New ‘loser pays’ tribunal legislation has been lauded by property managers as an excellent move, despite outrage from the Tenant’s Union.
According to head of property management for Jellis Craig Bennison Mackinnon Sam Nokes, a new model where the loser pays for the tribunal will only benefit property managers.
“We get some applications where it’s obvious the tenant is taking advantage of us because it’s free. To have some repercussions for doing that is quite a good thing because it will hopefully stop people taking advantage of what’s a very fair system,” he told Residential Property Manager.
According to the Tenant’s Union of Victoria (TUV), only 20 per cent of tenants actually turn up to hearings.
“Only one in 10 are bothering to show up and that’s because they know they don’t have to fork out any money for it," TUV said.
“One of the strategies people use to stay in properties for as long as they can is stall. They have a notice against them, they won’t do anything or talk to anybody, and they will ignore you during the whole process and won’t go to the hearing. Then they’ll apply for a review after you’ve received an order.
“By this time they’ve had another month or longer in the property essentially rent-free because they can only lose their bond.”
However, the TUV believes the changes will turn the tribunal into a court system, which tenants will find daunting to use.
“The Bill represents a significant departure from the initial purpose of VCAT: to provide a low-cost and efficient means of dispute resolution where there is a presumption that parties bear their own costs,” it said.
Mr Nokes also believes the changes will stop owners from abusing the system.
According to VCAT, 93 per cent of applications for hearings have come from landlords.
“There are a lot of owners who take advantage of that too. They say ‘We’ll take them to VCAT for that’, even if they know they’re going to lose to hopefully bully the tenant into submission," said Mr Nokes.
“As property managers, we don’t make up applications for the sake of making applications – we do it so we can take action.
“We want the tenant to be represented; we always want the tenant to show up because then they can’t have a review and the matter is dealt with once and once only.”