If tenant is paying water, make sure that tenant is paying water

In property management (and everywhere else), actions speak louder than words.

This piece of advice is following a tribunal hearing my office had last week.
The property had been privately managed and the landlord inserted a written clause in the lease stating " tenant pays for water"
Apart from the clause not being written in correct legislation, there was no precedence for ever having charged the tenant water.

We took over the management in the last few months of the tenancy and conducted an outgoing inspection where we billed the tenant for the last quarter of water use based on a meter reading in the outgoing inspection report - this is just a routine procedure in property management.

The tenant refused to pay.

At the tribunal hearing, the tenant was able to successfully argue that she had never been charged for water usage and although she signed a lease stating that she would pay water usage, the fact that the landlord had never invoiced her was enough precedence that she did not have to pay.

The landlord told us and the tribunal member that she did charge the tenant at the beginning but was not able to produce any evidence of invoices.

The only invoices were our unpaid ones at the end of the tenancy when we took over.

Lesson here: Action speak louder than clauses in leases. If the tenant should be paying for water, ensure that they are charged water regularly and set a paper trial for chasing it up if it is in arrears.

 

Note that the legislation is different in each state - in NSW residential property agreements, if you don't charge the costs within 6 months you forfeit the opportunity to recoup those costs.

Generally, self-mangers won't have raised an invoice for these charges but sent a copy for reimbursement, so if there was proof of sending copies for reimbursement, the lessor would have had evidence.

 

In SA too if the tenant is not invoiced within 3 months then a landlord cannot recoup costs later.

Thats not the point here.

The landlord was unable to charge any further invoices at the end of the tenancy - even if tenant was invoiced on time, because they had set a precedence of not having charged any water invoices for the first 9 months of the tenancy.

They could have produced a bank statement showing that water was paid by the tenant but were unable to.

 

i don't think it matters whether a clause in a lease is written in correct or incorrect legislation.

 

so the landlord charged at the beginning but then stopped charging the tenant half way through? :s

 

That's what they claim but there was no evidence so the tenants claim of "I have never paid any water invoices for this property so I don't have to at end of lease" was considered.

If the landlord was able to provide any type of evidence that the tenant does indeed pay water then it would have been ruled in landlords favour - they could not.

In this business you almost have to assume every tenant is a scammer and will weasel themselves out of their obligations where they could. Evidence needs to be kept to protect landlords at all times.

 

I can't see a proper legal basis for the tenant getting out of paying the water - so I'm not sure how the tribunal legally reasoned that decision.

 

Although there may be a precedent of the lessor not passing on the cost of water consumption it doesn't override the intent of the clause indicating that water consumption could be charged. The cost of taking the judgment to a higher court would far outweigh the actual usage charges.

 

so the bank transfer for the water amount at the beginning was not enough to use at tribunal? they wanted a actual invoice?

 

There was NO bank transfer, there was no evidence of the tenant ever having been charged for water - that was the problem.

There was only the landlord verbally telling the tribunal that they paid water at the beginning but could not provide any evidence

 

The charges were around $500 for the time calculated when we were managing it. They cannot charge the earlier ones.

I also assumed that if a tenant signed a lease with a clause stating they would pay for water then they would have to pay for water. We invoices tenant based on the clause.

Tenants claim was that they had a verbal agreement with landlord later that they do not pay for water evidenced by the fact that they never have.

 

Did your office not hold a copy of the lease? How do you manage a property if you don't have the agreement? Do you have a copy of the agency agreement?

Why did the owner not use the standard (Fair Trading/Consumer Affairs etc) lease? Does this not have the clause (in NSW this is a standard clause and applies if the tenancy is separately metered and has flow restrictors etc).

 

Off course we have a copy of the lease an an agency agreement.

What does this have to do with anything??

 

It is actually 3 months of the bill issue date.

 

Jack the rent up to cover water usage.

 

I am not a lawyer, but under the circumstances
I think the precedent has been set by not having documented records of payment.

 

Here in Queensland, Owners are "allowed to pass on the full water consumption charges (including bulk water charges) to tenants provided all the minimum criteria have been met.

• the rental premises are individually metered
• the rental premises are water efficient
• the tenancy agreement states the tenant must pay for water consumption."

Full details here: Water charging fact sheet | Residential Tenancies Authority

 

Had this happen on a property I bought few years back.

Property was being managed by PM and all was going swimmingly until end of year financial report. Where I found that I had been paying for all the water. $2.5k water charges for that year.

Going rate should be approx $300 a quarter. So it wasn't huge money but I was still giving away 2-3 weeks rent a year for no good reason.

 

I send letters with a copy of the water bill attached.... would the electronic copy of these be considered evidence.?
Lucky I have never had an issue