If your landlord believes they have suffered loss or damage as a result of you breaching your duties under your lease or the Residential Tenancies Act 1997, they may make a claim against you for compensation in the Victorian Civil and Administrative Tribunal. The matters landlords usually claim for include

• costs incurred as a result of you ending your tenancy before your fixed-term lease had expired (lease breaking)
• costs incurred because you moved out without giving adequate notice
• loss or damage to the rental property or to fixtures or goods supplied with the property
• failure to leave the property reasonably clean

Compensation claims by landlords are usually made after the tenancy has come to an end, and are often made together with a claim against your bond. However, the landlord can make a claim for compensation against you at any time during your tenancy, or for up to six years after the damage or loss was supposed to have occurred.

The Tribunal has a limit of $10 000 on compensation claims. If the landlord wants to claim more than $10 000 they will need your consent, or they must go to the Magistrates' Court or a higher court. Contact the Tenants Union for further advice if your landlord is making such a claim.

How a claim is made
If your landlord wants to claim compensation against you, they (or their agent) must usually give you a Breach of Duty Notice. This Notice must state

• details of your breach (what they say you've done wrong)
• what action you should take to fix the problem (eg repair damage to the property)
• the amount of money they are claiming for anything that can't be fixed (eg two weeks lost rent as a result of you moving out without giving adequate notice)

If the compensation claim is for a breach of your tenancy agreement rather than a breach of the Act (eg the lease contains a 'no pets' clause), the landlord may apply directly to the Tribunal without giving you a Breach of Duty Notice.

You do not have to pay anything just because you have been given a Breach of Duty Notice. If the landlord wants to claim the money from you, they must apply to the Tribunal for an order that you have to pay the amount claimed. You will be given the opportunity to put your side of the story at the Tribunal.

Compensation & bonds
If the landlord is claiming against your bond as well, they must do so within 14 days of the tenancy ending. If they have not made a claim within 14 days they are not entitled to do so, and you can get an order from the Tribunal that the Residential Tenancies Bond Authority pay you the full amount of your bond. The landlord can still make a claim for compensation, but they do not have access to the bond as security for the payment of any successful claim.

The landlord is entitled to make a claim against your bond and a further compensation claim at the same time. If they are making a claim for an amount which is less than or equal to the amount of your bond, they do not have to make a compensation claim, but must follow the bond claim procedures. See the Bonds leaflet for more information.

Agreeing to pay
If you decide you want to pay the claim, or if you negotiate with the landlord or agent to pay a lesser amount than they are claiming, you must get a letter from the landlord or agent clearly stating how much you have agreed to pay and how it will be paid, and confirming that they will not make any further claims against you in the future. You should also get a receipt for your payment.

Defending the claim
If you disagree with the landlord's claim or you cannot reach an agreement with the landlord about how much of the claim you should have to pay, the landlord will have to take the case to the Tribunal. The landlord must convince the Tribunal that

• they have sustained loss or damage, and
• the loss or damage resulted from your breach of the lease or the Residential Tenancies Act 1997, and
• the amount they are claiming is reasonable

The landlord must provide evidence in support of their claim, and must show you or give you copies of any documents or photos they present to the Tribunal. The Tribunal will also give you an opportunity to put your side of the story. If you present any documents or photos, you will also have to show these to the landlord or agent.

If you do not agree that you are responsible for the landlord's loss, you should tell the Tribunal why not, and provide whatever evidence you can to support your claim. For example, if the damage was caused after you had moved out of the property you should provide evidence of the state of the property when you left (eg photographs, witness statements).

If you agree that you are liable for some of the landlord's losses, but believe that the amount they are claiming is unreasonable, you must provide evidence of this. The landlord has a duty to keep any loss they suffer to a minimum, and if they have not done so, they cannot claim the full amount they have lost. For example, if you have broken your lease and the landlord doesn't make any effort to get new tenants in, or advertises the property at a higher rent, they cannot claim for all the lost rent. Since they have not tried to keep their loss to a minimum by finding new tenants quickly, you should not be held responsible for their losses.

If the landlord is claiming for repairs or replacement of property or fixtures, you should get quotations from tradespeople or shops to show that any amount the landlord says they will have to spend (eg on replacing carpet, having rooms repainted) is excessive. If the property was damaged or worn before you moved in, you should also point this out. The landlord cannot claim the full cost of replacing something which was not new when it was damaged, and the Tribunal will allow for 'depreciation' in the amount that it says you have to pay for the damage. The landlord's actions in repairing the damage must also be reasonable and in proportion to the amount of damage caused. For example, they cannot claim for the cost of repainting the entire house when the paintwork has only been damaged in one room.

You should be prepared to argue about both your responsibility for the damage, and about the amount you should have to pay. Even if you believe you are not responsible for any of the claim, the Tribunal will not always agree with you and you should be prepared to try and convince them to order a lesser payment if they find you liable.

Orders for compensation
If the Tribunal orders that you have to compensate the landlord, you will have to consider how you will pay the claim. See the Financial orders against tenants leaflet for more information.
For more information, contact the Tenant