Understanding your community housing rent

Rent setting

All registered agencies must be able to clearly communicate how their rent is calculated and what it is comprised of (including Commonwealth Rent Assistance and other charges).

Rent setting is a complex area with no single model applying across the community housing sector in Victoria.

The following principles apply to rent setting by registered agencies:

• calculations of rent may be based on total household income, the market value of the property or a combination of both
• rents for lower-income households must not exceed 30% of gross household income at commencement of the tenancy. This 30% threshold excludes Commonwealth Rent Assistance (a rent subsidy from government available to tenants of registered agencies who receive a Centrelink payment and are paying more than a specified minimum amount of rent)
• a rent figure may include other charges, such as for water and electricity applying to the property (for example, in rooming houses and units which are not separately metered)

The rent charged to tenants also depends on:

• who owns the property (for example the Director of Housing, the registered agency or another party)
• the housing program (for example whether you reside in long term or transitional housing)
• the type of housing (for example whether it is stand-alone housing or part of a rooming house or multi-occupancy building)
• the government program that funded the housing (for example the National Rental Affordability Scheme)

Therefore, a rent figure quoted to a tenant or prospective tenant by a registered agency may be made up of rebated rent portion, Commonwealth Rent Assistance (CRA) portion and/or other charges.

The amount charged (excluding the CRA component if applicable and any applicable service charges or additional property costs) must not exceed 30% of the household income (excluding any applicable CRA).

What is market rent?

A registered agency can determine the market rent that applies to a property in different ways. It can be based on:

• the registered agency’s own assessment of the rent that could be obtained if the property was rented on the private market, either through independent valuations or the registered agency’s own assessment from data such as real estate agency listings
• market rent figures provided by Homes Victoria
• Australian Tax Office market rent benchmarks for charities

Registered agencies may use a discounted market rent approach (commonly 75%) for some properties.

Under these arrangements rent does not automatically adjust if household circumstances change. However, the registered agency must have policies and strategies for tenants who may experience financial hardship as a result.

Registered agencies may adopt a combined income and market rent based approach to rent setting where rent charged is based on the lower of two calculations:

• designated percentage of income (generally between 25% and 30%)
• designated percentage of the applicable market rent (generally 75%)

For questions about a registered agency’s determination of the market rent for the property in which you live, or about its use of the market rent figure in its calculation of your rent, please contact your landlord (as a registered agency).

Requesting a market rent assessment by Consumer Affairs Victoria

A tenant can request a market rent assessment by Consumer Affairs Victoria if the landlord has given notice of an increase that the tenant thinks:

• is excessive (after considering market rent)
• has not appropriately allowed for reduced or withdrawn services, facilities or other items that the tenant was getting previously as part of their rental agreement

Tenants must request in writing to Consumer Affairs Victoria a market rent assessment within 30 days of having received a notice from the registered agency advising of a rent increase.

Tenants have 30 days from receiving Consumer Affairs Victoria’s market rent assessment report to apply to the Victorian Civil and Administrative Tribunal (VCAT) for a hearing.

VCAT may then set a maximum rent, having regard to a range of factors, including the rent payable for comparable rented premises in the same locality.

VCAT has a limited role with rent disputes as its jurisdiction only covers:

• matters relating to the level of rent where a tenant is paying the market rent and the tenant believes the registered agency’s assessment of the market rent is excessive
• matters related to service charges exceeding actual costs incurred

Disputing a rent charge

For questions about Commonwealth Rental Assistance, how best to keep Centrelink informed of your current rent, or other charges applying to rent calculations, tenants and prospective tenants are recommended to contact their landlord’s tenancy or place manager.

A breakdown of your rent calculation can be requested to see what has been included in the rent figure provided to you by your landlord or prospective landlord (as a registered agency).

For any concerns about how your rent is calculated once you have received a breakdown of your rent figure, you may request further information or submit a complaint to your landlord.

All landlords (registered agencies) regulated under the Housing Act 1983 (Vic) are required to implement a complaints management process. A registered agency’s complaints management process can be used if you believe that a registered agency has not complied with its rent or other charges policy, or has not adequately explained how a new rent figure has been calculated when requested to do so within 30 days.

Following completion of this process, the complaint may be referred to the Housing Registrar for review and investigation on behalf of the Registrar of Housing Agencies under the Housing Act 1983 (Vic).

Before contacting the Housing Registrar, tenants or prospective tenants need to:

• discuss any questions about the rent being charged with their landlord, as described above (requesting a breakdown of the rent calculation is often a critical step)
• submit a formal complaint to the registered agency and allow it 30 days to resolve the complaint

The Housing Registrar will ask whether these actions have been completed, and will seek copies of all relevant documentation as evidence to determine whether a registered agency has reasonably sought to resolve rent concerns.

The Housing Registrar can be contacted by phone: 03 7005 8984 or by email: housingregistrarcomplaints@dtf.vic.gov.au. Visit the contact us page to find out more.