Navigating VCAT

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A Balanced Perspective for Rental Providers and Renters

17 May 2024

The Victorian Civil and Administrative Tribunal (VCAT) plays a crucial role in resolving disputes between rental providers and renters. In recent times, VCAT has undergone significant changes, with newer members bringing a more approachable atmosphere to the proceedings. While this is a welcome development, it is essential for both parties to understand the current landscape and best practices when engaging with VCAT. 

One noteworthy improvement is the reduced wait times at VCAT hearings. The tribunal has made significant strides in catching up with the backlog caused by the COVID-19 pandemic, although some cases remain outstanding. This increased efficiency is a relief for all involved, as it allows for a more timely resolution of disputes.  

When it comes to negotiating between rental providers and renters, VCAT appears to favour attempts at reaching an agreement before escalating the matter to a formal hearing. This approach can lead to potential advantages in the final decision, as it demonstrates a willingness to cooperate and find a mutually beneficial solution.  

However, it is crucial for rental providers to be well-prepared when claiming damages. In order to be eligible for compensation, any invoices pertaining to works completed prior to the commencement of tenancy must be provided. For instance, if the property has been painted within the ten years prior to the tenancy, the invoice for that work must be submitted to VCAT for them to calculate the payable amount, assuming the damage is proven.  

It is important to note that VCAT calculates depreciation using a compounding method. This means that not only is a 10% depreciation applied each year, but the item's value also decreases over time, with the 10% being calculated from the diminishing amount. While this may seem harsh, it is a firm rule that is applied consistently, even in cases of clear and willful damage. 

Given these considerations, it is often advantageous for both rental providers and renters to explore negotiation options outside of VCAT when possible. While it is difficult to confirm definitively, reaching an agreement through negotiation may lead to a better outcome for both the applicant and the respondent. It is worth carefully considering this route before proceeding to the courts. 

Recent case outcomes provide valuable insights into VCAT's decision-making process. In one instance, a four-year-old carpet with a replacement cost of $5,500 was found to have been damaged by the renters. VCAT awarded $1,700 to the rental provider after applying the depreciation calculator, which considers both the annual depreciation and decreasing value of the item over time.  

Another case highlights the potential risks of pursuing a claim through VCAT. A renter offered $1,200 towards rent and repairs, while the owner claimed around $6,000. The owner decided to try their luck at VCAT but was ultimately awarded only $945 and had to pay for the VCAT appearance, resulting in a significantly lower amount than if they had settled. 

Lastly, it is worth noting that VCAT will not award funds for work that has not been completed. In one case, an owner attempted to claim for quoted work that had not been carried out. By providing receipts for hardware and painting expenses related to work completed by the owner, they were able to recover a portion of the receipted amount. 

Navigating VCAT requires a balanced approach from both rental providers and renters. By understanding the best practices and potential outcomes, both parties can make informed decisions when resolving disputes. While VCAT has become more approachable, it is still essential to be well-prepared, consider negotiation options, and weigh the potential risks and benefits before proceeding with a claim.