The Law Handbook 2024

Chapter 6.1: Tenancy 491 • allow a renter to pay rent by Centrepay or electronic funds transfer (reg 19); and • give a renter information about the costs they may incur by using any payment before they consent to using that payment method (s 42 RT Act). The rent payment method can be changed during the rental agreement if both parties agree (s 42(6) RT Act). A rental provider, agent or anyone else must not charge for the first issue of a rent payment card or for establishing and using direct-debit facilities for rent payments (s 51(3) RT Act). It is also a prohibited term of an agreement to require a renter to use the service of a third-party service provider nominated by the residential rental provider (other than an embedded network) (s 27B, reg 11(g)). This may include third-party rent collection services. The RT Act does not put any limits on the amount of rent that can be requested; however, it does put limits on how far in advance renters can be asked to pay rent. A rental provider must not require a renter to pay more than two weeks rent in advance if rent is payable weekly (s 41). If rent is paid monthly, the rental provider must not require a renter to pay more than one month rent in advance, unless the weekly rent exceeds $900 (s 40, reg 17). In exceptional cases, a renter or rental provider may argue that rent can be made up of non-monetary ‘payments’ (e.g. work done on a property). However, the party arguing that work undertaken was in lieu of monetary rent needs to prove that this was the case, and that both parties agreed to this agreement. Rent receipts Where rent is paid in person, the person receiving the payment must issue a receipt immediately (s 43(1) (a) RT Act). A renter should never pay rent in cash unless they are given a receipt, especially if they do not have the rental provider’s address and a copy of some sort of identification. Where a renter pays rent by any other method and requests a receipt, a receipt must be issued within five business days (s 43(1)(b) RT Act). The person receiving the rental 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 or until the renter requests a copy, whichever is earlier (s 43(2)). If the renter requests a copy, it must be provided to them within five business days (s 43(2A)). Where the rental provider refuses to issue a receipt, the renter can make a general application to VCAT under section 452 of the RT Act to require receipts or the production of a rental ledger. It is an offence for a rental provider or their agent to fail to comply with these requirements (see ‘Offences under the Residential Tenancies Act’, below). Rent increases Rent increases: Periodic agreements Currently, there is no cap on the amount by which rent can be increased. However, rent must be increased as set out in the RT Act. This provides that if a renter gets a Notice of Increase, and believes the increase is excessive, they may challenge the increase. The assessment to determine whether a rent increase is excessive is free. Further, if a rent increase is not done correctly, as set out in the RT Act, the rent increase may not be effective. Increased rent paid after receiving an invalid Notice of Increase may be refundable (s 39 RT Act). Rent increases: Frequency Rent for all periodic rental agreements started on or after 19 June 2019 can be increased once every 12 months (s 44(4A) RT Act). For existing periodic rental agreements that started before 19 June 2019, the rent can be increased every six months until the rental agreement ends or a new fixed-term agreement is entered into for the same premises (cf sch 1, cl 16). However, CAV takes the position that it does not matter when the periodic agreement started; rent cannot be increased more than once every 12 months if a renter has a periodic agreement. If a renter receives a Notice of Proposed Rent Increase – and it is less than 12 months since they last received a Notice of Proposed Rent Increase – it is recommended the renter challenges the notice by applying to CAV to review the increase. Rent increases: Fixed-term agreements A rental provider cannot increase the rent during the course of a fixed-term rental unless the rental