The Notice of Proposed Rent Increase dated 2 August 2022 is invalid for failure to comply with the Residential Tenancies Act 1997 (Vic).

1. This is an application by a renter challenging a Notice of Proposed Rent Increase under s 46 of the Residential Tenancies Act 1997 (Vic) (RTA) seeking a declaration that it be set aside. The application came before me for hearing by teleconference on 17 January 2023. The renter represented himself and the residential rental provider (RRP) was represented by the RRP's agent, Terence Wu. At the end of the hearing, I reserved my decision to consider the matters raised by the parties. Regrettably, it has taken some time for these reasons to be completed, for which I apologise to the parties.
2. On 31 March 2023, after the hearing had concluded and the decision was reserved, the renter advised VCAT that he had vacated the rented premises on 25 March 2023, in response to a notice to vacate given to him on the basis that the property was to be sold. Despite leaving, the renter claims that the notice to vacate is invalid as the agent sought to bring new prospective renters through the property the day he was in the process of vacating. The renter sought to amend the claim seeking return of the bond and various amounts of compensation.
3. If the renter intends to pursue any of those additional claims he must do so by way of a new application as the tenancy has now terminated. Those new claims do not form part of the application in relation to the validity of the Notice of Proposed Rent Increase to which these reasons relate.

1. The rental agreement commenced on 25 September 2020. It was initially for a fixed term period of 12 months and then became a periodic tenancy.
2. The rent payable under the residential rental agreement is $1,521.00 per month and the bond is the same amount.
3. On 2 August 2022 the agent served a Notice of Proposed Rent Increase on the renter to the email address listed in the rental agreement as the address to which the renter consented to service of notices.
4. The renter objected to the proposed rent increase and requested that Consumer Affairs Victoria (CAV) investigate.
5. CAV investigated and provided a report dated 30 September 2022. That report found that the proposed rent increase from $350.00 to $480.00 per week was not excessive.
6. The renter disputed the CAV report and made an application to VCAT on 17 October 2022 within the time limits prescribed by s 46(2). Documents provided by the renter show that the relevant fee was paid the same day. Unfortunately, that application was not able to be located by VCAT, with the result that a second application on the same grounds was again made by the renter on 14 November 2022.
7. In the circumstances, it is appropriate that I exercise my discretion to grant extension of time under s 126 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) for the renter to bring the application to VCAT under s 46(2) of the RTA.

1. The renter disputes the Notice of Proposed Rent Increase, and also the CAV report. I must consider first whether the Notice of Proposed Rent Increase is valid. If it is invalid, then it will not be necessary to further consider the CAV report.

Is the notice of proposed rent increase valid?

1. The relevant subsections of s 44 of the RTA provide that a RRP may give a renter a notice of rent increase that must give at least 60 days' notice in the prescribed form of any proposed rent increase,[1] and that the notice may only provide for one increase.[2] It also provides that a rent increase in contravention of this section is invalid.[3] Additionally, the notice must contain certain information.
2. Section 44(3) of the RTA further provides that:

(3) The notice of a proposed rent increase must include -

(a) the amount of the rent increase; and

(b) the method by which the rent increase was calculated; [emphasis added] and

(c) a statement informing the renter of the renter's right under section 45 to apply within 30 days after the notice is given to the Director to investigate and report on the proposed rent.

1. Section 44 (1) says the notice of proposed rent increase must be in the prescribed form.
2. The prescribed form is in the Residential Tenancies Regulations 2021 (Vic) (Regulations). Regulation 21 says that the prescribed form is Form 5 in Schedule 1.
3. Form 5 in Schedule 1 Part A says:

The notice must include the method by which the rent increase was calculated. The rent increase cannot be greater than the amount calculated using this method.[4]

1. Form 5 also provides in Part B - Details, Clause 11, Proposed rent increase, that:

Method used to calculate rent increase [insert method, for example 'Consumer Price Index', used to calculate rent increase. Provide details of the process and calculations used to reach new rent amount]

