News

Unconditional sale does not end landlord’s responsibilities

Thursday 6th of May 2021

Murlun Farm found this to its cost when tenant William Kroon went to the Tenancy Tribunal claiming costs for repairs that were not carried out.

The landlord also filed a claim wanting Kroon to pay $1,147 for replacing a stove in February this year at the Dargaville farm, which he was buying.

Kroon signed a conditional agreement, with a long settlement date, in April 2018 to buy the 50-hectare farm and house from Murlun Farm owned by Mr and Mrs Lunn.

They drew up an agreement for Kroon to lease the land, in the meantime, and a tenancy agreement starting in June 2018 was signed for the house.

Kroon lived at the farm on this basis and the property sale became unconditional in September last year. The property was settled at the end of March this year.

During his tenancy, Kroon came across various maintenance issues and gave Murlun Farm a 14-day breach notice in January this year.

The landlords did not take action on the 14-day notice, saying their maintenance obligations ended in September when the sale went unconditional.

Kroon asked the Tenancy Tribunal for damages relating to maintenance issues.

He was awarded $500 for the landlords’ failure to carry out repairs to door handles, laundry tub taps, a garage door, window latches, front door lock and shower slide and soap dish.

The tribunal threw out Murlun Farm’s claim for a refund of the stove’s purchase.

The landlords claimed because their Residential Tenancy Act (RTA) obligations ended in September the cost of the stove replacement should be paid by Kroon.

Their argument was based on section 5 of the RTA which lists excluded tenancies and one type is: Where the tenant is the purchaser of the premises under an agreement for sale and purchase with the landlord as vendor, not being an agreement that can be revoked or cancelled at will by the vendor.

However, the tribunal didn’t agree it was the correct interpretation.

Adjudicator N Blake said although it was an excluded tenancy, the landlord and tenant had contracted back to the RTA under section 8 of the act by signing a tenancy agreement on a standard Tenancy Services form, which has a landlord’s obligations clearly stated.

“The RTA applies for the full duration of the tenancy and the sale and purchase agreement becoming unconditional in September does not affect the application of the RTA and the landlords’ obligations,” said Blake.

“Under the agreement, landlords are obliged to provide and maintain the premises in a reasonable state of repair and the cost of replacing the stove is a maintenance cost to be paid by the landlords.”

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