Rent crisis: Sydney tenant disputes $350 raise at NCAT

A young Sydney woman who has become the face of Australia’s housing crisis has revealed an “interesting” result after defying a whopping $1,400 a month rent hike earlier this year.

Shantel Schmidt, 32, who lives in Redfern in inner Sydney, has received notice that her rent will go up by a staggering $350 a week. in Februaryrising from $1,900 to $2,600 in two weeks “to bring rents in line with what the current market is looking for.”

Ms Schmidt went viral after posting about her predicament on TikTok and later appeared on Nine’s. Today show.

Subsequently, her landlord suggested $50 discount to $1,250 per week, which is still an increase of almost 32 percent from the previous rate of $950.

She and her housemate appealed the increase to the New South Wales Civil and Administrative Tribunal (NCAT), and sunday night Ms Schmidt said the tribunal rejected most of their claims, confirming a $1,250 bid going forward.

However, the court agreed that they were entitled to a “rent reduction” of $75 per week for the previous year due to defects in the house, which made them eligible for a refund of nearly $4,000.

“Three months later, this was the result of a rent increase challenge,” Ms Schmidt said in a video as she read out the tribunal’s rulings.

“Rent ordered not to exceed $875 per week from Feb 19, 2022 to Feb 18, 2023. Rent ordered not to exceed $1,250 per week effective April 16, 2023. until April 15, 2024.”

In addition to determining that the rent increase was “excessive”, they also demanded a 20 percent reduction in the previous year’s rent “due to the condition of the premises – mainly a crack in the wall and defective floorboards in the living room”. and “non-economic losses of $2,500 due to mold and pest infestation.”

They also sought reimbursement of certain out-of-pocket expenses and an order for the landlord to carry out repairs.

“The whole thing was contested by the landlord, though [the property manager] proposed to resolve this issue through an agreed more modest rent increase,” the decision reads.

The court noted that the “burden of proof” lies with the tenants, who must prove that the proposed rent increase was excessive.

“It is often difficult for tenants to establish inflated rents by referring to other properties in the area,” the decision says.

“The number of variables is so large, and the appeal of features so idiosyncratic, that comparing them can be elusive. Estimating market rent is an inexact science, and I am convinced by the evidence that the proper market rent under the current conditions is close to the asking price of $1,250 a week.”

The decision also stated that the for mold and pest infestation was “difficult for tenants”. “In order to succeed in this regard, it must be established that the mold was the fault of the landlord and caused a violation of the lease agreement,” the report says.

“This level of evidence was not in front of me. There have been years of unseasonably wet weather that has contributed to the growth of mold throughout Sydney. I have no doubt that this property is prone to wet conditions, but I could not be satisfied that it should be sufficiently at the feet of the landlord and that the lifestyle of the tenants was not a major factor.”

NCAT stated that the pest problem was similar.

“It seems cockroaches were the main culprit,” the post read.

“It was not sufficiently explained why this was the fault of the landlord. Every home in Australia has cockroaches. The applicant tenants have owned the premises for two years and it is difficult to see why the landlord is at fault.”

The tribunal also dismissed their claim for repairs, noting that the landlord had already fixed a number of problems with the roof and water intrusion.

In regards to the rent cut, “tenants testified to a long-standing problem with a crack in the wall that occasionally seeped in water and a faulty floorboard in the living room.” “Both of these items have been brought to the attention of the homeowner several times,” NCAT found, noting that it “tried to fix them but was unsuccessful in the long run.”

“I am satisfied that some reduction in rent is reasonable as these factors cause some reduction in comfort levels,” the decision says.

“Having done my best with the material in front of me, I have found that a $75 a week rent reduction for a maximum period of one year is appropriate. This would mean that tenants are eligible for a rent refund of around $3,900, which can be offset by cash or rent credit.”

Ms Schmidt commented only that the decision was “interesting”.

In a video last week after returning from her hearing, she said she “really wants this to end.” “I’m sure there will be an eviction notice, unfortunately that’s just how the system works,” she said.

It comes after a new report showed that Australian rental affordability is at its lowest level in almost a decade.

Housing Affordability ANZ CoreLogic report found that a middle-income household would need to spend 30.8 percent of their income on national rent, while lower income levels would require an “unmanageable” 51.6 percent.

And in March, an Anglicare snapshot found only four rental properties across the country that were available to one person. good applicantfrom over 45,000 listings.

“The rental market in Australia has seen a sharp decline in rental supply and vacancy for almost three years,” CoreLogic said in a report.

“In April 2023, CoreLogic observed 91,869 rental listings in the market, up from a recent high of 181,493 in May 2020. The total number of rental listings is 38.1% below the previous decade’s average of 148,259. The vacancy rate was 1.1% nationwide during the month, below the decade-long average of 3%.”

At the same time, the rental market in Australia experienced two major surges in demand.

“One of these was changes in internal migration patterns and housing preferences at the start of the pandemic, leading to strong rent growth in Australian regional and housing markets between early 2020 and late 2021,” CoreLogic said.

“Rent in metropolitan cities declined by around 6% as the closure of Australia’s borders to overseas migration sent a negative shock to rental demand. When restrictions on overseas travel to Australia were lifted, a “second wave” of demand came from a stronger-than-expected return to Australia. foreign arrivals“.

As a result, the report says, rent growth “is now more concentrated in metropolitan markets favored by overseas migrants, and in these capitals, unit rents tend to grow at higher rates.”

Mayi Azize, a spokeswoman for the All Homes lobbying group, said the findings showed the need for more investment in social and affordable housing.

“This report shows that average Australian households are experiencing housing stress – housing stress can push people towards homelessness and put pressure on the services they turn to for help,” Ms Azize said in a statement on Monday.

“While a record number of people are struggling, our social housing shortage has never been greater. We simply cannot end the housing crisis in Australia without more social housing. For the sake of the mental health, safety and financial security of the people, Australia cannot afford to continue to delay building more social housing.”

Ms Azize noted that Australia is already short of 640,000 social homes and that number will continue to grow. “It’s time for the federal government to invest heavily in social housing, building 25,000 of these homes every year,” she said.

Originally published as Sydney tenant Chantel Schmidt reports NCAT’s decision after challenging a $350-a-week rent increase.