SINGAPORE – A water seepage between two apartments escalated into a rental drama when the owners of the affected unit demanded over $150,000 in compensation for losing a tenant due to the leak.
The owners of a condo unit accused their neighbours above of failing to fix the problem, which in turn drove their new tenant away as the leak affected the master bedroom’s en suite bathroom.
While the upstairs neighbours were willing to rectify the fault, they were prevented from doing so because the owners downstairs denied them entry, saying they would plug the leak from their unit.
So it came as a surprise later when the owners of the downstairs unit pursued their case at the Strata Titles Board, claiming $150,000 in compensation.
This amount was derived mostly from their loss of rental income over five years because the first tenant who terminated the lease due to the leak would have paid more than the later tenant.
The owners even called a contractor who helped them fix the leak as their expert witness at the hearing, to point the finger at the neighbours for not resolving the problem properly.
But they lost their claim for the rent compensation on a legal technicality – they had not paid to stamp the tenancy agreements, which rendered the contracts inadmissible as evidence.
Moreover, they did not call the original tenant to testify that the leakage was the reason he ended his five-year lease.
The Strata Board also found that the upstairs neighbours were not at fault for the rental loss because their workers had not been permitted to enter the unit downstairs to fix the problem.
But since they had agreed to pay for the repairs, the board ruled that they should pay $10,000 as compensation for water damage.
The owners downstairs were unhappy with the ruling and appealed to the High Court, this time armed with a statement from the original tenant as well as the stamped copy of the second tenancy agreement.
This was when the plot thickened, because it was revealed that the original tenant was none other than the owner’s expert witness and contractor who helped fix the leak.
The owners upstairs naturally cried foul and accused the neighbours of deliberately hiding this fact because questions could have been raised on why the tenant chose to terminate the lease when he was the one who helped his landlord fix the leak.
They claimed that redacting the contractor’s name from various tenancy documents was intended to give the impression that the tenant was a different person.
For instance, the owners downstairs said: “We instructed (the contractor) to have a pail placed in the inter-floor area above the false ceiling, and three days later, water was discovered in the pail. The original new tenant discovered that the leak had not been resolved and… exercised his right to terminate the tenancy agreement.”
This led High Court Judge Christopher Tan to note that it was “unacceptable” that these owners’ lawyer also failed to make the matters clearer: “Counsel owes a duty to the court to paint the full picture, particularly where depicting only part of the landscape engenders a misleading impression.”
The owners downstairs claimed that the tenant’s name was redacted “for personal data protection purposes and not for any sinister end”.
They also argued that scrutiny of the signature on the contractor’s company cheque used to pay the rental deposit and the signature on the rental agreement would show that the same person signed both documents.
But Judge Tan found the argument to be unconvincing because both the documents did not show the name, and it would be unreasonable to expect anyone to “engage in the exercise of matching signatures across different documents”.
He added that such information should have been presented during the Strata Titles Board hearing, noting that the owners failed to show why it should be considered at such a late stage before an appeals court.
Even if the fresh evidence was accepted, the judge ruled, the case would still be dismissed because he saw no reason to disagree with the board’s finding that the neighbours upstairs were prevented from fixing the leak.
“The claimants must live with the consequences of their decision to bar the defendants from entering their unit to conduct repairs,” he said.
This case has two important lessons for home owners.
Neighbours need to cooperate to fix the problem
When a leak springs in an apartment ceiling, it is the responsibility of the owner of the unit above to plug the hole.
Both sides need to work together to fix the problem because it can often be difficult to find the source of a leak without tracing it from the damage caused to the lower unit.
In many cases, a quick response could well prevent further damage to other parts of the affected unit.
In this case, the owners of the damaged unit told their neighbours that they would handle their own repairs. They had five weeks to carry out the work as their tenant had gone on an overseas trip.
Despite this, they did nothing and also refused to let their neighbours into the unit to fix the leak.
So the board was justified in ruling that the neighbours were not responsible for causing the tenant to break the lease due to the leak.
The owners argued that they had relied on their neighbours to fix the leak as their intention was to repair only the false ceiling of their unit, which was merely cosmetic work.
But the court found that their e-mail to their neighbours upstairs showed otherwise: “There is really no need for your contractor to work from my unit to waterproof your toilet. I will have my own contractor to fix my toilet ceiling.”
It does not pay to avoid stamp duty
If you are renting out your apartment for four years and the total rent to be collected is $200,000, you need to pay only 0.4 per cent, or $800, to get the lease stamped.
It is a small price to pay to protect your interests as a court will not admit an unstamped tenancy agreement if a dispute arises.
Even if you are the tenant, you should insist that your landlord gets the agreement stamped so that your interests are protected by law.
In this case, the owners had an uphill task trying to recover the loss of rent because both the first and the second tenancy agreements were not stamped.
As the rent for the first lease of five years that was terminated was $6,000 a month and the subsequent rent was $5,500 a month for four years, their intent was to recover the difference, or $96,000 over the full five years.
Although the second agreement was subsequently stamped, it would serve little purpose if the first agreement was deemed invalid for comparison.
Moreover the disparity in rental income was no longer an issue after the court found that the neighbours were not responsible for causing the tenant to break the contract.
The lesson here is simply this – home-related defects can be a real pain and it pays for all owners to work together to repair them promptly and avoid prolonging the agony for everyone.
“Source:[How a water leak became a $150k tenancy fight for two condo owners] © Singapore Press Holdings Limited. Permission required for reproduction”
