The Victorian Supreme Court’s ruling on a landlord’s obligation towards repairs may set a precedent.
When a tenant in Gippsland sought the intervention of the Victorian Civil and Administrative Tribunal (VCAT) into the state of repair of her rental, the outcome led to an appeal through the Supreme Court. That LANDMARK DECISION may have implications for landlords across the nation.
A disability pensioner had rented the only home she could afford and the premises were in poor condition, which deteriorated further during her five-year tenancy. The property offered a litany of repair issues, such as holes in the floor, walls and ceilings; dampness and resultant mould and rot; rat infestation; and it was sinking in one corner.
The condition of the property was described as ‘filthy’, ‘dangerous’ and ‘unusable’. However, when the tenant sought compensation for a breach of the landlord’s obligation to “ensure that the rented premises are maintained in good repair”, VCAT ruled in favour of the landlord.
VCAT determined that the scope of the landlord’s duty to the condition of the property was confined to the start of the tenancy, irrespective of the state of repair; that is, if the house was rented out in poor condition, the landlord had no obligation to bring it up to scratch. It is essentially a case of caveat emptor so far as it is presumed that the tenant has examined the premises, noted any defects and has agreed to accept the premises in spite of the defects. There is an oft-quoted dictum: “There is no law against letting a tumbledown house”.
Or is there?
An appeal to the Supreme Court saw the VCAT decision overruled. The court concluded that landlords should ensure a residential premises is maintained in good repair, even if the property is dilapidated when the tenant takes occupancy.
Cases like these are seeing a growing call for minimum standards for health and safety to be imposed on rentals. Only SA and Tasmania have introduced legislation that sets out the minimum standards and certain amenities (such as cooking areas, a bathroom, and hot and cold water) are provided in rental properties.
From an insurance perspective, maintaining the property is a non-negotiable requirement. Failure to protect and maintain the premises can void a policy and leave a landlord exposed to losses.