Compensation claims

 

During a tenancy a tenant may seek compensation for loss incurred by the landlord by filing a Breach of Duty Notice supported by all relevant details. Landlords may seek compensation but the onus of proof lies with them.

Compensation claims by the tenant

The tenant may claim compensation from the landlord if:

the tenant has suffered loss or damage as a result of a breach of duty under the RTA or a tenancy agreement by the landlord; or

the tenant has paid more to the landlord than required under the tenancy agreement or RTA (ss 209, 210).

The RTA makes a distinction between those compensation claims based on breaches of a “duty provision” and those based on other breaches.

Where the tenancy remains in effect, a tenant must usually serve a Notice of Breach on a landlord before claiming compensation for a breach of duty. If the tenancy has terminated, they will need to serve a Breach of Duty Notice. An application pursuant to section 209 and 210 may be made directly to VCAT.

Generally, a compensation claim should set out clearly the evidence of the breach and loss, the first communication of the issue to the landlord, the number of days the issue persisted for, and when the issue was rectified (if at all). Parties should identify each issue clearly and the loss they suffer as a percentage of their daily rent. Additional and discrete losses that resulted from the landlord’s fault may also be claimed.

For example, an electrical fault is reported to a landlord and the landlord fails to attend. Two weeks later, the electricity shorts out and cannot be restored without intervention. The landlord does not affect repairs until seven days later, when an electrician arrives and restores power. All the food has been spoiled, and the family has been unable to use much of the premises.

The tenant may claim for loss of quiet enjoyment of the premises due to no electricity for seven days. If the daily rent is $50, and the tenant believes the loss is 50 percent. Then the sum claimed is $50 x 7 x 0.5 = $175, plus loss of food and other reasonable expenses for which the tenant should provide receipts.

Ultimately, VCAT may reduce any claim. Generally, VCAT will not increase the amount claimed for a tenant. Therefore, parties should be reasonable, and err on the side of making a larger claim, but expect that they will likely be reduced to a more reasonable amount.

Parties should also pay particular attention to factors outlines in section 211 of the RTA regarding what VCAT considers when determining fault and amounts of compensation payable. Section 211 allows VCAT to consider a wide range of factors including the parties’ conduct and reasonable offers, actions and inactions leading up to the point of VCAT’s determination.

Jurisdiction

VCAT has jurisdiction to hear claims of up to $10,000, or a higher amount if the parties agree. RTA listed matters cannot hear claims for compensation for death, personal injury, or pain and suffering (s 447).

Costs

Costs of a basic VCAT application are generally $59.80 and are indexed annually. Parties are presumed to bear their own costs of proceedings (s 109 VCAT Act). However, if parties’ conduct causes delay or procedural disadvantage to other parties, VCAT has discretion to award costs.

Costs may be awarded against a party, where an offer has been rejected and the subsequent VCAT decision is less favourable than the offer made. Rejected offers that may give rise to such costs must compley with ss 113 and 114 of the VCAT Act.

As of 2 June 2014, there is a presumption that if a party is successful (or substantially succeeded) in their application, the unsuccessful party will be directed to reimburse the successful party their application fee. This is at the discretion of VCAT (s 115A–D VCAT Act). Refer to the VCAT fee schedule on the VCAT website homepage.