The Law Handbook 2024

528 Section 6: Houses, communities and the road According to VCAT Rule 8.10(1), an application for compensation must state the amount of compensation being claimed. While it is the rental provider’s obligation to prove their claim, it is prudent for the renter to provide any evidence that shows: • they did not breach any duty under the RT Act or the rental agreement; • the breach did not cause the loss or damage claimed by the rental provider; or • the amount claimed is excessive/unreasonable in the circumstances. Rental provider to minimise loss If a renter agrees that they are liable for some of the rental provider’s losses, but believes the amount the rental provider is claiming is unreasonable, the renter should provide evidence of this. The rental provider has a duty to keep any loss they suffer to a minimum, and if they have not done so, they may not be entitled to claim compensation from the renter (s 211(e) RT Act). Compensation for repairs or replacements If a rental provider is claiming an amount for repairs or for the replacement of property or fixtures (e.g. to replace carpet or repaint rooms) that the renter believes is excessive, the renter should get quotations from tradespeople or shops to show this. If the property was damaged or worn before the renter moved in, the renter should also point this out on the condition report or using other available evidence. The renter may make a written request for the original receipts or invoices of when the particular items being claimed as needing repair were purchased as new, to raise the issue of age and whether the effective life of the item has been exhausted. The rental provider cannot claim the full cost of replacing something that was not new when it was damaged. VCAT must allow for ‘fair wear and tear’ (s 61 RT Act). VCAT must also consider the depreciation life-spans listed in the ATO’s guide when it calculates the amount of compensation the renter pays (s 211A(2); reg 90). The rental provider’s actions in repairing the damage must also be reasonable and in proportion to the amount of damage caused. The renter should be prepared to argue about both their responsibility for the damage, and about the amount they should have to pay if VCAT finds that they are responsible. Costs for ending a rental agreement early If a renter ends a rental agreement before the end of the fixed term without getting the rental provider’s agreement or a VCAT order, the rental provider may ask for compensation for any reasonable costs they have to pay because the rental agreement ended early. (See ‘Breaking a fixed-term rental agreement (lease-breaking)’, above, for more information about how to defend this kind of compensation claim.) There are certain circumstances where a renter can leave early without paying costs. (See ‘Ending a rental agreement: Renter wants to leave’, above.) Director guidelines When determining a compensation claim, VCAT is required to consider guidelines issued by CAV on the following topics: maintenance, cleanliness, damage and fair wear and tear, and urgent repairs (s 211B RT Act). Refer to the director guidelines on CAV’s website (www.consumer.vic.gov.au) . Insurance claims Insurance operates under a legal principle called ‘subrogation’. The rental provider (‘the insured’) and the insurance company (‘the insurer’) enter a contract. Upon certain events, the insured will pay the insurer a sum of money called an ‘insurance excess’ and give their legal rights to take action for the damage or loss covered under the insurance contract to the insurer. In exchange, the insurance company will either arrange for the damage or loss to be fixed or pay the insured a sum of money as set out under the insurance contract. It is important that renters understand that just because a rental provider makes a claim under their insurance policy, this does not necessarily protect the renter unless there is a clear settlement agreement to the contrary. Further, if the rental provider elects to make a claim on their insurance, the renter is not liable for an excess fee (s 27B, r 11(h) RT Act). See Matthews v