Rent

 

Receipts must be issued for rent paid if the tenant requests and any rent increase must be notified 60 days in advance. Rent cannot be increased during a fixed term tenancy. Excessive increases will be investigated by Consumer Affairs.

Introduction

Rent is the amount paid by the tenant to the landlord to occupy the rented premises and to use the facilities and services. Rent is payable at the place specified in the agreement or if none is specified, at the rented premises. The rent is payable in the manner, if any, specified in the agreement (s 42).

The RTA does not limit the amount of rent payable by a tenant. However, a landlord must not require a tenant to pay more than one month in advance unless the weekly rent exceeds $350 (s 40).

In exceptional cases, the tenant or landlord may argue that rent can be made up of a non-monetary consideration, such as work done on the property. However, the party arguing that work undertaken was in lieu of monetary rent would need to prove that this was the case, and that both parties had agreed to such a term.

For more information contact the Tenants Union. SeeAdvice and contacts”.

Receipts

Where rent is paid in person, the person receiving the payment must issue a receipt immediately (s 43(1)(a)). Where a tenant pays rent by any other method and requests a receipt at that time, a receipt must be issued within five business days (s 43(1)(b)). The party receiving the payment must sign the receipt (s 43(3)).

If rent is not paid in person and a receipt is not requested, a record of the payment must be kept for 12 months, and must be provided to the tenant within five business days of a request (s 43(2),(2A)).

A tenant should never pay the rent in cash unless they are given a receipt, especially if they do not have an address for the landlord, for sending documents.

Where the landlord refuses to issue a receipt, the tenant can make a general application to VCAT under section 452 of the RTA to require receipts or the production of a rental ledger.

If a landlord or their agent does not comply with any of the above, it is an offence which is reportable to CAV (seeNotices to leave, offences and suspensions”).

Rent increases

The landlord must give at least 60 days’ notice in writing, in the proper form, of a proposed rent increase. The notice may only provide for one rent increase and must inform the tenant of their right to apply, within 30 days, to CAV to investigate the rent increase (s 44(3)).

Any rent increase notice that does not comply with these requirements is invalid. The tenant does not have to pay the increase, and may seek reimbursement for any rent paid in accordance with an invalid rent increase (which can be applied for no more than six years after the increase).

Periodic agreements

During a “periodic” agreement, a landlord must not increase the rent payable at intervals of less than six months (s 44(4A)) (seeFixed-term and periodic agreements”).

Fixed-term agreements

The landlord cannot increase the rent during the course of a fixed-term tenancy unless the tenancy agreement allows for a rent increase during the fixed term (s 44) (seeFixed-term and periodic agreements”).

Tenants should be wary and seek advice before signing a lease with rent increases “built in”. If there is a clause allowing rent increases during the fixed term, the landlord can increase the rent in accordance with that clause and the RTA.

The prohibition on increasing the rent payable at intervals of less than six months still applies (s 44(4A)). The landlord is also still required to provide 60 days written notice, in the proper form, in order for any rent increases “built in” to a fixed-term agreement to be valid (s 44(1)).

Is the increase excessive?

If the tenant believes the proposed rent is excessive, they can make a free application to the Director of CAV to investigate and report as to whether this is so (s 45(1)). The application must be made within 30 days of receiving a Rent Increase Notice (s 45(2)).

The tenant can make the application by letter or can use the Request for Repairs Inspection or Rent Assessment form available from CAV. The tenant can provide reasons with the application for why they believe that the rent is excessive. Complaints may be related to the state of repair of the property, or if amenities or services provided at the start of the tenancy have been reduced or withdrawn.

An inspector from CAV must carry out the investigation and give a written report about the rent to the tenant and landlord as soon as practicable. The report will state whether or not in the Director’s opinion the rent is excessive. The report must take into account considerations listed in the RTA (s 47(3)).

Application to VCAT

If the director’s report finds the increase excessive, the tenant may apply to VCAT for an order to this effect. This application to VCAT must be made within 30 days of receiving the inspector’s report (s 46).

The application should request an order declaring the rent or proposed rent excessive. A copy of the director’s report must be attached to the application (r 7A.07(1) VCAT Rules). VCAT will take into account the inspector’s report and the factors of the case (s 47(3)).

The tenant should obtain as much evidence as possible on the matters listed in (s 47(3)) before the VCAT hearing.

If the rent increase comes into effect before the case is heard at VCAT, the tenant must pay the increased rent. If the application is decided in the tenant’s favour, VCAT can order that the tenant be reimbursed any increased rent that has already been paid. If the tenant does not pay the increased rent, they will be in arrears and at risk of eviction.