Rent reductions

New laws have established the Residential Tenancies Dispute Resolution Scheme (RTDRS). The Scheme provides a free service, conducted by telephone, and is part of the plan to assist tenants obtain a meaningful rent reduction even if the landlord doesn’t agree.

The service has been designed to help people communicate more effectively and to ensure that a fair, reasonable and just agreement is reached. If parties are not being transparent or fair, Orders can be made that balance the interests, and consider the circumstances, of both parties to sustain the tenancy wherever possible.

Any “payment related matters” such as requests for rent reductions or issues relating to rent arrears must go through the Residential Tenancies Dispute Resolution Scheme.

The first step is to contact the landlord or agent to try to reach an agreement about rent reduction.

If you need help to write to the landlord or agent, use one of our example letters.

Dear Landlord

Justice Connect’s Dear Landlord tool can help if you are struggling to pay rent during COVID-19. Answer a few questions and Dear Landlord will help find the best way forward, whether that’s drafting a rent reduction letter to your landlord, contacting Consumer Affairs Victoria to help negotiate a rent reduction, getting tips for mediation, appearing at VCAT, or ending a lease.

If you need help starting your rent reduction letter, just fill in the details in the below example letter so it’s ready for the landlord to sign. Make sure you keep a copy for yourself before you send it to the landlord or agent.

While agreements do not need to be registered with Consumer Affairs Victoria to be enforceable, the agreement does need to be registered so you can apply for the rent relief grant (if you are eligible).

If you cannot reach an acceptable agreement with the landlord, you can register your request for a rent reduction with Consumer Affairs Victoria, which should refer you and the landlord to the RTDRS for a mediation.

No. If the landlord or agent is not responding to your requests for a rent reduction, is delaying or blocking your request, is only offering a rent deferral, or is being difficult or unhelpful, register with Consumer Affairs Victoria as soon as possible. You should also ask for the reduction to apply from the time you first contacted the landlord, especially if the landlord or agent has caused delays.

We recommend you do not wait more than one week for a response from the landlord before registering with Consumer Affairs Victoria.

If you and the landlord cannot reach an agreement with help from Consumer Affairs Victoria, it will refer you, under the RTDRS, for mediation.

If it is believed the dispute can be mediated, you will be sent an email with the time and date of the mediation hearing and other important information. This may include an example of the types of agreement made during mediation, and a guide to the process.

Most importantly, they will explain the types of evidence you will want to put together to support your request for a rent reduction.

You will be assigned a case officer who will contact you before the mediation to make sure you are prepared and to talk about what to expect. They may ask you to provide extra information, such as evidence of your financial situation.

TIP: Before the mediation you should put together a realistic budget of all your expenses, debts and so on and work out how much rent you can afford.

The mediation will be a phone conference. You will be able to talk to the mediator and the landlord and ask questions. You will also be able to talk privately with the mediator if needed. The conference can be put on hold to give you time to consider any offers before deciding whether to accept or reject them.

TIP: Have all your paperwork and your budget in front of you during the mediation along with a calculator in case you need to do the sums on any offers made by the landlord.

If you and the landlord reach an agreement, the mediator will put it in writing during the mediation and give you and the landlord a copy.

A copy will also be given to Consumer Affairs Victoria so you can apply for a rent relief grant (if you are eligible).

If you cannot reach an agreement, the mediator is allowed to make a binding order that is fair, just and reasonable, or consider if the matter should be heard by VCAT (this is also free).

If it is decided that the matter should be heard by VCAT the mediator will give you a certificate with a reference number that you will need to include in your VCAT application.

You do not need to have a support person attend the mediation with you. However, if you want to arrange for a support person to attend with you, such as a lawyer or tenancy worker, translator or financial counsellor, you will need to let your case officer know as soon as practicable so that the conference call and contacts numbers can be arranged to include your support person in advance.

Even if you have a support person attending the mediation, it is important that you also attend the mediation.

If you still cannot reach an agreement after mediation, your dispute will be sent to the Chief Dispute Resolution Officer who will decide:

• whether to make an order for a rent reduction, or
• if you can apply to VCAT for orders to reduce the rent and/or enter into a payment plan.

For more information, see: Binding dispute resolution orders [CAV website].

Tenants experiencing hardship should NOT accept rent deferrals.

Important: You do not have to agree to have your rent delayed/deferred instead of reduced if this does not suit your financial circumstances. It is important that you do not end up with a rent debt that you may not be able to repay.

If the landlord only offers a rent deferral, or an arrangement where they don’t have to do things such as repairs or you give up a compensation claim, you should register with Consumer Affairs Victoria.

You should also register with Consumer Affairs Victoria where private negotiations are taking too long. We recommend you do not wait more than one week for a response from the landlord before registering.

A rent reduction ends on the date set out in your agreement. If you want an extension, you need to get a clear written agreement that extends the original rent reduction agreement to a new date.

If the landlord refuses to extend the agreement, you can register with Consumer Affairs Victoria to go through the rent reduction process again to see if the agreement can be extended, or if a new agreement can be made.

If you and the landlord agree to extend the agreement without going through the RTDRS we recommend you register the agreement with Consumer Affairs Victoria to record the intention of the parties.