RENT REDUCTIONS ADVANCED RESOURCE KIT - FCVic

RENT REDUCTIONS
 ADVANCED RESOURCE KIT

Overview
Covid 19 has had a profound impact on the financial and social well-being of Victorian renters. The
Omnibus Emergency Act makes changes to the Residential Tenancies Act 1997 (RT Act) which operate
from 29 March 2020 until 31 December 2020 (with a likely extension until 28 March 2021).

The amended Act now allows tenants to apply for a rent reduction where their income has been
affected by Covid 19. The intention is to allow people to sustain their tenancies, comply with the
Government Health restrictions and reduce the accumulation of rent arrears when the emergency
legislation is revoked.

The Government has also provided a number of financial incentives for landlords to give tenants a
rent reduction. This includes land-tax incentives, and the mutual benefit of accessing the rent relief
grant which can provide for up to $3,000 contribution towards rent for eligible persons (not covered
in this kit).

To get a rent reduction, parties are required to go through the Residential Tenancies Dispute
Resolution Scheme (RTDRS), which is established by the RT Act and the emergency regulations.

The scheme is designed to operate efficiently and less formally than VCAT and encourage parties to
reach agreements. If the rent reduction is not resolvable by mediation, conciliation or a binding
dispute resolution order, then the matter can still be referred to VCAT for a rent reduction to be
determined.

Training
The training will be delivered by Tenants Victoria. It will consider the legal aspects of the Omnibus
Emergency Act and how this is applied to seek a rent reduction within the residential tenancies dispute
resolution scheme. It will also provide clarity around Rent Relief Grants, including eligibility and
processes. The training will be offered in two stages:

Stage one - a recorded training on the legalities of a rent reduction, the dispute resolution scheme
and rent relief grant.

Stage two - will consist of a live webinar providing a brief recap of the recorded training, followed by
case studies for practical advocacy application and support and an in-depth Q&A session.

Upon completion of these sessions participants will be able to:

    ●   Navigate the Omnibus Emergency Act in relation to rent reduction and dispute resolution
        scheme.

    ●   Provide information and advice to tenants relative to the Omnibus Emergency Act’s rent
        reduction - dispute resolution scheme vs deferral of rent.

    ●   Provide information and advice to tenants who are in rental hardship to begin the process of
        a rent reduction request including sourcing the supporting documentation required, financial
        capability, and letters to landlords/real estate agents.

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●   Provide information and advice on strategic information and responses that could assist in the
        rent reduction negotiations in initial phases with real estate agents/landlord through to the
        dispute resolution scheme.

    ●   Assist clients with rent relief grant information, including eligibility and the process for tenants
        to access this grant.

Disclaimer
This Rent Reduction Resource Kit is intended to provide information and knowledge from the training
to support and advocate for rent reduction requests from tenants.

The information in the Rent Reduction Resource Kit is relevant and accurate at the time of
production 14 September 2020 but may vary relative to Government restrictions and advice due to
Covid 19 conditions. Please refer to our website for the latest up to date information
https://www.tenantsvic.org.au/

Content
Relevant Link to Resources                                                            3

Legislation, Sections and Regulations Overview                                        4

Step 1 - Ask Directly for a Rent Reduction                                            5

Sample Rent Reduction Letters                                                         5

Step 2 - Reaching an agreement for a Rent Reduction                                   8

Consumer Affairs Victoria Reduction Agreement                                         9

Step 3 - Consumer Affairs Victoria – Assessment                                       11

Step 4 - Preparing for the Residential Tenancies Dispute Resolution                   19

Step 5 - Applying to VCAT from the RTDRS                                              22

Guide to Acronyms
Consumer Affairs Victoria - CAV

Dispute Settlement Centre of Victoria - DSCV

Residential Tenancies Act - RT Act

Residential Tenancies Dispute Resolution Scheme - RTDRS

Victorian Civil and Administrative Tribunal - VCAT

                                                     2

Links to Relevant Resources - Requesting a Rent Reduction in the Residential
Tenancies Dispute Resolution Scheme
Tenants Victoria
   ●   Coronavirus (COVID-19) guide for renters

   ●   ‘Rent reductions’ Coronavirus (COVID-19) guide for renters including rent reduction letters

   ●   ‘VCAT applications & the Dispute Resolution Scheme’ Coronavirus (COVID-19) guide for
       renters

   ●   Example rent reduction agreement (DSCV template) [pdf, 87kb]
Consumer Affairs Victoria (CAV)
   ●   Coronavirus (COVID-19) and your rights

   ●   Rent Reduction process

   ●   Coronavirus (COVID-19) rental agreement or dispute (to register an agreement or to ask CAV
       for help)

