breach of contract
📖 What is breach of contract? Meaning and definition
When a landlord or tenant does not fulfil a duty they are legally required to perform under their tenancy agreement or the RTA, it is considered a breach of contract. This can range from failing to pay rent or water rates, to not including specific statements in the tenancy agreement, such as those related to Healthy Homes Standards or insulation details. The Tenancy Tribunal can address these breaches, and in some cases, may issue orders like conditional termination of a tenancy.
For certain breaches, especially those that can be fixed, the party who has been wronged must first give the other party a formal notice. This notice requires them to fix the problem within a specified timeframe, often at least 14 days. If the breach is not remedied within this period, the wronged party can then apply to the Tenancy Tribunal for a resolution.
The goal of the Tribunal in addressing a breach is often to return the wronged party to the position they would have been in had the breach not occurred. This might involve ordering the breaching party to pay for damages or costs incurred due to their failure to meet their obligations. However, the Tribunal also considers factors like betterment and depreciation to ensure the wronged party is not better or worse off than before the breach.
📋 Requirements
- An obligation under the tenancy agreement or the Residential Tenancies Act 1986 (RTA) has not been met.
- For breaches capable of remedy, a formal notice requiring the breach to be fixed within at least 14 days must have been served.
- The breach was not remedied within the required period after the notice was served.
- Evidence must be provided to the Tenancy Tribunal to prove the breach occurred.
📝 Procedure
- Identify the specific obligation that has been breached by the other party.
- If the breach is capable of remedy, serve a formal 14-day notice on the breaching party, requiring them to fix the breach.
- If the breach is not remedied within the notice period, apply to the Tenancy Tribunal.
- Provide necessary evidence to the Tribunal to support the claim of breach and any requested remedies, such as damages.
💡 Examples
- A tenant failing to pay their water usage charges, even after receiving two 14-day notices from the landlord, is a breach of their obligations.
- A landlord not including a statement about insulation in the tenancy agreement, as required by law, is a breach of their obligations under the RTA.
- A tenant causing damage to the property beyond normal wear and tear, leading to the landlord seeking payment for repairs, is a breach of their obligations.
- A landlord failing to include a statement in the tenancy agreement confirming compliance with healthy homes standards is a breach of their obligations.
📚 Legal basis
- Residential Tenancies Act 1986
❓ Frequently asked questions
What happens if a tenant doesn't pay their water rates?
If a tenant doesn't pay their water rates, which is an obligation, the landlord can serve a 14-day notice to remedy the breach. If the tenant still doesn't pay, the landlord can apply to the Tenancy Tribunal for a conditional termination order or to recover the arrears.
Can a landlord be in breach of contract?
Yes, a landlord can be in breach of contract. For example, if a landlord fails to include required statements about insulation or healthy homes standards in the tenancy agreement, they are breaching their obligations under the Residential Tenancies Act 1986.
What is a 'conditional termination order'?
A conditional termination order is a decision by the Tenancy Tribunal that allows a tenancy to end if a specific condition, usually remedying a breach like unpaid rent or water rates, is not met by a certain date. It gives the tenant one last chance to fix the situation.
How long do I have to fix a breach if I receive a notice?
If you receive a notice to remedy a breach, you typically have at least 14 days to fix the problem. The exact timeframe will be stated in the notice you receive from the other party.
What does it mean to be 'returned to the position they would have been in'?
This means that if a breach occurs, the Tenancy Tribunal aims to put the wronged party back in the financial or practical situation they would have been in if the breach had never happened. This might involve ordering payment for damages, but also considers factors like depreciation to ensure fairness.
Do I need a lawyer for a breach of contract claim at the Tenancy Tribunal?
While many self-represented litigants handle claims at the Tenancy Tribunal, complex breach of contract cases, especially those involving significant damages or intricate legal arguments, may benefit from the expertise of a qualified lawyer.