1. The copy of the Notice of Proposed Rent Increase provided to VCAT by the agent shows that it was in the prescribed form and it states that the method used to calculate the rent increase is "market review".
2. The evidence of the agent at the hearing was that the renter was not provided with relevant market review data at the time the Notice of Proposed Rent Increase was given. His evidence was that the renter had been provided with a screenshot only. At a previous hearing on 7 December 2022 before a different Member the agent had undertaken to provide the renter with that market review data, but the agent conceded at the hearing that that data had subsequently not been provided.
3. Documents provided to VCAT by the agent show that the Notice of Proposed Rent Increase was emailed to the renter on 8 August 2022. The copy of the email serving the notice says that two documents were attached. Those documents were referred to as "reference". They are called "marketreview01 JPG" and "marketreview02 JPG". However, the attachments to the documents actually provided to VCAT are called "Reference for the Current Market Rate (05/12/2022)".
4. I am unable to draw any conclusions as to what information the screenshot provided to the renter on 8 August 2022 may have contained. The information provided to VCAT seems to have been provided in relation to the previous hearing in December 2022.
5. When asked directly at the hearing whether the renter had been provided with market review data at the time the Notice of Proposed Rent Increase was served, the agent's evidence was that he had not been. The agent said the renter had been provided with a screenshot, but not the market review data. The renter's contention was that he had still not been provided with that market review data.
6. In Boyce v Mariella Nominees Pty Ltd ATF Lorusso Family Trust (Residential Tenancies) [2023] VCAT 89, VCAT considered what information needed to be provided to the renter in order for a notice of rent increase to comply with s 44(3)(b). In that case the Notice of Proposed Rent Increase stated that the rent increase was based on "Comparative Market Analysis", but no further documentation accompanied the notice. In that case VCAT found that:

The notice of rent increase, like a notice to vacate, should contain sufficient information to the renters to enable them to not only answer the question as to why it was given, but also enough information for them to determine whether the rent being proposed is excessive and should be challenged.

A simple reference to a "Comparative Market Analysis" with no further information about the properties that were used, their location or features, which would enable the renters to make a proper assessment about the "reasonableness" of the increase, is in my view against the spirit or purpose of the requirement to provide the method of calculation.[5]

I find that the reference to a "Comparative Market Analysis" with no further information about that analysis fails to satisfy the requirements of s 44(3)(b) that the method of calculation be provided, or the requirements of the prescribed form by providing details of the process used for that method of calculation.

The notice of rent increase is invalid.[6]

1. Whilst I am not bound by that decision, I agree with its reasoning, and with the subsequent conclusion.
2. In the present case, by the agent's own admission, no market review data was given to the renter at the time the Notice of Proposed Rent Increase was served. Such details may have been provided later, and they were provided in the CAV report (disputed by the renter), but they were not provided at the time the notice was served. As a result, the renter had no information upon which to form an opinion as to whether or not the proposed rent increase was reasonable, or even why he had been given the notice at all.
3. I therefore find that a reference to "market review", with no further information about what comparable or other properties might have formed the basis of that market review, fails to meet the requirements of s 44(3)(b), regulation 21 and the prescribed form that the renter be provided with the method by which the rent increase had been calculated. Without any information as to how the market review had been conducted, and also how the rent increase had been calculated, it is also not possible for the renter to know whether or not the proposed rent increase breached Form 5 Part A Clause 2 paragraph 4 by being greater than the amount calculated using the stated method.
4. As a result, I find that the Notice of Proposed Rent Increase given to the renter on 2 August 2022 is invalid.
5. It follows that as I have found the Notice of Proposed Rent Increase to be invalid, there is no need to consider the contents of the CAV report.
6. An order will be made that the Notice of Proposed Rent Increase given to the renter on 2 August 2022 is invalid for failure to comply with the Residential Tenancies Act 1997 (Vic).

[1] s 44(1).

[2] s 44(2).

[3] s 44(5).

[5] Boyce v Mariella Nominees Pty Ltd ATF Lorusso Family Trust (Residential Tenancies) [2023] VCAT 89, [27], [28].