   ●   Rental dispute initial assessment form

   ●   Rental Reduction Agreement

   ●   Residential Tenancies Dispute Resolution Scheme - General Practice Direction

Department of Health and Human Services (DHHS)
   ●   Rent relief grant Q&A’s

   ●   Rent relief grant application

   ●   Rent relief grant policy

   ●   Where can tenants get extra income/financial support:

           o   Commonwealth Rent Assistance

           o   Financial help for private renters

Victorian Civil and Administrative Tribunal (VCAT)
   ●   Tenant financial circumstances statement
   ●   Concession and fee relief
   ●   Application process
Other resources

   ●   OAIC (Office of the Australian Information Commissioner)
   ●   ASIC letter to Estate Agents

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Legislation, Sections and Regulations – Overview
The primary provision regulating rent reductions is section 540 in relation to tenancies. This also
applies to Rooming Houses (s553), Caravans and Part 4A dwellings in parks (s563, 573), and Specialist
Disability Accommodation (SDA) (s586).

Most notably from these provisions, three powers appear to exist: Firstly, rent can be reduced.
Secondly, payment plans can be made. Thirdly, it appears that a rent reduction can have
retrospective effect (meaning accumulated rented arrears may be reduced if the rent is lowered from
a particular date – even prior to the application being made.) The extent to which rent arrears can be
dealt with retrospectively is yet to be seen in a decision from VCAT. This should be argued and
requested in the RTDRS process as well.

The majority of the powers of the RTDRS are the same powers the VCAT has. A Tenant has an active
right to seek a rent reduction regardless of how resistant the landlord may be. Familiarity with this
section is essential.

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Step 1. Ask directly for a rent reduction
Tenants should ask their landlords for a rent reduction. However, many tenants are waiting far too
long for an answer, or don’t know what to do if they are refused. We recommend sending a letter
such as the draft letters below.

If you do not reach a satisfactory agreement in 1-2 weeks, the tenant should immediately apply to
CAV to start proper negotiations and get into the RTDRS as soon as possible.

Sample Rent Reduction Letters
Letter to the real estate agent:

Letter to the real estate agent requesting rent reduction (from 1 tenant)

https://www.tenantsvic.org.au/articles/files/letters/rent-reduction-letter-AGENT-1tenant-
20Aug2020.doc

Letter to the real estate agent requesting rent reduction (from 2 or more tenants)

https://www.tenantsvic.org.au/articles/files/letters/rent-reduction-letter-AGENT-2+tenants-
20Aug2020.doc

Letter to the landlord:

Letter to the landlord requesting rent reduction (from 1 tenant)

https://www.tenantsvic.org.au/articles/files/letters/rent-reduction-letter-LANDLORD-1tenant-
20Aug2020.doc

Letter to the landlord requesting rent reduction (from 2 or more tenants)

https://www.tenantsvic.org.au/articles/files/letters/rent-reduction-letter-LANDLORD-2+tenants-
20Aug2020.doc

For demonstration purposes, here is the letter to real estate agent from one
tenant:
INSTRUCTIONS FOR TENANTS:

1. USE THIS LETTER IF:

•       you are writing to the AGENT

•       and there is only 1 tenant.

2. FILL IN YOUR DETAILS:

•       Fill in your details to replace [THINGS LIKE THIS] and [_______]

•      Choose from the examples at A, or add your own, to replace [EVIDENCE]. This is to provide
evidence of your financial situation.

•       Feel free to add details about your own specific circumstances

•       Feel free to delete sections that you do not want to include

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•        We suggest 25-30% of your income as a reasonable amount of rent to pay.

3. ATTACH EVIDENCE:

•        Attach a copy of the evidence when you send the letter. See examples at A.

4. ATTACH TEMPORARY AGREEMENT:

•        Attach a copy of your temporary rent reduction agreement when you send the letter. It
         should be filled in and ready for the landlord to sign. You can find an example temporary
         agreement on our website (tenantsvic.org.au).

5. KEEP COPIES FOR YOURSELF:

•        Keep a copy for yourself of everything you send to the landlord or agent including your
         letter, the evidence and the temporary agreement.

