July 2018                                                 

Agency Policy

Presenting at NCAT (NSW Civil and Administrative Tribunal)

Background: 

Property Provider's vision is to, “Help People Live Better” through being Sydney’s most flexible residential rental company.  This vision is driven by 3 core values; Passion, Performance and Profit.  Importantly, we seek profit not through dollars and cents but through the pursuit of our guiding principal that all successful long-term partnerships have a foundation of mutual investment, respect, risk and commitment.  We aim to create these virtues in all our relationships and touch points with long-term leasing tenants, short-term rental guests, employees, suppliers, partners and our property owner partners.

Document Purpose: 

The purpose of this document is to clearly communicate the company’s policy as it relates to how to most effectively manage and navigate tenant & owner disputes particularly regarding NCAT application and action.

Policy Objectives

  1. To be clear, concise and consistent regarding disputes that are or likely to be escalated to NCAT.

  2. To minimise costs (i.e. time, money and other resources) to all parties involved in the dispute by leveraging our direct experiences and encouraging owners to purchase appropriate landlord insurance.

  3. To resolve disputes as quickly, effectively and in a manner that is as reasonable and mutually equitable to all parties.

  4. To share accountability and responsibility in a balanced way.

Policy:  NCAT & Tribunal Applications & Attendance

To fulfil our fiduciary duty, Property Provider’s will engage in the dispute resolution process at NCAT on the basis that an owner or tenant claim/application for compensation exceeds $2500 and where at least 2 direct proposals between the tenant/owner have been rejected.

Policy Rationale:

Before providing a reason for the policy it is important to illustrate a couple “Fast Facts”:

  • NCAT is not a court, it is a tribunal.  It’s powers and authority are limited far more than people assume.

  • The person residing over the dispute is referred to as “A Member” they are NOT a magistrate or a judge and hence their powers are limited.

  • Like any legal or adjudicated process there is an element of risk of things not going your particular way.  Just because an applicant feels that they have been mistreated or not respected doesn’t necessarily equate to the NCAT Member taking this position.

  • Neither the applicant or the respondent is permitted to appoint a solicitor to represent them.  The purpose of this is to try and attain resolution quickly directly with the parties involved (but this is often not the case).

  • NCAT facilitates the Property, Land Stock and Agent Act 2002.  This legislation favours the interests and rights of a tenant vs the property owner or agency.

  • Disputes are seldom resolved in a single date/session.  The default position of the Member will be to instruct the applicant/respondent to participate in a supervised and facilitated mediation.  If the matter is not resolved independently between the parties within this mediation the Matter may be decided by the Member.  More likely though is another date to hear/decide on the matter will be scheduled (usually months later not weeks).  The protracted nature of this dispute resolution process is that it ultimately consumes significant additional resources than anticipated.

  • Neither the applicant or the respondent can include reimbursement of representation costs at NCAT.  When making an application, the applicant does so at their own cost and risk and costs are sunk when doing so.

  • Most applications that are presented at NCAT are financially insignificant and menial.  In frank terms, the dispute/application arises because of personality differences whereby one or more parties adopt an emotionally ridged, uncollaborative and inflexible attitude.  NCAT Members quickly recognise this and often feel that these applications are a waist of their time.  Therefore, they can tend to make quick unpredictable decisions which are often based on technicalities. 

  • Very rarely is the application by applicant/responded awarded in full the reality is that often judgment is a small fraction of what compensation or action that is being sought.

  • A formulaic methodology is usually adopted by the member which are not, “black and white” but rather many shades of grey.  The result is a significant dilution/decrease in the value of the claim.  This outcome (assuming the applicant wins and that it is not a total loss) is usually less than the costs and resources required to facilitate it.  This is of course unless there is overwhelmingly strong written evidence to support the application.

