Melbourne’s rental dispute system cracking under Covid-19 stress

The process for dealing with residential tenancy disputes in Melbourne is cracking under the weight of Covid-19.   

With less than one month to go in the original 6-month moratorium announced by the Andrews’ government there is a backlog of 4,000 rental cases at the Victorian Civil and Administrative Tribunal (VCAT) and nearly a thousand disputes still to be resolved through the Dispute Resolution Centre Victoria (DSCV) process.

Consumer Affairs Victoria (CAV) has referred more than 8,700 matters to VCAT and only about half of those have been finalised.

More cases are being referred weekly to the Tribunal than are being listed for hearing.

Gil King CEO of REIV said:

“Even when VCAT makes an order they are often not enforceable until after the end of the moratorium period, which is now a further three months away. This means that property owners are left in an untenable situation where they cannot protect their investment.”

“It is totally unacceptable to have a system that was meant to assist in negotiations has thousands of unresolved disputes.

Leah Calnan President of the REIV explains:

“Many tenants are getting a free ride knowing that they cannot not be evicted. The system must be fair to all – owners and tenants.”

“The bias in the system is plain to see with the balance of power clearly in the favour of tenants knowing they cannot be evicted until the new year.”

The pressure on the Tribunal Members to get through the ever-increasing caseload is creating a bias in the system with reports that property managers acting for landlords are being told they cannot speak during the hearing due to time limitations.

The DSCV is not faring much better with more than a third of the 2,800 cases referred to it by CAV still active.

To their credit, they have recently increased the number of dispute resolution teams to deal with the backlog, but that is too little too late.

The Real Estate Institute of Victoria warned government in May this year that resources devoted to dealing with the dispute cases were inadequate.

With the extension of the moratorium by more than 3 months to the end of the year, these backlog numbers are likely to get much worse with many cases still unresolved at the end of the moratorium.

Many tenants simply refuse to provide information or even communicate with their landlord or agent to expedite a speedy resolution.

Nearly 32,000 rent reduction agreements have been lodged with CAV, with tens of thousands more being worked out by mutual agreement, meaning they do not have be recorded at CAV. Some opportunistic people are taking advantage of this system overload by simply refusing to pay rent or negotiate resulting in massive arrears in rent being borne by the property owner with little likelihood of it being repaid.

The REIV has called on the government to properly resource VCAT and DSCV and make it mandatory for tenants to provide evidence of their Covid-19 related financial hardship.

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About Leanne Jopson Leanne is National Director of Property Management at Metropole and a Property Professional in every sense of the word. With 20 years' experience in real estate, Leanne brings a wealth of knowledge and experience to maximise returns and minimise stress for their clients.