6. DELETE INSTRUCTIONS AND EXAMPLES BEFORE YOU SEND THE LETTER.

A.       EXAMPLES OF EVIDENCE

•        a letter from my employer about my employment being terminated

•        a letter from my employer about my income and hours being reduced

•        copies of my pay slips showing my income and hours have been reduced

•        a copy of confirmation from Centrelink that I have applied for payments

•        a copy of my Centrelink income statement showing my eligibility for government financial
         support due to the loss of my job and regular income

Sample Rent Reduction Letter
[DATE]

[AGENT’S NAME]

[COMPANY NAME]

[ADDRESS]

[SUBURB] VIC [POSTCODE]

By email: [AGENT’S EMAIL ADDRESS]

Dear [NAME],

[RENTAL ADDRESS]: Rent reduction due to impact of COVID-19

I hope that you are going well during this strange and difficult time. I am writing to keep you informed about
my current circumstances and how they have been affected by the outbreak of COVID-19. Due to the COVID-19
pandemic, my regular income has been reduced/suspended. This has unfortunately affected my ability to afford
and pay my rent.

I appreciate that the landlord may be experiencing their own hardships due to COVID-19, and I would like us to
work together to try and find a fair solution. I understand that the Victorian Government is offering land tax
relief to landlords as well as rent relief grants that are paid directly to landlords. In order to access either of

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these, an agreement between us will need to be registered with Consumer Affairs Victoria. Getting an
agreement in place as soon as possible would also help us establish some certainly about the coming months.

What I propose is:

paying $[_________] per week in rent for [________] months

starting [________] 2020 which is when my circumstances changed.

This amount represents [________]% of my weekly income and is the most that I can afford.

While I acknowledge that this is not ideal, it does mean that the landlord will be able to at least receive some
income from their investment and I will be able to stay in this home. I have assessed my current financial
situation and based on that I am confident that I can comply with this arrangement. I am dependent on this
reduction and ask for the landlord’s compassion during a time when everyone in society is struggling. I also ask
the landlord to take into account my history as a good tenant when considering this request.

If you can please pass this request on to the landlord and let me know their response as soon as possible, that
would be greatly appreciated. I note that the new emergency laws passed by government in response to the
COVID-19 pandemic will allow me to apply for a rent reduction through Consumer Affairs Victoria and the
Victorian Civil and Administrative Tribunal, and to ask for the reduction to apply from the time my
circumstances changed, if I cannot get the landlord’s agreement. I would prefer to come to an agreement with
the landlord rather than taking this sort of action and would be grateful for any generosity that the landlord is
willing to show.

I am also aware that the severe financial hardship I am experiencing as a result of the pandemic may allow me
to give my notice to move out if I can no longer afford the rent. But I would like to avoid this if possible and
would like to come to an agreement with the landlord that will allow me to stay.

Evidence

I have included:

[EVIDENCE]

as evidence of the impacts of COVID-19 on my financial situation (see attached).

Temporary rent reduction agreement

I have prepared a temporary rent reduction agreement based on my proposal (see attached). If the landlord
agrees to this proposal, can you please arrange for the landlord (or you on their behalf) to sign it, and return it
to me as soon as possible so I may register the agreement with Consumer Affairs Victoria.

Once our agreement is registered with Consumer Affairs Victoria the landlord will be able to rely on this to
apply for a discount on their land tax, and I will be able to apply for a rent relief grant, which, if granted, will be
paid directly to the landlord as a rent credit.

I am happy to discuss this further so please feel free to contact me if you have any questions. Thank you very
much for your time.

Yours sincerely,

[YOUR NAME]

[YOUR PHONE]

[YOUR EMAIL]

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Step 2 (if possible) Reaching an agreement for a Rent Reduction:

Example rent reduction agreement (DSCV template)

If the landlord and tenant can reach an agreement, both Consumer Affairs Victoria (CAV) and the
Dispute Settlement Centre of Victoria (DSCV) provide template agreements which may be useful.
These documents cover almost all aspects of the rent reduction provisions; rent reductions,
repayment plans, and the resolution of other matters by agreement.

It appears that the scheme has assumed that the rental reduction agreements will automatically
revert back to the normal rent once the agreement ends without engaging the requirements under
section 44 of the Act, being 60 days written notice of a rent increase. It is yet to be seen if this issue
will become controversial.

The key features that should be attended to are the period to which the agreement applies, and
most importantly, the amount rent is to be reduced by.

Rent Deferrals in Agreements

It is also recommended to be clear in any agreement that the rent reduction is not a rent deferral.
In other words, there is no obligation to repay the rent.

A “rent deferral” means that when an agreement expires or, on the occurrence of some other event,
the full rent becomes payable.

Tenants Victoria strongly recommends against rental deferrals, and if parties cannot reach an
agreement privately, or through the RTDRS, then they may still be able to get the matter determined
by VCAT. Rent deferrals may result in the accumulation of large debts over the period of the
emergency legislation, and should be avoided where possible.