  • An NCAT tribunal application needs to be concise, clear, reasonable and “fact and evidenced based” It is our position that, the applicant should seriously consider what they are requesting while simultaneously considering what the worst-case scenario may be.  Members do not like their time waisted and the can side with the respondent.  See attached working example on last page of this document.

Conflict Resolution and Associated Costs:

  • Property Providers has elected $2500 as the min value that we will attend tribunal on behalf of an owner as we feel that it is not commercial to pursue amounts less than this as the costs will negate generally negate an acceptable ROI.

  • Prior to considering an owner’s request for an application to NCAT, Property Providers must be of the position that the owner has been reasonable and flexible in trying to reach a win-win outcome.  In this regard, our expectation is that the owner should have put forth or considered at least 2 proposals and that a senior member of our staff has been involved in the negotiation.

  • If an owner insists the agency submit an application, it is understood that there is at the very least 3-4 hours required to prepare and submit the application.  Property Providers hourly rate for NCAT matters is $220 per hour with min 4-hour call.  Time will be charged thereafter in 30 min intervals along with hard costs.  Importantly Travel time (if required) will also be included.  Prior to taking action, Property Providers requires estimates/invoices to be paid in advance.

  • If an owner elects to lodge and application themselves, Property Providers will certainly provide the property file and any information that we possess as it relates to the tenancy/property.   For our professional advice and recommendations on the NCAT process our fees also apply.

Summary and Agency Position:

At stated above, our guiding principal is that all successful long-term partnerships have a foundation of mutual investment, respect, risk and commitment.   We seek to pursue only win-win relationships and outcomes.  In this regard, our br

oad position is that applications to NCAT can be easily avoided through resolving issues quickly (vs frustration being created through protracted situations) and by encouraging all parties to be reasonable and flexible.

 

Working Example:  Damaged Carpet and Marks on Walls

Background & Situation: 

Sally is a property owner/landlord who is upset because her tenant Robert has moved out and has stained the carpet and put marks on the walls.  She wants Robert to replace the carpet and repaint a room that is particularly bad.  The agency has discussed the matter with Robert a proposal has been put forth that $1000 should/could be deducted from Roberts bond to cover this damage & fair wear.  An agreement has not been able to be reached and Sally has insisted that the agency submit an application to NCAT requesting $5000 replacement compensation.

Actions: 

The agency as invested 4 hours completing the application and submitting it to NCAT for consideration at an initial cost of $880 + application fees ($55).

A date to hear the matter is established 2 months later.  The agency travels to NCAT and is required to be there for a 4-hour session.  Arriving at 8:30 am the matter is not heard until 12 pm.  Unfortunately, the tenant/respondent has not turned up so the matter is adjourned to a later date.  The agency raises an invoice to Sally for an additional $900 for the 4 hours (including travel time and hard costs).  The second date is established, and the tenant/respondent is in attendance this time.  The, “Member”, reviews the summary of the matter and instructs the parties to mediation where the parties cannot reach and agreement.  They expect an immediate decision by the member however the day has run out of time so yet another date is set.  The agency raises another invoice for $900.  On the 3rd date the matter is actually heard and decided on.

Judgement: 

Because the agency has drafted a detailed application with supporting evidence the member considers the application seriously.  The member reviews the materials (including receipts) and sees that the carpet was purchased and installed 5 years old for $3000.  The property was also freshly painted at this time at a cost of $2000.  The member decides that the marks on the carpet/walls is in fact damage and not “fear wear and tear”.  The member makes the following decision:

Judgment is in favour of the application/sally

 “Both the carpet and the paint depreciate at 15% per year. Assuming this depreciation rate, the paint and carpets current value is $1250 (i.e. they have depreciated by 75%). This is calculated at the original cost of $5000 value x 25% remaining value

End Result: 

In this case, approximately 4 days has been consumed at a cost of to Sally at $3000 (i.e. 3 ½ days including travel and hard costs) to achieve $1250 in compensation.    

Effective Date:

This policy is effective July 1st 2019