Note: For compensation issues in the context of family violence, see also Family Violence Provisions.
For renters, the main sections of the Residential Tenancies Act 1997 (Vic) (RTA) relating to compensation are ss 209, 209AA, 209AAB and 210. The differences between these sections depend on the following:
This table shows the various situations in which the different sections of the RTA apply:
|Tenancy status||Compensation issue||RTA section|
|Ongoing||Breach of duty provision*||Section 209|
|Ongoing||Breach of residential rental agreement of greater than 5 years||Section 209AA|
|Ongoing||Renter has arranged for urgent repairs||Section 209AAB(1)|
|Ongoing||Loss or damage caused by discrimination||Section 210AA(1)(a)|
|Ended (unless there is no breach of duty provision involved)*||Breach of residential rental agreement
Breach of RTA (other than duty provisions)*
*See Compliance Procedures for an explanation of what constitutes a duty provision
There is no automatic right to representation at the Tribunal in the applications outlined on this page. Accordingly, leave will be required under s 62(1)(c) Victorian Civil and Administrative Tribunal Act 1998 (Vic) for the applicant to be represented if the other party does not consent or is not represented by a professional advocate. See further Where do I go? What do I say?.
In most cases where the tenancy is still on foot, the renter or residential rental provider will be claiming compensation for a failure of the residential rental provider to comply with duty provisions under the RTA.
The renter also owes the residential rental provider duties that can be the subject of a compensation application. Some of the main duty provisions applicable to renters are:
For a complete list of duty provisions see Compliance Procedures.
Where a duty provision is breached, a renter (or residential rental provider, as the case may be) may give a breach of duty notice (breach notice) under s 208 requiring the other party to comply with the duty and/or pay compensation. Where the breach notice requests compliance with the duty instead of, or in addition to, compensation see Compliance Procedures.
If the residential rental agreement is ongoing, a renter must issue a breach notice in order to claim compensation as a result of the failure of the residential rental provider to comply with a duty under the RTA. Despite this, the Tribunal has been known to order compensation in addition to non-urgent repairs orders without a breach notice in some circumstances.
A breach notice is an essential component of compliance procedures and for most compensation applications. A breach notice must:
The breach notice must also specify what may occur if the notice is not complied with (i.e. application for a compliance order or a notice to vacate).
If the breach duty is not complied with, the person who have it can then apply for a compensation order under s 209. The breach notice should be included in the application.
The renter must prove on the balance of probabilities that there has been a breach of duty and that they have suffered loss as a result of this breach of duty. See below ‘What evidence is required for a compensation application?’
Special compensation rules apply for parties to fixed term residential rental agreements with a term of more than five years. Under s 209AA, a party to such an agreement can apply to the Tribunal for compensation if the other party has breached a term of the agreement.
This avenue for compensation only applies if the term that was breached is from the prescribed standard form tenancy agreement under s 26. It does not apply if the term breached was one otherwise added by the parties under s 27A (see s 209AA(2)).
Section 209AAB(1) allows for a renter to apply to a Tribunal for a compensation or compliance order if:
The Tribunal can make an order for compensation under s 212(1B) if satisfied of the above.
Rooming house and caravan park residents and Part 4A site tenants have an equivalent right under s 209AAB(2)-(4).
Under s 210AA(1)(a), a renter can apply to the Tribunal for compensation for loss or damage suffered because the residential rental provider or their agent contravened:
Rooming house and caravan park residents and Part 4A site tenants have equivalent rights under s 210AA(1)(b)-(c). Note however there is no equivalent right to apply for compensation on the basis of unreasonably withholding consent to assignment or sub-lets for rooming house and caravan park residents.
A renter, resident or site renter must not apply under the provision if they have already brought a dispute under Part 8 of the EOA (s 210AA(2)).
If a tenancy has ended, or the residential rental provider has breached a part of the RTA that is not a duty provision, then the renter may apply for compensation under s 210.
If the residential rental agreement has ended, it is beneficial if the renter issued a breach notice during the term of the in order to claim compensation as a result of the failure of the residential rental provider to comply with a duty under the RTA. If a renter has not issued a breach notice, they can still rely on other documentary evidence (such as a letter, email/maintenance request form) in which the residential rental provider was advised of the compensation issue. While the renter may also provide oral evidence that they advised the residential rental provider of the compensation issue, this will be less persuasive and we recommend that renters, where appropriate, issue breach notices or correspond in writing.
Example: Cassandra moved out of her Director of Housing premises as a result of an infestation of cockroaches and serious plumbing problems. Prior to moving out of the premises Cassandra had repeatedly called the service centre and complained about the insects in her flat and the plumbing issues. She did not issue a breach notice because she assumed her calls to the service centre were sufficient. As the residential rental agreement had ended she made a claim under s 210 of the RTA for compensation from the residential rental provider.
