When is the rent paid?

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Disputes often arise about whether the tenant has paid the rent by the due date in accordance with the lease.

The problem usually arises where a tenant posts the rent and the rent is not received by the due date.

The basic rule is that a debtor (including a tenant) must seek out his creditor (including a landlord) and is not regarded as having paid the rent until the remittance actually arrives in the landlord’s possession.

The mere fact that as a matter of course the tenant had paid by post does not , without more, indicate that the creditor has authorised use of the post such that the creditor takes the risk of non-delivery or that payment was deemed to have been made from the date of posting.  The authorities are examined in detail by Deputy President Macnamara in Happy Century Pty Ltd v Nezville Pty Ltd (2000) V ConvR 58-546.

 

 

My clerk can be contacted via this link for bookings  http://www.greenslist.com.au/

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What is the tenant to do if the landlord unreasonbly withholds consent to an assignment?

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Where a landlord refuses consent to an assignment of the term of the lease the tenant’s usual remedy is to seek a declaration that the landlord has unreasonably withheld consent.

Damages are not normally available because in the absence of clear words provisions requiring the landlord’s consent are construed as merely amounting to a qualification of the covenant not to assign. See: Bradbrook, Croft & Hay Commercial Tenancy Law, para 15.9.

Vickery J’s decision in Xiao  v Perpetual Trustee Company Limited & Anor [2008] VSC 41 poses real problems for tenants because at [21] he held that s.124(1) of the VCAT Act only empowered VCAT to grant a declaration instead of an order it could make or in addition to an order it could make. His Honour said:

“Given that Mr Xiao does not claim damages, in order to enliven the jurisdiction of VCAT to grant a declaration, he would have needed to claim, or demonstrate that he was entitled to claim, other relief, for example by way of a permanent injunction pursuant to s 123 of the VCAT Act, before a declaration could be granted.”

Because the tenant is not usually seeking other relief or not entitled to other relief what is it to do?

The same problem will arise if a tenant and landlord seek a declaration that moneys to be paid by a tenant are not key money (see s.23 of the Retail Leases Act 2003)

Parliament needs to clarify VCAT’s powers to grant declarations.

 

My clerk can be contacted via this link for bookings  http://www.greenslist.com.au/

 

 

Distress for rent

Section 12 of the Landlord and Tenant Act 1958 provided that distress for rent was abolished on13 August 1948.

 

Section 12 has been repealed.

 

The purpose of s.12 was not to abolish distress for rent but to make it clear that distress for rent had been abolished.

Practitioners should be aware that the repeal of s.12 does not revive a landlord’s right to engage in distress for rent.

 

 

My clerk can be contacted via this link for bookings  http://www.greenslist.com.au/

Tenant’s fixtures

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Section 28(2) of the Landlord and Tenant Act 1958 has been repealed. Section 28(2) provided that:

“If any tenant holding lands by virtue of any lease or agreement ….. at his own cost and expense erects any building either detached or otherwise or erects or puts in any building  fence engine machinery or fixtures for any purpose whatever (which are not erected or put in in pursuance of some obligation in that behalf) then, unless there is a provision to the contrary in the lease or agreement constituting the tenancy, all such buildings fences engines machinery or fixtures shall be the property of the tenant and shall be removable by him during his tenancy or during such further period of possession by him as he holds the premises ….”

Section 28(2) has been held to operate according to the plain meaning of its terms (Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 12 VR 351 at 369-370) : while the tenant remained in possession the affixed chattels continued to be the tenant’s property and be removable by the tenant during the tenancy or during such further period of possession by the tenant holding the premises and not afterwards.

Given its comprehensive judicial consideration it is unclear why Parliament decided to tamper with the section. What was s.28(2) now appears as s.154A of the Property Law Act 1958 as follows:
“(1)    A tenant who at his or her own cost or expense has installed fixtures on, or renovated, altered or added to, a rented premises owns those fixtures, renovations, alterations or additions and may remove them before the relevant agreement terminates or during any extended period of possession of the premises, but not afterwards.

(2)    A tenant who removes any fixtures, renovations, alterations or additions under subsection (1) must-
(a)    restore the premises to the condition they were in immediately before the installation, renovation, alteration or addition, fair wear and tear excepted; or
(b)    pay the landlord an amount equal to the reasonable cost of restoring the premises to that condition.

(3)    This section does not apply to the extent that-
(a)    the lease otherwise provides; or
(b)    the landlord and the tenant otherwise agree.”

The new provision is confusing:      what is the “relevant agreement” (sub-clause (1)); is it the lease or can it be some other agreement; in sub-clause 3(a) the term “lease” is used?

In sub-clause (2) it is not clear whether the tenant’s restoration obligations:
(a)    apply only to the area of the premises where “fixtures, renovations, alterations or additions” were removed; or
(b)    extend to the whole of the premises.

 

My clerk can be contacted via this link for bookings  http://www.greenslist.com.au/