Alternative rent reduction agreement

The DSCV rent reduction agreement template mentioned above may be too complicated and might
invite more issues than necessary in relation to getting a rent reduction. As an alternative, CAV also
provides a template reduction agreement which may be preferred for its simplicity. A copy of this
agreement is shown below.

If you reach an agreement for a rent reduction make sure that it is registered with CAV

If you reach an agreement ensure the agreement is registered with CAV. This is both useful for
accountability and in any future disputes, as well as being a necessary part of applying for the rent
relief grant.

When reaching your rent reduction amount, you want to make sure you remain eligible for the rent
relief grant. This is a critical aspect, as the grant is now $3,000, and the rent relief grant is
administered by a separate entity.

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Consumer Affairs Victoria – rent reduction agreement
Temporary rent reduction agreement
This Agreement may be used by a landlord and a tenant to record an agreement made between them
to reduce the amount of rent otherwise payable for the occupation of the rented premises because of
the impact of the COVID-19 pandemic.
This Agreement cannot be used to vary or change any other term of the tenancy agreement between
the landlord and tenant.
Guidance text is in italics and may be deleted.

1. This AGREEMENT applies to both fixed term tenancies and to periodic
   tenancies
a) This AGREEMENT forms part of and modifies the written tenancy agreement between the
   landlord and tenant(s) for the rented premises. In this AGREEMENT, the written tenancy
   agreement is referred to as the Primary Tenancy Agreement.
b) If there is no written tenancy agreement, this AGREEMENT forms part of and modifies the
   existing arrangements between the landlord and tenant(s) regarding the amount of rent payable
   under the tenancy. In this AGREEMENT, the existing arrangements between the landlord and
   tenant are referred to as the Primary Tenancy Agreement.

2. Parties and date of agreement
This AGREEMENT is made on                /        /       (insert date)

BETWEEN:(LANDLORD)
(insert name and ACN if landlord is a company)

(AGENT)
(insert name and address of the agent if landlord has an agent)
AND:

(TENANT 1)
(insert name and ACN if tenant is a company) and address of tenant

(TENANT 2)
(Add more tenants as necessary, or cross out Tenant 2 if there is only one tenant)

3. Rented premises
The address of the rented premises is:
(insert address)

4. Rent reduction agreement
The parties agree that this AGREEMENT—
c) forms part of and modifies the Primary Tenancy Agreement between the parties; and
d) reduces the rent otherwise payable under the Primary Tenancy Agreement to the amount
   specified in Clause 5 of this AGREEMENT for the period specified in Clause 7 of this
   AGREEMENT.

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5. Rent
The current rent payable by the tenant for the occupation of the rented premises in the Primary
Tenancy Agreement is:
(insert the amount of rent paid by the tenant before this AGREEMENT commences)

$               weekly / fortnightly / monthly (cross out whichever does not apply)
The parties agree that on and from the date of this AGREEMENT, the rent payable by the tenant for
the occupation of the rented premises will be:
(insert the amount of rent that the tenant and landlord agree for the occupation of the rented premises
– this should be less than the amount of rent currently being paid by the tenant)

$               weekly / fortnightly / monthly (cross out whichever does not apply)

6. Ongoing obligations in relation to rent
The parties agree that—
e) after the expiry of this AGREEMENT, the tenant(s) have paid the full amount of the rent owing
    under the Primary Tenancy Agreement during the period that this AGREEMENT applies to reduce
    that amount;
f) the expiry of this AGREEMENT does not revive any obligation to pay any amount of rent under
    the Primary Tenancy Agreement that exceeds the amount payable under this AGREEMENT for
    the duration of this AGREEMENT; and
g) rent payable after the expiry of this AGREEMENT (if any) is subject to the terms of the Primary
    Tenancy Agreement.

7. Period of this agreement
This AGREEMENT commences on:              /       /        (insert start date)
(This is either the date that the parties agree that a reduced amount of rent is payable, or the date that
the reduced amount must first be paid)

This AGREEMENT will end on:               /       /        (insert end date)
(This is the date that the reduced rent agreed in clause 5 will cease. This can be the end of the fixed
term tenancy, or for the period agreed between the parties)

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Step 3. Consumer Affairs Victoria – Rent Reduction Initial Assessment Form

Probably the biggest challenge for most tenants and advocates is understanding how to start the
formal process of “applying for a rent reduction” when a landlord is resistant to the request or they
are making inadequate offers.

To get a decision about a rent reduction, the tenant must FIRST apply to Consumer Affairs Victoria
(CAV) for “assessment” of the application – which will be a rent reduction application (effectively the
same as if an application under section 540 to VCAT).

