Is VCAT Good for Landlords?

It’s every landlord’s worst nightmare: having to apply to VCAT for reparations on their property, or being dragged there by a disgruntled tenant.

VCAT (aka the Victorian Civil Administration Tribunal) is a body that hears and decides upon civil and administrative legal cases via mediation, negotiation and hearings – which include those between landlords and tenants. In this Infolio Property Advisors blog, we explain the complexity of running a successful case at VCAT … and why it is critical to have an experienced property manager on your side.

When you’re incensed at the mistreatment of your investment property or you’re dealing with a tenant who is failing to make good on their side of the bargain, it’s easy to see ‘red’ and want to go straight to VCAT. Before you do so, however, think carefully about the pros and cons of putting your matter in the hands of a sitting member.

The fact is – VCAT attendance is rarely in the landlords’ best interest – in our experience, rulings tend to lean in favour of the tenant. That’s why VCAT attendance should really be considered a last option for resolution after all other pathways of negotiation have been exhausted. When it comes to negotiation, avoiding VCAT is the aim – and this can only be achieved when you’re supported by an experienced property manager who really knows their stuff and works to mitigate losses, focusing on resolving the matter prior to it being heard. Proactive prevention is much better than cure when it comes to property management issues!

Preparing for VCAT is no mug’s game. It’s time-consuming for even the most well-versed property manager and requires substantial collation of relevant information, photography, invoices and condition reports pertaining to the Hearing. In the case of claiming funds from a Bond when a tenant vacates, the following documentation would need to be presented at minimum.

• The original condition report with photos.
• Post-vacate images featuring photos of the issue contested.
• Invoices of the works done (VCAT in most cases will not accept quotes and won’t pay out accordingly).
• Information about when the raised issue was resolved in the property (including proof). VCAT depreciate in line with ATO legislation. For example, should carpet and painting be over seven years old, a landlord wouldn’t be entitled to any compensation.
• VCAT feel floorboards “should be fit for purpose” so it is rare that compensation is awarded to any landlord for floorboard damage.
• A VCAT hearing can take hours and often the listed hearing time is not when a property manager walks into the courtroom.

We have noticed a growing trend of tenants increasingly asking for compensation from their landlord. This is influenced by a variety of factors, including:

• Advice from Consumer Affairs Victoria
• The Tenants Union website and advice
• Cost of living pressures
• Tenants’ lifestyle expectations
• The age of technology and having more access to information concerning leasing
• The influence of social media

When all is said and done, landlords need to consider more than simply the cost of their property management fees upon appointing an agency to care for their asset. As this blog highlights, an experienced property manager has the skills to negotiate effectively with your tenant should a potentially costly disagreement arise – keeping you out of VCAT, minimising losses and supporting your financial position. Next time you’re worrying over management fees, consider the additional value of negotiation experience and an in-depth knowledge of VCAT proceedings – for they’re the qualities of a property manager you want to work with.