Policy: Presenting at NCAT
(NSW Civil and Administrative Tribunal)
Property Providers’ vision is to “Help People Live Better” by being Sydney’s most flexible residential rental company. This vision is driven by three core values; Passion, Performance and Profit. Importantly, we seek profit not through dollars and cents, but through the pursuit of our guiding principle 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.
The purpose of this document is to clearly communicate the company’s policy as it relates to how to effectively manage and navigate tenant and owner disputes, particularly regarding NCAT application and action.
- To be clear, concise and consistent regarding disputes that are or likely to be escalated to NCAT.
- To minimize costs (i.e. time, money and other resources) to all parties involved in the dispute by leveraging our direct experiences.
- To resolve disputes as quickly, effectively and in a manner that is as reasonable and mutually equitable to all parties.
- To share accountability and responsibility in a balanced way.
Policy Objectives: NCAT & Tribunal Applications & Attendance
To fulfill our fiduciary duty, Property Providers 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 two direct proposals between the tenant/owner have been rejected.
- Before providing a reason for the policy, it is important to illustrate some facts:
- NCAT is not a court, it is a tribunal. Its powers and authority is limited far more than people assume.
- The person presiding over the dispute is referred to as “A Member.” They are NOT a magistrate or a judge and hence their powers are limited.
- Neither the applicant nor the respondent is permitted to appoint a solicitor to represent them. The purpose of this is to try and attain resolution quickly and directly with the parties involved (but this is often not the case).
- NCAT facilitates the Land Stock and Agent Act. This legislation favours the interests and rights of a tenant versus 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, there will be another date to hear/decide on the matter and it will be scheduled (usually later not weeks). The protracted nature of this dispute-resolution process is that it ultimately consumes significantly more resources than anticipated.
- Neither the applicant nor the respondent can include reimbursement of representation costs at NCAT. When making an application, the applicant does so at their own cost and risk.
- 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, uncooperative and inflexible attitude. NCAT members quickly recognize this and often feel that these applications are a waste 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 and 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 is 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 wasted and they can side with the respondent. See attached working example on the last page of this document.
Conflict Resolution and Associated Costs:
- 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 two proposals and that a senior member of our staff has been involved in the negotiation.
- If an owner insists the agency apply, it is understood that there are at the very least four hours required to prepare and submit the application. Property Providers’ hourly rate for NCAT matters is $220 per hour with a minimum of a four-hour charge. The minimum initial commitment is therefore four hours and is to be paid upfront and before action is taken. Time will be charged thereafter in 30-minute intervals along with hard costs including but not limited to (application fees, travel costs, public transport or taxis, parking, sheriff’s fees, garnishee orders, postage/courier). Importantly, travel time will also be included. Before taking action, Property Providers require estimates/invoices to be paid in advance.
- If an owner elects to apply 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 principle 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 broad position is that applications to NCAT can be easily avoided through resolving issues quickly (versus 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 and a proposal has been put forth that $1000 should/could be deducted from Robert’s bond to cover this damage with fair wear and tear considered. 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.
The agency had invested four 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 two months later. The agency travels to NCAT and is required to be there for a four-hour session. Arriving at 8:30 am the matter is not heard until 12:00 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 four 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 when the parties cannot reach an 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 third date the matter is actually heard and decided on.
Because the agency has drafted a detailed application with supporting evidence, the member considered the application seriously. The members review the materials (including receipts) and sees that the carpet was purchased and installed five years ago 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 “fair 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 carpet’s 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.”
In this case, approximately four days has been consumed costing Sally $3000 (i.e. 3 ½ days including travel and hard costs) to achieve $1250 in compensation.