NSW

[renewell]

HI,
I am trying to find out how to challenge an interpretation by the Landlord, of a Settlement Agreement regarding rent rises in a Residential Land Lease Community. The Agreement was set down by the Strata Mediation, Customer Services of NSW Department of Fair Trading. This Agreement, signed by the then Owners of the Community in 2018, states that there are maintenance items which needed to be attended to prior to any increase in rent, over a 3 year period, and that the maintenance item for the year of 2019 is that security fencing be installed to the perimeter of the Community land. This item was not completed in 2019, and is still not complete, and no rent rise was claimed in the 2019 period, but now that we are in the 2020 period, with no specific maintenance items listed to be completed in this year, the Owners are claiming a rent increase due to the fact that there are no specified items listed in the Agreement for the 2020 year to be completed prior to a site fee increase, although the maintenance item listed for completion in the 2019 year has still not been completed. Their interpretation of a clause in the Settlement Agreement, which states: "Each year's site fee increase will be contingent on the agreed maintenance being completed prior to the increase" is that because there was no maintenance item stipulated for the 2020 year's site fee increase, they do not need to complete the previous year's maintenance item in order to claim a site fee increase in the year of 2020, which they have now done. How do I challenge this interpretation of the Agreement's wording, as residents here do not believe that we should be charged the site fee increase until the previous year's maintenance item has been completed?

 

[Rob Legat - SBPL]

I think your interpretation is incorrect, barring anything relevant in the redacted terms of settlement. The ambit of the settlement as I see it is that the rent is to increase by 4% per annum. There are individual conditions precedent noted in each year, not ‘overall’ - i.e. the 2019 increase is dependent ofn the fencing, the 2020 increase is not dependent on anything. So long as they’re not also claiming the 2019 increase as well, unless they have completed the necessary works.

Of course, that doesn’t take into account any potential ramifications from COVID-19 with respect to lease reviews. That would take a detailed consideration of the temporary legislation brought in, whether it applies to your type of lease, and then what the interaction is with the terms of settlement you have (if any).

 

[renewell]

HI,
I am trying to find out how to challenge an interpretation by the Landlord, of a Settlement Agreement regarding rent rises in a Residential Land Lease Community. The Agreement was set down by the Strata Mediation, Customer Services of NSW Department of Fair Trading. This Agreement, signed by the then Owners of the Community in 2018, states that there are maintenance items which needed to be attended to prior to any increase in rent, over a 3 year period, and that the maintenance item for the year of 2019 is that security fencing be installed to the perimeter of the Community land. This item was not completed in 2019, and is still not complete, and no rent rise was claimed in the 2019 period, but now that we are in the 2020 period, with no specific maintenance items listed to be completed in this year, the Owners are claiming a rent increase due to the fact that there are no specified items listed in the Agreement for the 2020 year to be completed prior to a site fee increase, although the maintenance item listed for completion in the 2019 year has still not been completed. Their interpretation of a clause in the Settlement Agreement, which states: "Each year's site fee increase will be contingent on the agreed maintenance being completed prior to the increase" is that because there was no maintenance item stipulated for the 2020 year's site fee increase, they do not need to complete the previous year's maintenance item in order to claim a site fee increase in the year of 2020, which they have now done. How do I challenge this interpretation of the Agreement's wording, as residents here do not believe that we should be charged the site fee increase until the previous year's maintenance item has been completed?

Thank you, Rod, for replying to my query. I had always wondered if the Agreement had been worded correctly, and as you have stated, the way it is worded upholds their assumption that an increase can be charged even though they haven't done what they agreed to do for the previous increase last year, but were not able to claim it then. So the people who brokered this Agreement in 2018 obviously did not do their job properly, as I think that their objective was that each year's increase should be contingent on all previous year's maintenance being completed, but that is not what was said. I, myself, feel that this year's increase is probably justified, since there was no increase last year, so effectively over the 3 year period, they have only increased the rent on two occasions, as they missed fulfilling the requirements for last year's increase. The residents just do not feel that any increase is justified as the Owners have cut back on our services and facilities over the last 2 years, but this has nothing to do with the actual Agreement which was signed, and is a whole new ball game for the future rent rises. We have a hearing with NCAT next week, so I can at least know what the correct stance on this Agreement should be. Thank you again for clarifying this specific enquiry, as it is good to get a proper legal perspective on this matter. Cheers, Ruth