The Law Handbook 2024

Chapter 6.1: Tenancy 523 an order that the rental provider returns the items, or for an order that the rental provider has to pay the renter compensation (s 397 RT Act). Belongings are lost, disposed of, or damaged If a rental provider loses, disposes of, or damages a renter’s goods or personal documents, either on purpose or by accident, the renter can apply to VCAT for compensation (s 398 RT Act). If a rental provider destroys, disposes of, or sells a renter’s goods or personal documents without following the steps in the law, the renter can apply to VCAT for compensation (s 396 RT Act). Compensation claims Compensation claims by the renter A renter may claim compensation from a rental provider if: • the renter has suffered loss or damage as a result of a breach of duty, under the RT Act or a rental agreement by the rental provider; • the renter has paid more to the rental provider than required under the rental agreement or RT Act; • the rental provider has not reimbursed the renter for urgent repairs within seven days of receiving written notice; or • the renter has suffered loss or damage due to discrimination against them by the rental provider or agent (ss 209, 209AA, 209AAB, 210AA, 210). The RT Act distinguishes between compensation claims based on breaches of a ‘duty provision’ and claims based on other breaches. Where a rental agreement remains in effect, a renter must usually serve a Breach of Duty Notice on a rental provider before claiming compensation for a breach of duty. If the rental agreement has terminated, a renter does not need to serve a Breach of Duty Notice before applying for compensation. An application (under ss 209, 210 RT Act) may be made immediately to VCAT. (See also ss 209AA, 209AAB, 210AA.) A compensation claim should include evidence of the breach and loss, the first communication of the issue to the rental provider, the number of days the issue persisted for, and when or if the issue was rectified. Parties should identify each issue and the loss they suffered as a percentage of their daily rent. Or parties can identify issues as a separate loss where appropriate (e.g. the cost of making urgent repairs to the property). Evidence of the report is essential as this dictates the start date from when the compensation can be considered (see also ‘Condition reports’, above). A renter may also claim discrete losses in addition to losses as a percentage of their daily rent. For example, an electrical fault is reported to a rental provider and the rental provider fails to attend to it. Two weeks later, the electricity goes out and cannot be restored without intervention. The rental provider does not arrange repairs until seven days later, when an electrician arrives and restores power. All the food has been spoiled and the family has been unable to use much of the premises. The renter may claim for loss of quiet enjoyment of the premises due to not having electricity for seven days. If the daily rent is $50 and the renter believes the loss is 50 per cent, then the sum claimed is $175 (i.e. $50 x 0.5 x 7), plus loss of food and other reasonable expenses for which the renter should provide receipts. A renter can also claim for the ‘general inconvenience’ they have experienced. The general principle of claiming compensation for general inconvenience arises from the Supreme Court decision of Reardon and Reardon v Ministry of Housing (SCVCA, unreported, 13 November 1992, per Smith J). General inconvenience is normally only considered in cases where there has been a serious interference with a renter’s rights and those rights can be tied to a renter’s right to the quiet enjoyment of the property. It is recommended that renters claim $1000 as a starting point for general inconvenience (see also Walmsley & Walmsley v Charles (Hall) (Residential Tenancies) [2019] VCAT 1691 (28 October 2019)). Further, in Young v Chief Executive Officer (Housing) [2023] HCA 31 (1 November 2023), the High Court has acknowledged that a renter may be entitled to compensation for experiencing distress and disappointment arising from the rental provider’s breach of the agreement or the Act. This is a decision from the Northern Territory. However, it is expected to have significant application in Victoria. The decision acknowledges that compensation for distress and disappointment should not be considered as a form of personal injury (cf. s 447),