This information is a guide and should not be used as a substitute for professional legal advice.

Preparing to defend your bond at VCAT

Many bond applications to the Victorian Civil and Administration Tribunal (VCAT) by rental providers (landlords) are about cleanliness and damage. This guide can help you prepare for a hearing if the rental provider has applied to VCAT for your bond for these common reasons.

Fair wear and tear

If the rental provider claims there is property damage, VCAT must decide whether this is damage or just fair wear and tear. For example, if the carpet has worn down over time by people walking on it, it is fair wear and tear and not damage. The best way to check the difference between the two is to think about normal use. If things wear out with normal use this is most likely fair wear and tear. If the rental provider wants to replace things that have worn out through fair wear and tear, they have to pay for it themselves. The money should not come out of your bond.

Depreciation

The rental provider cannot claim the full cost of replacing something that was not new when it was damaged. VCAT will allow for ‘depreciation’, which means the older something gets, the less it is worth.

The Australian Taxation Office (ATO) produces an annual ‘Rental properties’ guide for rental property owners with information on depreciation over time, including a table of common household items and their depreciation life span. You can use this information to work out how long something is worth any money. For example, carpets have a life span of 10 years, so the carpet declines in value by 10% every year. If the carpet is over 10 years old, the value is zero. Obtain a copy of the Rental Properties guide for the current year from the ATO website.

Cleaning claims

If the rental provider is claiming costs for cleaning, can they prove the following?

  • Have they suffered financial loss?
  • Can they prove they have spent the money they are asking for on cleaning the property?
  • If they have, is it because you breached the law or your lease? Is the amount claimed reasonable?

The law says you only need to leave a property ‘reasonably clean’. The rental provider or agent cannot ask you to do more than the law says, even if this is in your tenancy agreement. For example, even if your tenancy agreement says you need to steam clean your carpets when moving out, the law does not require you to do this. If you have a steam cleaning term in your lease, you can argue that it is not valid under the law.

Take photos when you move in, and when you move out, so that you have evidence of the condition of the property at both times. You should also look at the condition report from when you moved in. By law the rental provider has to make sure the property is reasonably clean on the day you move in. Any claim made to VCAT needs to take into consideration the cleanliness of the property at that time. You cannot be asked to leave the property cleaner than you when you moved in.

If you agree that the rental provider is entitled to part or all of your bond for cleaning, but believe the amount they are claiming is unreasonable, you will need to provide evidence of this. For example, you could contact cleaning companies to see how their rates compare to the rental provider’s claim.

Damage claims

The rental provider can only claim costs for damage where it was caused by you breaching your lease or the law.

The law says you need to take care to avoid damaging the property and take reasonable care to avoid damage to any common areas. If the damage is due to fair wear and tear through normal use, this is not your responsibility. It is the rental provider’s responsibility to pay for repairs.

It is also not your responsibility to pay for damage caused before you moved in or after you moved out. If the rental provider is making a claim on your bond for damage you did not cause, you should provide evidence of the state of the property at both the start and end of your lease, such as condition report, photographs and witness statements.

If the rental provider is claiming costs for damage they should have evidence that they suffered financial loss or property damage.

Amount claimed for damage  

If you agree that the rental provider should get part or all of your bond for damage that you caused, the amount they are claiming needs to be reasonable. The rental provider should also have proof that they spent the money on repairing any damage that they are claiming for. If you believe that the amount is unreasonable, you will need to show evidence of this. If the rental provider is claiming the cost of repairs or replacement of property or fixtures, you should get quotes from shops or tradespeople to show that the rental provider is trying to claim too much.

Check the age of the item the rental provider is claiming for to make sure depreciation is included, so that you can work out its true current value. The rental provider cannot claim the full cost of replacing something that was not new when it was damaged. The rental provider’s claim must be in proportion to the damage caused. For example, they cannot claim for the cost of repainting the entire house when the paintwork is damaged in just one room.

Example: claim for damage

The rental provider applies for the full replacement cost of brand new, high quality carpets throughout the entire house because there is a small stain on the carpet in one of the rooms, which was caused during the tenancy. The rental provider is trying to justify their claim by saying if they have to replace the carpet in the one room where the stain is, then the new carpet in that room won’t match the carpet in the rest of the house, so the entire house needs to be re-carpeted.

At the time the renters moved in:

  • the property was about 20 years old
  • the carpets were the original carpets from the time the property was built
  • the carpets did not appear to be of a very high quality as they showed signs of wear in high traffic areas and were worn through in some places
  • there were several small pre-existing stains on the carpets throughout the house
  • the condition report makes reference to the stains and marks due to wear that were there before the renters moved in
  • photos taken by the renters and the agent also show the stains and marks were there before the renters moved in

At the time of the rental provider’s application:

  • the original carpet is still in the property – nothing has been replaced
  • the property has been relet at the same price

To prepare their case, the renters need to answer these questions:

  • has the rental provider suffered property damage? Or is the state of the carpets due to fair wear and tear?
  • has the rental provider suffered financial loss?
  • if they did, is it because the renters breached their lease or the law?
  • is the amount reasonable?
  • has depreciation been included to get the true current value?

Property damage

The small stain caused during the tenancy could be considered property damage if it is not wear and tear from normal use. For example, it might be wear and tear if it is not a stain, but rather a mark visible due to the carpet wearing through from normal use.

Financial loss

  • Even if there is property damage, the renters can argue the rental provider has not suffered any financial loss as a result of the stain because:
  • they have not spent any money changing the carpets
  • they have been able to relet the property for the same price, and
  • the carpets have no financial value due to their age as they have fully depreciated – The Australian Taxation Office guide lists carpets as having a 10-year life. Go to the ATO website for a copy of the current ‘Rental properties’ guide.

Is the amount reasonable?

The renters can also argue that the rental provider’s claim is not reasonable because:

  • the claim is not in proportion to the damage caused and that it is unreasonable to ask for the carpets to be replaced throughout the entire property because of a small stain in one room
  • there are methods other than replacing the carpet that could be taken to deal with the stain, such as cleaning or repairing the quality of the existing carpet is less than
  • the quality of the carpet the rental provider is claiming for
  • the carpets were old, stained and worn before they moved in, and should be replaced as part of the rental provider’s duty to maintain the property in good repair, regardless of any stain left during their tenancy

Collect evidence for VCAT

The renters should collect evidence to support their defence, such as the condition report, entry and exit photos, and quotes for cleaning or repairing the carpet. They can even include quotes for new carpets of a similar quality to the existing carpets to show what the rental provider is asking for is excessive and not reasonable.

It will be up to VCAT to decide if any of the bond should be paid to the rental provider. Even if VCAT decides that the renters have some liability for property damage, a well-prepared defence can help reduce the amount the rental provider is claiming down to an amount that is reasonable.

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