The Law Handbook 2024

Chapter 6.1: Tenancy 471 has not been provided, the law still imposes a rental agreement if the renter has exclusive possession of a premises and pays some sort of rent. The exact point when a tenancy comes into existence varies depending on the circumstances (e.g. a rental provider letting a renter take possession of a premises, or a renter collecting the keys). The meaning of possession depends on the circumstances. If VCAT finds there is a rental agreement and it is the person’s primary place of residence, the parties to the agreement are subject to the RT Act and to the rights and responsibilities in the Act. Fixed-term and periodic agreements A fixed-term rental agreement specifies the length of time the rental agreement will run (usually six or 12 months). Fixed-term agreements are usually in writing, although it is possible for an agreement to be oral. Any rental agreement that does not specify a fixed term is a periodic rental agreement (s 3 RT Act). A periodic agreement does not have a fixed term but continues from one period to the next, usually month to month, although it may also be fortnightly or weekly. At the expiration of the fixed term, if neither party gives notice to end the agreement, the rental agreement continues on a periodic basis. The periodic agreement remains on the same terms as the original fixed-term agreement, unless varied by the parties (s 91Q RT Act). Long-term rental agreements Since 3 April 2019, the RT Act has allowed rental agreements for more than five years. There are two types of prescribed standard form rental agreements: 1 Form 1 rental agreement for five years or less (s 26(1)); 2 Form 2 rental agreement for more than five years (s 26(1A)). Forms 1 and 2 are available on CAV’s website (www. consumer.vic.gov.au) . It is important that prospective renters read the relevant form thoroughly before entering into a rental agreement. Form 2 must be used for rental agreements that are longer than five years for the rights and duties associated with section 26(1A) of the RT Act to apply. Form 1 may be used for rental agreements that are longer than five years. Form 2 cannot be used for rental agreements that are less than five years. A Form 2 rental agreement is significantly different from a Form 1 rental agreement. For example, a Form 2 rental agreement includes fixed rent increases, bond top-ups between fixed-term periods (s 34A, 34B RT Act), more detailed arrangements for modifications, a greater restriction on terms (s 27A) and, most notably, a greater range of compliance orders in relation to the rental agreement (s 209AA). It is strongly recommended that parties obtain legal advice before entering into a Form 2 long-term rental agreement. This chapter does not extensively cover Form 2 rental agreements or when rental agreements under section 26(1A)(b)(i) of the RT Act are specifically regulated. Also, if a rental agreement purports to be a ‘rent- to-buy’ scheme, see Part 1 Division 5 of the Sale of Land Act 1962 (Vic) and seek legal advice before entering into such an agreement. Sub-letting Subletting is when a renter grants exclusive possession of all or part of a premises to another person. The original renter remains a renter, and effectively becomes the rental provider of the sub-renter. The RT Act states that a renter must not assign or sub-let the whole or any part of a rented premises without the rental provider’s written consent (s 81 RT Act). Any assignment or sub-letting that is done without the rental provider’s consent is invalid and unenforceable (s 81). Generally, consent cannot be retrospectively obtained. If the renter has assigned or sub-let (or tries to assign or sub-let) the premises by giving exclusive possession without the rental provider’s consent, the rental provider can give the renter a 14-day Notice to Vacate (s 91ZV) (see ‘Other 14-day Notices to Vacate’, below). Previously, a finding of subletting or assigning without consent under section 91ZV of the RT Act was final, but now, in light of the ‘reasonable and proportionate’ test, the risk of eviction may be reduced. This is a complex area of law, and renters who receive a Notice to Vacate on these grounds should seek legal advice. While there are no definitive indications to distinguish a rental agreement and a licence, the act of hosting, providing services and dominion by a rental provider are substantive indicators against granting