All rent reduction applications must go through CAV to be assessed, even though all rent reduction
applications are considered to be “payment related” matters for the purposes of the regulations.
Accordingly, this should be immediately forwarded to the RTDRS and listed as a matter to be resolved.

As a systemic note, we have observed that on occasion CAV will try and facilitate some negotiations
in the first instance. While this may be welcomed by some, it is desirable to reduce any time delays in
the matter being referred to the RTDRS.

Consumer Affairs Victoria website

The Consumer Affairs Victoria (CAV) website is intended to cover all aspects of Emergency
Legislation, as many of the regular VCAT processes (including eviction) have been amended. The key
issue is that many people have independently tried section 1-3 below, and entry into the process can
be tricky for some people to find.

How to apply for a rent reduction?

CLICK THIS LINK – We have included the link here as we have received feedback from users that this
link is not easy to find on the CAV website.

http://forms.consumer.vic.gov.au/forms/crdf

    A. In the interim, to get things started, click on option 4 Dispute Resolutions services.

                                                      11

B. Then click “Rental Agreement or Dispute Form”.
   If for any reason a tenant clicks Rental Dispute Initial assessment, a list of application choices will be
   offered and “rent reduction” does not appeal as a listed type and the person should therefore select
   the “The matter is not included in the list” and that will take you to the right form to complete.

                                                   12

13

Next step on the webpage:

Step 2 – Your agreement or dispute

THE IMPORTANT BIT – TENANT STORY AND FINANCIAL CIRCUMSTANCES

[From VCAT Application]

Please provide as much information as possible about your situation.

                                                14

[EXAMPLE ONLY]

I have sought a rent reduction from my landlord. We have not been able to resolve the matter privately.

I have been offered a rent deferral but this is not acceptable to me.

I owed approximately $4,000 in rent, and lost my job on 1 April 2020. My rent is $2000 per month.

I am single with one child. I am on job seeker currently receiving $1162 per fortnight, soon to be reduced to $862
per fortnight from 25 September 2020.

DailyThe
      income
         abovewill be $61.57.
                does  not haveMyto currently daily rent
                                   be as detailed.      is $65.57
                                                    A simple      per day.that
                                                              statement     I amyou
                                                                                 seeking a rent reduction
                                                                                    are seeking a rent    of 75%, ie.
$470reduction
      per month   = 25%   income as rent
               is sufficient. However, the more information you can provide at the early stages, the
    more efficient the resolution might be if the parties cannot come to an agreement.
I have nowhere else to go with my child. I need to sustain the tenancy for as long as possible.

I am also seeking that my rent be retrospectively adjusted to this rate as at 1 April 2020, and for the rent
reduction agreement to be for the duration of the scheme, or until my income significantly changes.

I am seeking a rent reduction under section 540 of the RT Act. I would like to be referred to the RTDRS
immediately, and respectfully do not require CAV to advocate for me upon the initial assessment.

See attached Evidence:
a. Separation certificate from work
b. Redacted bank statements.
c. Completed draft - VCAT Financial circumstances statement in support of a rent reduction application

                                                        15

Accessibility: People must have a valid email to make the request via this form, and if the tenant or landlord
has any additional requirements such as a language, or disability, this should be included in the outline of the
situation as well, and flag what adjustments are required. Interpreters in the RTDRS are free.

                                                       16

[inserted here] Summary of details from last two CAV pages.

                                       17

Next Step:

Once you have your CAV Referral Number - you are on your way!

An agent from the Residential Tenancies Dispute Resolution service should be in touch with both
parties to confirm the application and foreshadow the types of documents that parties should have
prepared and to scope the general attitude of parties in relation to resolving the dispute about the
rent reduction.

                                                18

Step 4. Preparing for Residential Tenancies Dispute Resolution

Guide to conciliation at the Residential Tenancies Dispute Resolution Service

It will take some time for the RTDRS to contact the parties and for a hearing date to take place.
Currently, all contact is via telephone. If a tenant has any special needs ensure that arrangements are
made. The dispute resolution can be a mediation style or negotiation going between the parties, or if
this is not productive, the Chief Dispute Resolution Officer (CDRO) is able to make a binding decision
about the rent reduction. In some circumstances, they may refer the matter to VCAT for a final
determination. Tenants Victoria advocates that the RTDRS should make the binding resolution
orders and then parties can seek the referral to VCAT if they are still not satisfied.

1. Rent reductions – How much should the rent be reduced?

One of the core questions everyone is asking is “how much should or can be rent be reduced by?”

To date, there is still no published decision from VCAT to give guidance about how section 540 is
actually to be applied. The vast majority of reductions take place at RTDRS.

