Renters in Victoria, Australia, are confronted with a broken system that undermines the basic renter protections outlined in legislation. While certain laws exist to safeguard tenants, systemic issues render their enforcement ineffective, leaving renters vulnerable and struggling to retrieve their bonds. Even the limited rights granted by the Residential Tenancies Act fail to be upheld due to the flawed processes and practices in place.

This landscape has been made worse post-COVID, despite record taxation across the state (the highest in the country) – rental supply has decreased to a historic low, VCAT incompetence has extended to 2-year wait periods for a hearing, and no improvements have been made to prevent tenants from being exploited.

The Process to Get Bond Back: A Promise Unfulfilled

According to the Residential Tenancies Act, a claim to the Victorian Civil and Administrative Tribunal (VCAT) must be made within 14 days of the renter vacating the premises. Beyond this timeframe, the rental provider may still pursue a general compensation claim, but they cannot rely on the bond to ensure payment. Despite these provisions, renters often find themselves facing additional charges well beyond the 14-day limit. The inability of VCAT to have a simple screening of agents’ case applications now lead to renters waiting for years to have a hearing. From the RTBA’s point, instead of holding back the disputed amount (e.g. a $200 cleaning bill), their ancient systems will hold back the ENTIRE bond from the renter until the court hearing.

Agent Misconduct: Denying Renters’ Rights

Another critical aspect of renter protection is the opportunity to attend the final inspection. Section 35(5) of the Tenancy Act clearly states that renters should be given the chance to participate in the inspection. However, in many cases, agents bypass this requirement, denying renters their right to address any potential issues or discrepancies before the bond is released. This violation of renters’ rights further exemplifies the system’s failure to ensure fair treatment and transparency.

The Flawed System: Where Protections Collapse

We were contacted by a renter who shared a story worth exposing – dealing with Jun Zheng from Elite Real Estate, Melbourne CBD (Director & Officer in Effective Control). The tenant was not even given an opportunity to attend the final inspection and then slapped with a dubious cleaning fee more than a month later. Common sense dictates that this agent shouldn’t have been allowed to make a VCAT application, but they did by exploiting the loopholes that ignore the laws in place. Effectively blocking the tenant from claiming 100% of their bond (not simply the disputed amount). Agents like this know they don’t have a case (and generally don’t even show up to the VCAT hearing), but count on the harassment caused by a 2 year waiting period to extort more money from renters.

While some laws provide a semblance of protection, their effectiveness is severely hampered by the broken system. As previously mentioned, the VCAT process is often exploited by agents, who leverage it to cancel bond claims and prolong the resolution of disputes. This not only adds to the financial burden on renters, who must pay to defend their rights, but also perpetuates an unfair power dynamic that overwhelmingly favors agents. The Residential Tenancies Bond Authority (RTBA), despite acknowledging the existence of loopholes, is unable to intervene effectively, leaving renters stranded and without recourse.

The exploitation within the system becomes even more evident when considering the financial dynamics at play. Astonishingly, it doesn’t cost agents anything to lodge or withdraw a VCAT application, while renters are burdened with a minimum fee of $67.40. This stark contrast in costs creates an alarming power imbalance, enabling agents to exploit the system without bearing any financial consequences. The financial burden placed solely on renters further perpetuates the cycle of exploitation, leaving them at a significant disadvantage and impeding their ability to fight unjustified claims. This blatant disparity in costs highlights the urgent need for a fairer and more equitable process that does not place undue financial burdens on vulnerable renters.

A Call for Urgent Reforms: Restoring Balance and Justice

In the year 2023, with post-COVID migration and a scarcity of rental homes creating unprecedented challenges for renters, it is crucial to address the deep-rooted flaws in the system. The implementation of simple updates, such as enforcing the 14-day timeframe for VCAT claims and ensuring renters’ participation in final inspections, can significantly curtail agent misconduct and prevent the manipulation of the bond retrieval process. By closing these loopholes, the government can restore balance and instill some confidence in the broken rental system.

Furthermore, the financial burden placed solely on renters to defend their rights reveals a profound inequity within the system. It is imperative to reevaluate the cost structure, exploring alternative approaches that distribute financial responsibility more fairly between agents and renters.

Victoria, a state known for its high taxes, must not overlook the hardships faced by its renters. The government must take immediate action to address the systemic failures, fortify renter protections, and implement reforms that prioritize the rights and financial well-being of tenants. Only through these measures can renters in Victoria reclaim a sense of fairness and secure the return of the bond.