpose of the building key and the extent of the inconvenience caused by not having a building key. So, whilst there may have been mitigating circumstances surrounding the provision of the building key, it was the delay in organising the new building key which ultimately led to the ACAT, at least in part, finding in favour of the tenant.

Repairs

Like the building key, there were also delays to rectifying a window seal within the premises.

The tenant claimed that due to the lessor’s failure to rectify the window seal, which was first raised by the tenant on 12 April 2021, the tenant should be awarded compensation in the sum of $2,700 for the additional cleaning required and depreciation of towels used to clean up water and dirt, electricity costs for washing and drying towels, and additional heating costs.

Whilst it was acknowledged that the managing agent had on several occasions attempted to address rectification of the seal, the delay in repairing the window seal resulted in the ACAT ordering:

• the lessors pay the tenant the sum of $200 to compensate the tenant for failure to repair the window seal; and

• reasonable efforts be made to repair the window seal within 28 days of the date of the Orders.

Whilst the compensation awarded in favour of the tenant is significantly less than what the tenant originally sought, it may not have been awarded at all if the managing agent had attended to the issues raised by the tenant in a timelier manner. This case is a timely reminder of the important role managing agents play in communication between tenants and lessors, the need to respond to issues raised by a tenant in a timely manner and to rectify those issues (where possible).