2. Rent Reduction Amount - Hardship Considerations by reference to Social Housing

Based on the rate of rent charged in Social Housing, Tenants Victoria believes that a range from 25%-
30% of income (pre-tax, if income is taxable) should be considered as the appropriate threshold of
rent as a matter of sustainability on household income where income has been reduced.

It is important to note that section 540 does not have a clear test with respect to “rent reductions”,
only that of protecting a tenant from eviction due to the accumulation of rent arrears which could not
be paid without suffering severe hardship (see, ss 549(2)(i)).

As a note, public housing rent is assessed at 25% for income, with a few exceptions such as Family Tax
benefits which are assessed at 15% rather than 25%. Social housing tends to charge 30% of household
income.

This is not binding but is a good indicator of the threshold of acceptable expenditure on rent.

It is however likely that the implied hardship test under section 540 may be more relative and
proportionate between the parties, rather than a pure focus on the tenant situation. Without
guidance from VCAT, or a Superior Court, or a change in the policy, it is difficult to speculate.

3. Rent Reduction Preparing Documents

Evidentiary requirements should be considered relatively high. The reduction requested needs to be
substantiated. In some cases this may be quite simple, in other situations, such as tenants who run a
business, this may be more complex.

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We recommend providing the following documents to show evidence of income reduction: Centrelink
documentation, pay slips, letters from employers, severance certificate and bank statements
(redacted).

As a matter of consistency and convenience, Tenants Victoria encourages tenants to complete the
VCAT Financial Circumstances Statement by Tenant form (to the extent they feel comfortable), and
also send a copy to the landlord and request that they complete the same in preparation for the
RTDRS.

While this is not intended to be a form for the landlord, the rent reduction process is not a “one-way
consideration”. Accordingly, Tenants Victoria encourages people to advocate for mutual financial
transparency – meaning that a landlord objecting to a rent reduction should be providing the same
level of financial transparency about their own financial situation.

You can raise this with the Dispute Resolution Officer along with evidence of having made the request
prior to the hearing. This may reduce any delays in the RTDRS making the decision, or demonstrate
that the landlord is acting in “good faith” or not.

See the form here: https://www.vcat.vic.gov.au/documents/forms/financial-circumstances-
statement-support-rent-reduction-application

Rent Reduction - RTDRS Policies and Guidelines

The RTDRS is required to have policies that assist them in approaching matters consistently and have
consistent outcomes in the event that parties cannot reach agreements.

Generally, decision makers should follow their Guidelines and Practice Directions. In the event of gross
failure, or derogation, seek legal advice immediately.

The CAV Guide to conciliations can be found here:

https://www.consumer.vic.gov.au/library/publications/housing-and-accommodation/renting/guide-
to-conciliations-at-the-residential-tenancies-dispute-service.docx?la=en

General Practice Directions

There are more detailed operation directions to ensure the scheme operates efficiently and
effectively. These are compiled in 14 pages annexed to this kit.

The following clauses of the Practice Direction need to be made aware of:

Clause 6 – States that Superannuation or consideration of early access to superannuation is not a
relevant consideration to the rent reduction.

Clause 7 – Rent deferrals are an available option that may be encouraged (and in this case it is
important to be prepared to resist this and set out the reasons). Rental payment plans can also be
ordered – even where the person is just seeking a rent reduction. In this case ledger history and rental
payment patterns could become relevant.

Clause 8-10 – If a party to a dispute wishes to have a support person or representative, this may be
granted with the approval of the RTDRS officer. If this is refused, please contact Tenants Victoria –
especially if the landlord is represented.

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Clause 12 – Consideration of other schemes such as land tax incentives and rent relief may be relevant
considerations. Also, encourage parties to consider other options such as a release from the tenancy
(but be careful if no arrangements have been made prior to reaching an agreement).

Clause 20 – If the Orders cannot be resolved by means other than making a binding resolution order,
written reasons to that effect and the final binding resolution Order must be made.

Further documents in relation to how the rent reduction should be determined.

Notably, this Guideline above is silent on the issue of retrospective adjustments of rent and the
impact on any extant rent arrears. Tenants Victoria is of the opinion that retrospective rent
reductions are possible.

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Step 5. Going to VCAT from the RTDRS

VCAT Contact details - Email - renting@vcat.vic.gov.au       Phone - 1300 01 8228

There is no formal “appeal” mechanism to orders made within the RTDRS. Typically, referrals will be
made to VCAT when the RTDRS has considered the parties have not acted in good faith and it is not
appropriate for the RTDRS to make a binding resolution order, or that a party is failing to comply with
the agreement, or binding resolution Order.

