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Tenants beware of seemingly minor breaches

A recent Sydney Morning Herald article highlights the dangers faced by tenants by seemingly innocuous and unintended delay. The article (http://www.smh.com.au/nsw/bar-baron-justin-hemmes-faces-eviction-from-coogee-pavilion-20150510-ggyahg.html)  focuses on an experienced and commercially aware tenant having an option to purchase the premises from his landlord for  $37m. The option was to be realised within 2 years with the tenant continuing to pay rent in the interim.

Unfortunately for the tenant, according to the article, he was late in paying rent for a particular period by 2 days and in addition conducted works which were allegedly not authorised by the landlord. The landlord issued a notice of termination to evict the tenant and presumably terminate the option right the tenant had to buy the premises.

This is a cautionary tale for tenants. Putting aside the option agreement and the tenant’s right therein to call the option and by the premises, tenants should be very mindful of their rights and obligations at law to their landlords.

The first and foremost caution is as a tenant, you should always be punctual in paying your rent. If it is an option between paying 1 week early or 1 week late, pay early. Why? For most breaches of rent a landlord is required to give a tenant a notice of the breach and reasonable time to remedy the breach pursuant to s129 of the Conveyancing Act 1919. No such notice is required for the non payment of rent.

Of course there may be other equitable considerations such as redemption but Technically, a landlord may lock out a tenant for being late in rent by 1 day.