Residential tenancy disputes – protecting your rental property investment asset
In a competitive rental market, opportunity exists for residential landlords (‘rental providers’) to maximise their investment by way of rental return or by selling their rental property to realise its capital growth.
Many residential tenancies begin and end happily. However, following COVID-19 tenancy relief measures and increasing economic pressures some rental providers and their professional agents are experiencing difficulties in managing their tenancies. Problems often arise when a rental provider seeks vacant possession of the property and the tenant (‘renter’) is unwilling to leave.
Residential tenancy relationships are regulated by the Residential Tenancies Act 1997 (Vic)(RTA). Changes to the RTA in March 2021 designed to ensure fairness in the tenancy relationship have arguably introduced a regulatory framework geared heavily in favour of renters.
The RTA contains important safeguards for renters against unscrupulous rental providers or managing agents. However, the need for strict adherence to technical regulatory processes and timeframes can give rise to inadvertent errors on the part of rental providers or their managing agents when seeking to validly exercise the rental provider’s rights under the RTA. Such errors can result in significant expense, delay and exposure to legal liability for the rental provider and other potentially affected parties (for example, a third-party purchaser of a rental property sold subject to vacant possession).
For example, a notice to vacate can only be issued to a renter on certain statutory grounds. It must be carefully drafted, served and contain the necessary notice period to satisfy all legislative requirements. Failure to do so will likely result in the notice being deemed invalid if challenged, giving rise to delay in securing vacant possession and an increase in the associated costs to the rental provider.
Until recently, rental providers living outside Victoria were also placed at significant disadvantage as the Victorian Civil Administrative Tribunal (VCAT) (which usually determines residential tenancy disputes) was held not to have jurisdiction to hear disputes involving interstate parties following a decision of the Victorian Supreme Court of Appeal (Meringnage v Interstate Enterprises Pty Ltd [2020] VSCA 30).
Following stake-holder lobbying, legislation became effective in late November 2021 to close the legal loop-hole and give interstate rental providers a means of resolving residential tenancy disputes through the Magistrates’ Court of Victoria. Renters, rental providers, managing agents and Court staff are currently adapting to the new regime.
Managing agents are generally well versed and effective in terms of outcome and cost in acting for rental providers. However, sometimes the circumstances warrant the assistance and resources of solicitors with experience in the area to work together to support the managing agent and rental provider to secure the desired outcome when a residential tenancy dispute arises. Strategic thinking, attention to detail and the right advice can make all the difference in protecting your rental asset.
Amy Jenkinson
Special Counsel
T 03 5225 5236
E ajenkinson@ha.legal
Thomas Howell
Graduate Lawyer
T: 03 5226 8526
E: thowell@ha.legal