The RTDRS can hear variation, extension or revocation applications but it appears clear that when
parties are not respecting the decision and authority of the RTDRS then such matters will be referred
to VCAT – this also applies to Rent Reductions issues.

In order to apply to VCAT (once you have a CAV referral number), you will need the additional Order
from the RTDRS indicating that the matter is no longer appropriate for the RTDRS and that you have
been permitted to apply to VCAT.

Unless informed otherwise by the RTDRS officer, you will need to complete the Standard VCAT
Application process and apply under section 540 of the RT Act. It’s advisable to attach the same
financial information that was used in the RTDRS.

IMPORTANT: The disclosure of materials, and things said and done in the RTDRS are subject to
regulation 29 of the RT Emergency Regulations and section 499 of the RT Act.

Direct Link to Paper Application can be found here, or you must go through the VCAT website
process to get to the OnlineHub (see screenshots at the rear of this document)

Note that the application process online can be difficult for some people.

It is important to be aware of any barriers in language, culture, or health that may make it difficult for
someone to apply. For the full set of step by step screenshots of what to click and where (see the rear
of this document)

Reminder on Jurisdiction

Due to a technical issue, tenants with landlords who live in NSW, TAS, QLD, WA, SA may have
difficulties in having the matter determined. This issue does not appear to effect ACT or NT, nor does
it apply to corporate entities. For more information see:

https://www.vcat.vic.gov.au/news/court-decision-affects-kinds-cases-vcat-can-decide

https://www.supremecourt.vic.gov.au/case-summaries/judgment-summaries/meringnage-v-
interstate-enterprises-pty-ltd-ors-2020-vsca-30

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Complete VCAT “Application Details” when seeking a Rent Reduction
The main complexity might be the “Applicant details”. Below is an example:

What do you want VCAT to do?

This section tells VCAT and other parties what Orders you are wanting VCAT to make. Quote the
section number of the Residential Tenancies Act 1997 you wish to apply under. You must give

 Section 540 - Residential Tenancies Act 1997 - Rent Reduction

complete details about your claim so that the respondent is able to understand why you have made
the application. If compensation is sought, you must set out each amount that is claimed. If you do
not provide enough information your case may be dismissed or adjourned. If you need more space,
print clearly on a separate piece of paper and attach to this application.

 I have sought a rent reduction from my landlord. We have not been able to resolve the matter
 privately, and have been unsuccessful at the RTDRS.

 I have been offered a rent deferral but this is not acceptable to me. I owed approximately $4,000
 in rent because I lost my job on 1 April 2020. My rent is $2000 per month.

 I am single with one child. I am on job seeker currently receiving $1162 per fortnight, soon to be
 reduced to $862 per fortnight from 25 September 2020.

 Daily income will be $61.57. My currently daily rent is $65.57 per day. I am seeking a rent
 reduction of 75%, i.e. $470 per month = 25% income as rent

 I have nowhere else to go with my child. I need to sustain the tenancy for as long as possible.
 I am also seeking that my rent be retrospectively adjusted to this rate as at 1 April 2020, and for
 the rent reduction agreement to be for the duration of the scheme, or until my income
 significantly changes.

 I have been referred to VCAT by the RTDRS (Referral and previous RTDRS orders attached)

 See other supporting documents attached:
 a. Separation certificate from work
 b. Redacted bank statements.
 c. Completed draft - VCAT Financial circumstances statement in support of a rent reduction
 application (below).
 d. Centrelink paperwork

  I have requested the landlord to complete the Financial Circumstances Form but they have
  refused. I don’t believe it is fair that I have to disclose this information and they don’t. I know it
  is my application and I must prove my right to a rent reduction, but I believe the Tribunal should
  be fully informed of both party’s financial situation under section 540.
www.vcat.vic.gov.au/documents/forms/financial-circumstances-statement-support-rent-
reduction-application

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Example Only:

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VCAT Hearing for Rent Reduction
The VCAT hearing will be conducted by phone unless there are significant reasons to justify a video
conference (which is possible).

The most critical aspect of preparing for a rent reduction application is, unfortunately, “the
maths”.

There will likely be a lot of new financial information for both parties.

