Tenant contests bills at tribunal after finding loophole in seperate metering issue NSW

Has anyone had issues with tenants contesting bills, due to a dual occupancy they share not being separately metered?

I have a 3 bdr IP with an attached 1 bdr granny flat. Three adults in the main house on one lease and 1 adult in the granny flat on another lease. The house has one electricity meter and they share the power bills by dividing them per head. The head tenant has contacted fair trading NSW for some reason and has been advised that it is not lawful for me to claim power bills? The tenant is claiming back pay for 3 years of electricity totalling $2800. This cant be possible???? The rent was set at under market value and bills were not included. I have been advised that the tribunal favours tenants over landlords quite heavily. Does anyone have any advice or experience in these matters as i need to prepare for a hearing in march? Thanks guys

 

Have you had a look at the legislation?

 

I think the tenant is correct here... (sorry!) Unless the whole property (house and GF) is under one lease and then it’s up to the people on the lease to split it.

 

Yes, unfortunately the legislation is on the side of the tennant. If the property does not have a separately metered electricity connection; you have to include electricity as part of the rent as you cannot conclusively determine precisely what they used versus what the tenant in the other domicile used. The even splitting of bills per person is a system that works when all participants act in good faith, but unfortunately the law does state otherwise.

If you had worded the lease agreement to be inclusive of electricity, and charged the portionate amount more in rent inclusive of electricity, you'd be no further out of pocket overall. Perhaps chalk this down to a costly lesson learnt and going forward re-write lease agreements to package rent with electricty (and while you're at in, include internet too - there are so many low cost options ~$50/mth that would suffice).

 

Thanks for your reply, i had feared this outcome but acted in good faith that people would act fairly. Expensive lesson indeed.

 

I always wonder why we have to have so many different laws and rules in each state of Australia, given the relatively small size of each?

In WA these unmetered GFs would not be a problem providing the lease has a clause detailing how the split or calculation would be made.

There is so much waste and duplication between the states (laws, education curriculum, etc etc), why?

 

That's just how Australia was founded under our constitution. The commonwealth took pretty much the minimum of powers and the states wanted to keep the rest.

 

All of our states are much bigger than many countries.

There is an inherent degree of inequality of setting a % sharing arrangement rather than a user pays (metered) situation.

Even comes down to the smaller states saving their daylight over summer or the larger states getting more than their fair share in the distribution of gst.

 

An expensive lesson, but if you are going to self manage you MUST have a thorough understanding of all rental tenancy laws in the relevant state.

 

Here is the NSW legislation

RESIDENTIAL TENANCIES ACT 2010 - SECT 40 Payment of rates, taxes and certain utility charges by landlord

 

Metering is not always the same issue. Each account needs to be metered and read at same time. Not a submeter. Etc Heard of plenty who think they can submeter the main meter and it fails

 

Just price the cost of electricity into the rent. And the water, because you can't charge for that either.

 

The only thing you could try is to approach this person/head tenant and offer to reimburse them the portion of the Granny Flat use (being 25%, plus 5% for inconvenience ) to 30% of their bills to date and ongoing.

This if accepted would lower your overall cost while buying time to find a way to rectify the power issue.

Not sure what you mean by this......
Is the power supply in your name or one of the tenants ?

 

Wouldn't this mean cancelling both the current lease's and trying to get the tenants to agree to a new lease(s) with higher rent ?
Good luck with that, the tenants will likely want to stay under the current lease to the end, then move out, leaving the OP with two vacancies....
The OP will have to do the sums, but fighting the tenants will likely cost more !

 

Yes, the LL just needs to be aware of this when next leasing it out.