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Compensation

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).

Such a claim can be made at any time up to six years after the alleged loss or damage occurred.

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 on foot, a tenant must usually serve a Notice of Breachon a landlord before claiming compensation for a breach of duty. Notice of Breachforms are available by contacting Consumer Affairs Victoria (see “Advice and contacts” at the end of this chapter for contact details) and can also be downloaded at www.consumer.vic.gov.au.

Evidence

The success or otherwise of the claim will depend on what the tenant is able to establish at VCAT. If the tenant makes a claim, the tenant has the onus of producing evidence that established that:

  • the landlord breached the tenancy agreement or the RTA; and
  • the breach caused loss or damage (or occasionally, substantial quantifiable inconvenience); and
  • that the amount the tenant is claiming as compensation is reasonable.

VCAT has jurisdiction to hear claims of up to $10,000, or a higher amount if the parties agree. As a result of a decision in 2002, VCAT is also able to invoke its Civil Claims jurisdiction (which has unlimited monetary jurisdiction) for residential tenancy matters.

VCAT cannot hear claims for compensation for death, personal injury, or pain and suffering (s 447).

Landlord’s breach of duty provisions

If the landlord or agent has committed certain breaches of the RTA or the tenancy agreement, the tenant should serve them with a Breach of Duty Notice in order to claim compensation (s 208).

The types of breaches for which a notice might be served are discussed above at “Landlord and tenant duties”.

Note: A Breach of Duty Notice claiming compensation does not have to be served if the tenancy has been terminated. If the tenancy agreement has been terminated, the tenant can make an application for compensation directly to VCAT.
Breach of duty notice

This notice must:

  • specify the breach;
  • give details of the loss or damage caused by the breach;
  • require the landlord to remedy the breach or pay compensation within 14 days;
  • state that the landlord must not commit a similar breach again; and
  • state that if the notice is not complied with, an application may be made to VCAT.

The notice must be in writing, addressed to the person allegedly in breach of the duty and be signed by the person giving the notice (s 208). The tenant can give this notice in the form of a letter, however given the requirements of (s 208) it is advisable to use the prescribed Breach of Duty Notice form. These forms are available by contacting Consumer Affairs Victoria (see “Advice and contacts”, below) and can also be downloaded at www.consumer.vic.gov.au.

It is recommended that the tenant send the Notice by registered mail in case of a dispute about service.

If the landlord does not pay the compensation claimed or comply within 14 days, the tenant may then apply to VCAT for a compensation or compliance order (s 209).

Other breaches

If the landlord or agent has breached the RTA or the tenancy agreement but the breach was not of a duty provision (e.g. damage was caused to the tenant’s goods during entry by the landlord or their agent), or if the claim is for repayment of moneys overpaid, the tenant may apply to VCAT without first serving any notice (s 210).

However, in some cases it is recommended that the tenant serve a notice on the landlord or agent even if the breach was not of a duty provision. This gives the landlord details of the claim, and an opportunity to agree to payment. The tenant’s application to VCAT for compensation must give details of the breach and of the loss or damage caused by the breach (reg 6.28.1(1) VCAT Rules).

Compensation claims by the landlord

The landlord may claim compensation from the tenant if:

  • the landlord has suffered loss or damage as a result of a breach of duty under the RTA or a tenancy agreement by the tenant; or
  • the landlord has paid more to the tenant than required under the tenancy agreement or RTA (ss 209, 210).

Such a claim can be made at any time up to six years after the alleged loss or damage occurred.

Defending the claim for compensation

If making a claim for compensation the landlord bears the onus of proof and must establish that:

  • the tenant breached the tenancy agreement or RTA;
  • they have sustained loss or damage;
  • the loss or damage resulted from the tenant’s breach of the lease or the RTA; and
  • the amount they are claiming is reasonable.

The landlord must provide evidence in support of their claim, and must show the tenant or give the tenant copies of any documents or photos they present to VCAT.

While it is the landlord’s obligation to prove their claim it is prudent for the tenant to provide any evidence that shows:

  • they did not breach any duty under the RTA or the tenancy agreement;
  • the breach did not cause the loss or damage claimed by the landlord; or
  • the amount claimed is excessive/unreasonable in the circumstances.
Landlord to minimise loss

If the tenant agrees that they are liable for some of the landlord’s losses, but believe that the amount the landlord is claiming is unreasonable, the tenant should provide evidence of this. The landlord has a duty to keep any loss they suffer to a minimum, and if they have not done so, they may not be entitled to claim compensation from the tenant.

Evidence from tenant

If the landlord is claiming for repairs or replacement of property or fixtures, the tenant should get quotations from tradespeople or shops to show that any amount the landlord says they will have to spend (e.g. on replacing carpet, having rooms repainted) is excessive if the tenant believes this to be the case. If the property was damaged or worn before the tenant moved in, the tenant should also point this out and provide evidence of this, if available.

The landlord cannot claim the full cost of replacing something that was not new when it was damaged, and VCAT will generally allow for “depreciation” and “fair wear and tear”. The landlord’s actions in repairing the damage must also be reasonable and in proportion to the amount of damage caused.

The tenant should be prepared to argue about both their responsibility for the damage, and about the amount they should have to pay if VCAT finds that they are responsible.

Compensation :: Last updated: Sun Jun 30th 2013