Tips on VCAT Orders:

    ●   Consider the basis of how the provision should be interpreted with respect to the purpose of
        the legislation
    ●   VCAT is not bound by the Practice Directions of the RTDRS, nor the decision of the RTDRS
        itself
    ●   Make an argument as to appropriate threshold and relative rights, including the Charter of
        Human Rights and Responsibilities Act 2006 (Charter), and the meaning of hardship. See
        Balasis v Williams & Ors [2012] VCAT 706 @ [45], and Brookfield Multiplex Ltd v Owners
        Corporation Strata Plan 61288 [2014] HCA 36 (8 October 2014) at [126]
    ●   Know that previous agreements may be relevant considerations but are not binding
    ●   You can seek a rent reduction if the tenant realised the consequences of the deferral
        arrangement (this will be a matter for VCAT to determine)
    ●   Seek a retrospective application of the rent reduction
    ●   Ensure the arrears are identifiably COVID related or exacerbated in some way (directly or
        indirectly due to COVID)
    ●   Ensure that the Tribunal treats both parties similarly and takes a probative approach to both
        sides’ financial situations (remember it is a VCAT proceeding and witness summons for
        documents can still be served and require the landlord to provide certain information –
        noting any costs considerations)
    ●   Consider if you want the VCAT Order to be renewed, or any event that triggers the matter
        going back to VCAT
    ●   Ensure the tenant disclosed information is consistent and is not being fraudulent or
        misleading in any way
    ●   As always, you have a right to request written reasons for a decision under section 117 of
        the VCAT Act. This may be published in the public domain. This may mean that large
        amounts of personal and financial information about the parties are available to the
        public. The request must be made during the proceeding.
    ●   Given the scope and lack of criteria set out in section 540 in relation to rent reductions, it
        may be difficult to identify if there are any appeal grounds in relation to how an Order has
        been made. Appeals from VCAT go to the Supreme Court, which is a costs jurisdiction.
             o For more information, see the following and seek legal advice:
                 https://www.supremecourt.vic.gov.au/going-to-court/representing-yourself/appeal-
                 or-review-a-decision/appeal-a-decision-made-by-vcat

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TIP: Retrospective rent reductions.

Very few people like doing mathematics under pressure – especially Tribunal Members under
pressure. So be prepared!

If you are seeking a retrospective rent reduction:

Firstly, you’ll need to argue that it can be done.

Secondly, you have to argue that it should be done.

Thirdly, you’ll have to argue the hardship balance of when, why and (importantly) how it should
be applied.

You should have a scale of payment to ideally reflect the previous COVID 19 related arrears to be
disposed of and a reasonably structured balance of any debt that accrues slowly and could be
payable under a section 331 order. Accordingly, there may be a lot of speculation about the future.
This will be a difficult issue for the Tribunal, most easily remedied, by allowing the parties to renew
proceedings, or making the Order of limited duration.

Example VCAT Reduction Order

The following is a speculative Order as very few matters for reductions proceed to VCAT.

However, if retrospective rental reductions are possible, we would expect to see many more
applications referred to VCAT as Part 16 approaches its repeal date because of the imminent risk of
eviction for many Victorians.

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Workings and Mathematics behind this Example Order

   1. The rent is reduced to a rate of $650 per month (for the avoidance of doubt, reduced by
      $1,350 per month).

   2. The rent reduction is to apply retrospectively from 1 June 2020. (Noting that retrospective
      rent adjustments to 1 April 2020 would place the tenant well ahead in their rent and not be
      reasonable given the rate of reduction).

   3. As a consequence of 1 and 2 above, the rent arrears now is (123 days @ $21.31 = liability for
      $2,621.13 for this period).

   4. The arrears was previously $4,582.00 and must now be recalculated by the landlord. (For the
      period between 1 June 2020 and 1 October 2020 – the previously chargeable rent would
      have been $65.58 x 123 days = $8,065.57. The tenant had paid $8,065.57-4,582.00 =
      $3,483.57. This amount is then applied against the reduced rental rate = 163 days. This
      places the tenant a month and 10 days ahead – but noting that the current proportionate of
      income spend on rent is $21.31 (daily rent @ $650pcm) / 61.57 (old daily rent @ $2000 pcm)
      = 35% of household income on rent.

   5. The landlord must issue a new ledger to the tenant.

   6. The landlord or tenant may renew these proceedings by writing to the Registrar. The
      proceeding may only be renewed if there is a significant change in the financial
      circumstances of a party, and that there is proper evidence or basis for bringing such an
      application.

   7. These Orders are of immediate effect and will remain in effect until section 540 of the
      Residential Tenancies Act 1997 is repealed unless otherwise ordered by the Tribunal.

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APPENDIX

                Step-by-step @ VCAT for Rent Reduction in a Tenancy (website)

      Go to VCAT Homepage (www.vcat.vic.gov.au )

      Click here:

      You should already have your CAV Referral Number, so you can click here:

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*

Note: Once Part 16 is revoked, rent reduction application will no longer be able to be made.
This is expected to be 28 March 2021.

For more information, see Fees.

Scroll down on next page:

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*You can save your application and come back to it later if needed.

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Make sure you complete the rest, and get confirmation

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