The legalities of rental payment systems in Victoria have been thrown into question after a tenant successfully took his landlord to tribunal over additional charges to his rent payments.
Michael Palmer began renting a property owned by James Hutchinson and leased by Ray White last October for $2,303 a month.
After several months of renting the property, Mr Palmer noticed that on top of his monthly rental payments, he had been charged an additional $1.65 a month.
The 41 year-old subsequently took Mr Hutchinson to the Victorian Civil and Administrative Tribunal (VCAT) seeking a refund for eight payments of $1.65 and damages of $3,355.35.
The tribunal heard that at the time of signing the lease, Mr Palmer had a signed an agreement to use the IP Payment Gateway system to make direct debit payments. Under the terms and conditions, tenants who used this system agreed to pay a non-refundable transaction fee of $1.65.
In his ruling, VCAT deputy president Ian Lulham ordered Mr Hutchinson to repay Mr Palmer $13.20 and $38.80 in additional costs. However, the claim for damages was dismissed.
The case has opened the legality of the rental systems due to Victoria’s Residential Tenancies Act 1997. Under the legislation, 'a person must not demand or receive from a tenant a charge or indemnity for a charge in relation to the establishment or use of direct debit facilities for rent payments'.
As a result, Mr Lulham directed the matter to Consumer Affairs Victoria (CAV) for its consideration.
A spokesperson for CAV said it was currently reviewing practices of the property management industry more broadly.
“Should Consumer Affairs Victoria identify systemic conduct that breaches the Act, we will work with the industry to ensure compliance and pursue redress for any offending conduct identified,” Consumer Affairs Victoria stated.
A spokesperson for Ray White told Residential Property Manager the complaint had only gone to tribunal due to the large claim for costs being made by the tenant.
“The primary issue was not the reimbursement of the fees, which could have been settled at office level, but the outlandish claim for damages – a claim which the tenant had made clear he would pursue through a formal hearing at VCAT regardless," she said.
The spokesperson added that the network looked forward to seeking further clarification from CAV and meeting with them on the issue.