Communication and Transparency is Key

If you are a mortgagee, or acting for one, it is likely you will encounter a situation where the mortgagee is entitled to possession of, and to sell, a rented premises under a mortgage which was entered into before the tenancy agreement. If you find yourself in this scenario you must first issue a notice vacate pursuant to section 268(1) of the Residential Tenancies Act 1997 (Vic) (RTA).

With Parliament’s focus on making renting fairer, it appears that the Courts and Tribunals are also following this lead. In a recent Supreme Court of Victoria case[1], the Honourable Associate Justice Daly considered the principles in Smith v Director of Housing[2], specifically the mandatory requirement for specifying the reason or reasons for giving a notice to vacate.

Smith v Director of Housing[3],

Smith concerned a notice issued pursuant to section 244 of the RTA, which entitles a landlord to issue a notice to vacate where the tenant or tenant’s visitor, by act or omission, endangers the safety of occupiers of neighbouring premises (‘danger notices’).

Smith makes it clear it is insufficient to simply restate the statutory provision of the RTA relied upon by a landlord to issue a notice to vacate and that the landlord’s obligation to inform the tenant of the basis for termination is guided by the rationale that tenants should have the opportunity to respond to any relevant allegations. However, what was not clear in Smith and decisions handed down by the Victorian Civil and Administrative Tribunal post Smith was whether the principles were limited only to ‘danger notices’ which alleged fault on the part of the tenant.

Jafarpourasr v Tancevski[4]

Daly AsJ held that the principles in Smith extends beyond ‘danger notices’, to any notice to vacate for which reasons are required to be provided under s 319(d) of the RTA.

The question then before the Court on this issue was, to what level of particularity ought a notice to vacate descend in order for a Court to be satisfied that a landlord had sufficiently informed a tenant of his or her reasons for re-possession of the property?

When handing down her judgment, Daly AsJ provided some guidelines (non-exhaustive) for the degree of detail required to be included in a notice to vacate:

1. the length of the notice period: the shorter the notice period, the more detail is required;
2. the nature of the reasons advanced in the notice, with greater detail required where some misconduct is alleged, or where an alleged breach is capable of being remedied by the tenant; and
3. in cases where there might be a genuine debate whether there is a need to vacate the relevant property, such as where repairs and/or renovations are planned, more detail would be required.

Key take out

While reasons must always be included in a notice to vacate, save where specifically exempted by the RTA, the degree of particularity required in a notice to vacate must be somewhat dependent upon the reasons for issuing the notice to vacate and the circumstances in which it was issued.

[1] Jafarpourasr v Tancevski [2018] VSC 497.
[2] [2005] VSC 46.
[3] [2005] VSC 46.
[4] [2018] VSC 497

Authored by:
Sonia Apikian, Partner
Sarah Rogers, Lawyer