The Law Handbook 2024

Chapter 6.1: Tenancy 503 time (up to a maximum of 30 days if they can show severe hardship) (s 352, 333 RT Act). Usually, the prospects of eviction and homelessness will be considered to have significant weight (see Balasis v Williams (Residential Tenancies) [2012] VCAT 706 (30 May 2012)). Rental providers should also seek to identify any rights they may have in relation to mortgage moratoriums or other relief to ensure eviction for rent arrears is a last resort. Unfortunately, for many, eviction will be a reality, and early planning, alternative housing and support resources should be investigated as early as possible. Rent accrues daily (s 39 RT Act). If a renter owes 14 days or more rent a rental provider may give them a 14-day Notice to Vacate (s 91ZM). The reasonable and proportionate test does apply to rent arrears, but it will not operate as a defence to significant arrears that cannot be repaid (see Markiewicz v Crnjac [2001] VSCA 290). Further, a notice that significantly overstates the amount of rent owed is invalid (see Liu v Tang [2022] VSC 243 (18 May 2022)). It is important to review the history and validity of rent increases when a renter faces a Notice to Vacate for rent arrears, as an invalid notice of rent increase may significantly change the amount of rent owed (if any). See ‘Rent increases’, above. Overdue rent notices that ‘have no effect’ If the notice is the first, second, third or fourth Notice to Vacate for overdue rent in a 12-month period, and the renter pays all the unpaid rent before the termination date, the notice will have no effect (s 91ZM(1) RT Act). The rental provider cannot apply to VCAT for a possession order, but if they do, VCAT must dismiss the application (ss 91ZM(1), 331(4)). This applies even if further arrears have been accrued after the Notice to Vacate was issued. See the case of Kaur v Lawton (Residential Tenancies) [2021] VCAT 1067 (14 September 2021), where VCAT confirmed that unpaid rent, for the purposes of a Notice to Vacate, only includes ‘the rent owing to the date the notice is created’ and not any ‘rent payable past the date of the notice’. The first 12-month period is set from the day the initial rental agreement starts (s 91ZM RT Act). The ‘count’ (referred to as ‘occasions of non-payment of rent’ in the RT Act) for the first four notices to vacate for overdue rent restarts each time the next 12 months begin, i.e. on the anniversary of the initial rental agreement. It is important to note that even if the rent arrears are paid off before the termination date, the Notice to Vacate (if valid) will still add to the court towards a fifth notice, which alters the renter’s available rights when in rent arrears (see Jackson v Field (Residential Tenancies) [2022] VCAT 859 (28 July 2022)). Overdue rent notices that ‘have effect’ First, second, third or fourth Notice to Vacate If the notice is the first, second, third or fourthNotice to Vacate for overdue rent in a 12-month period, and the renter did not pay the rent before the termination date, the notice will have effect (s 91ZM(1) RT Act). This means the rental provider can apply to VCAT for a possession order if the renter chooses to stay beyond the termination date (s 91ZM(1)). At the possession order hearing, VCAT can decide to dismiss the application, adjourn the application, including making a payment plan, or make a possession order (ss 91ZM, 331). VCAT has the discretion to adjourn or dismiss a rental provider’s application for a possession order on the basis of rent arrears if it believes satisfactory arrangements have been or can be made to avoid financial loss to a rental provider (s 331(1) RT Act). It is important to present evidence showing: • the reason the renter fell behind in their rent; • the renter’s ability to pay the rent on time in the future; and • the renter’s ability to repay the overdue rent. A renter should produce evidence including: • a statement from a financial counsellor outlining their income and expenditure and how much they can afford to pay for each instalment (if they are offering to pay by instalments); • medical certificates if the renter has been ill, injured or unable to work; • witnesses who can give evidence about why the renter fell behind in their rent and can confirm that the renter can pay the overdue rent (e.g. a new employer) • copies of bills for unexpected expenses; and • evidence of income (tax returns, pay slips, etc.). The renter should also ask anyone able to provide evidence in support of their case to attend the VCAT