RAISING RENT DECEIT
Shopping centre landlord’s misleading behaviour
How often does a leasing representative pressure a tenant by emphasising how good a deal is, when there may be no basis for that belief?
In a recent case, the landlord of a shopping centre who doubled a shop tenant’s rent to $90,000 was found guilty of both unconscionable conduct and misleading and deceptive conduct.
In a case pursued by the Australian Competition and Consumer Commission, the landlord’s agent was also found to be knowingly involved in the landlord’s contravention of the Trade Practices Act.
The tenant, in fear of the landlord, had initially signed a lease for more than double the previous rent over the Christmas holiday period while she was unable to contact a solicitor.
Initially, she hadn’t sought further legal advice because she thought there was no point once the lease was signed. When the tenant did go to a lawyer at the end of March, the new lawyer wrote to the landlord stating “my client disputes the new rental on the grounds that such a huge increase is not reasonable and by any means rather excessive”.
The lawyer recommended a valuation be sought and suggested the tenant pay the old rent pending the market determination. The landlord then threatened to evict the tenant if she did not pay the new rent at short notice.
The court found that the landlord’s conduct was unconscionable. Not only did the landlord engage in misleading and deceptive conduct by stating that the rent ‘was very reasonable and below market rent’ when it was not, but these misrepresentations were conveyed to a tenant whom the landlord was aware knew little or no English. Also, they were intended to secure renewal of the lease at a rental for which there was no basis beyond the landlord’s decision to seek the stated amount, and provided very short time frames to respond.
The court ordered the landlord to refund $65,000 plus interest of $55,000 to the tenant, and to pay costs as well as establish a trade practices compliance and training program to be monitored by the Australian Competition and Consumer Commission.