Answer: In this case Cassandra made a claim under the correct section of the RTA but may have difficulties with her claim because she had not issued a breach notice. Section 210 of the RTA does not explicitly require a breach notice but practically the Tribunal will generally require proof a residential rental provider was aware of a repair issue. The renter is a stronger position if they can produce documentary evidence demonstrating that the residential rental provider had been told about the repair issue. For example, Cassandra may have written a letter or email. Alternatively, it may be a good idea to issue a Freedom of Information (FOI) request of the residential rental provider to see whether there are any notes on file if the residential rental provider is covered by the FOI regime (see Obtaining information from the Director of Housing for more information)
There are three main types of evidence required in compensation applications:
Where renters are claiming compensation they will need to prove their loss (i.e. quotes, invoices) to the Tribunal. Where renters are unable to prove their loss, they may attempt to argue that the actions of the residential rental provider caused a ‘reduction of amenity’ (which may be calculated as a percentage of the rent). It will be helpful to show calculations of lost amenity – for example, show the number of days from notification (of the repair issue) until the date of repair multiplied by a percentage of the daily rent. It is possible to claim both reduction of amenity and financial loss.
This evidence might be provided by photographs, film, witnesses or evidence of the renter.
As a general rule, the Tribunal will only award compensation for direct loss or damage and not for pain and suffering or physical injury (s 447(2)).
In addition to claiming direct financial loss/damage it is generally worthwhile advising clients to think about claiming compensation for the ‘loss of amenity’ of their premises. This is particularly important for renters who may face difficulty proving their loss because while they can be significantly inconvenienced and disadvantaged by the actions of the residential rental provider (for example, living without electricity or running water) – they cannot point to any direct financial outlay as a result of these actions.
If a renter had no running water for 1 month but was unable to afford alternative accommodation, it may be worth attempting to claim a 75% reduction in rent for that period. This figure takes into consideration that despite the significant inconvenience to the renter, the renter still had the benefit of living in the premises during that period.
See also Reardon v Ministry of Housing (unreported, Supreme Court of Victoria, 13 November 1992, Smith J).
See also EL v EA (Residential Tenancies  VCAT 2049 (11 October 2006)).
The Tribunal must also consider any depreciation of the damaged part of the property by having regard to the Uniform Capital Allowance System (s 211A(2)) and the guidelines issued by the Director of Consumer Affairs Victoria (s 211B).
Considerations in compensation matters
When assisting clients to claim compensation or respond to such applications from the residential rental provider there are a number of issues that must be kept in mind.
Section 447 of the RTA specifies a $40,000 limit on compensation claims to be heard by the Tribunal (or $100,000 for Part 4A site tenancy agreement claims). In order to increase this jurisdictional limit, the renter has a number of options that include:
ACL claims: If your client wishes to make a compensation claim under the ACL which exceeds $40,000, the compensation application should specifically refer to the ACL. ACL claims may be heard by the Civil Claims list not the Residential Tenancies List. It is important to think about which list will hear the application because there are significant differences in application fees between the Civil Claims and Residential Tenancies Lists.
Residential rental providers may also claim compensation from renters for breach of a duty provision. For a list of duties see Part 1 above or Compliance Procedures.
Where a renter is the respondent to an application for compensation, the renter may need to:
If the renter disputes the claim, it is necessary to understand the evidence on which the residential rental provider makes its claim. It is equally necessary to understand the evidence upon which the renter resists the compensation claim.
Even if the renter admits that they caused the damage, it is important to ensure that the renter is only required to pay the amount or quantum of the compensation claim that reflects what they admit and what is reasonable.
In assisting a renter to defend an application for compensation, you should obtain all documentation including:
Unfortunately, renters do not always have the evidence relied upon by the residential rental provider, and the Tribunal can occasionally allow applications without this material. If there are difficulties accessing or obtaining this evidence, it may be beneficial to make arguments based on the Tribunal’s fair hearing obligations (see Fairness) or the s 24 Charter right to a fair hearing.
Matters that may be taken into consideration by the Tribunal in considering compensation claims brought by residential rental providers are set out in s 211. They include whether:
The Tribunal also must consider the guidelines issued by the Director of Consumer Affairs Victoria (s 211B).
If the Tribunal has already made a compensation order there is generally very little that can be done to assist the renter. The main issue is whether the renter attended the hearing at which the compensation order was made. If the renter did not attend the hearing, they may be able to apply for a review hearing.
In assisting a renter to prepare a compensation claim you should think about asking the following questions:
In assisting a renter to defend an application for compensation, you should obtain all documentation and consider all the heads of loss or damage claimed by the residential rental provider and consider whether these claims inflated or unreasonable. Further, you should consider asking the renter the following questions:
In advising clients about compensation issues it is important to advise renters about:
In relation to (1) and (2), these issues depend on evidence. In addition to obtaining evidence about the compensation issue, your client may also require evidence which demonstrates that she advised the residential rental provider of this issue.
By obtaining instructions about the evidence for and against your client, you will be in a far better position to understand the strengths and weaknesses of your client’s claim/defence.
In many cases we assist clients who have difficulty in gathering evidence about their compensation claim. They may have difficulty in proving a compensation event existed or that they actually told the residential rental provider about this issue (if required). In these cases it is important to assist the renter to identify and pull the relevant evidence together. It is also important to advise the clients about the difficulties and challenges that confront their application so that they can make an informed decision about whether to bring a compensation claim.
In addition to considering the legal and evidentiary issues, it is also very important to try and provide your client with practical advice about compensation procedures. Some of the issues you may wish to raise with your client include:
You can negotiate to resolve compensation claims outside of VCAT. In some instances, it may be possible to resolve compensation claims through negotiation. You should advise your client of the benefits and risks of trying to resolve a claim through negotiation.
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