The Law Handbook 2024

Chapter 6.1: Tenancy 509 to possession of the property under the mortgage. In the recent decision of Capital Securities XVI Pty Ltd v Kozina & Anor [2023] VSC 178 (6 April 2023), the court states that a mortgagee may be not obligated to follow the processes set out in the RT Act to regain possession. That is to say, the mortgagee may obtain an order such as a warrant for regaining the property (warrant of possession) or an order for ejectment, (as distinct from a possession order under the RT Act) via the Supreme Court Act (see Orders 66.03, 66.12, and 66.16 of Supreme Court (General Civil Procedure) Rules 2005 (Vic)). This approach is consistent with Supreme Court decisions before 29March 2021. However, provisions seemingly introduced to protect innocent renters are now exacerbating rather than palliating the harm caused by a potentially quick eviction in response to rental providers’ default. That is, a mortgagee cannot serve a Notice to Vacate if the mortgagee expressly or impliedly consented to the mortgagor entering into a rental agreement in relation to the premises, regardless of when the rental agreement was entered into (s 91ZZK(1) RT Act). While this purports to protect renters by restricting when the notices can be given, the effect of this stricture and the Capital Securities case compels a mortgagee to use the Supreme Court provisions which do not guarantee a 60-day notice period (s91ZZK), or a postponement of the warrant based on hardship (cf. s 352), or the protection against costs (s 109 VCAT Act), or even a guarantee that the renters will be joined as interested and effected parties in a proceeding between the mortgagee (bank) and the mortgagor (rental provider). This is a complex area of law, and the interaction of this new provision has not been extensively tested. A renter may have a compensation action against their former rental provider for a rental provider breaching the rental agreement; however, a renter cannot prevent the mortgagee from taking possession unless their rental agreement predates the granting of the mortgage. Careful attention should be given to the dates of mortgages (including where a rental provider has remortgaged with a new mortgagee rather than refinanced with the same mortgagee). Many mortgagees will continue to use the RT Act as a more appropriate and accessible process; however, in light of the Capital Securities case, it is important that if a mortgagee contacts a renter, they should seek legal advice immediately. Public housing eligibility A public housing rental provider can give a renter a 90-day Notice to Vacate if the renter no longer meets the public housing eligibility criteria (s 91ZZE RT Act). Notices to Vacate that have no effect In some circumstances, the following Notices to Vacate have no effect (s 91ZZI RT Act): • the property is to be repaired, renovated, or reconstructed (s 91ZX); • the property is to be demolished (s 91ZY); • the property is to be used as a business (s 91ZZ); • the rental provider, or their dependent family member, is to move in (s 91ZZA); • the property is sold, or is on the market (s 91ZZB); • the property is required for a public purpose (s 91ZZC); • it is the end of a fixed-term agreement (s 91ZZD, 91ZZDA); and • the renter is no longer eligible for public housing (s 91ZZE). The circumstances in which these notices have no effect are if: • the minimum notice period has not been given; • the termination date in the notice is before the end of the fixed term in the rental agreement; or • giving the notice would constitute direct discrimination (see ‘Discrimination’, above). Retaliation If a rental provider gives a renter a Notice to Vacate to coincide with the end of a fixed-term agreement (under section 91ZZD or 91ZZDA of the RT Act) and it has been given in response to, or in retaliation for, the renter’s exercise or proposed exercise of a right under the RT Act – or in response to the renter giving the rental provider written notice under section 72AA of the RT Act that the property requires repairs – the notice has no effect. The renter has 28 days after the day on which a 90-day notice is given to apply to VCAT and challenge the validity of the notice (s 91ZZI(5)). They have 21 days in the case of a 60-day Notice to Vacate (s 91ZZI(5)).