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Making a temporary rent reduction agreement

If a tenant is having trouble paying rent due to the impacts of coronavirus (COVID-19), their landlord must try to come to an agreement with them about the amount of rent that they can afford to pay.

Financial hardship is stressful and can affect you in different ways. It’s important to know that there are support services that can help you with your finances, relationships and mental health during this challenging time.

This page explains how to negotiate and agree to a temporary rent reduction, and how to extend or renegotiate an existing temporary rent reduction.

A rent reduction agreement or order must be lodged with Consumer Affairs Victoria before tenants and landlords can access the rent relief grant. The grant is a one-off payment of up to $3,000 available to tenants who are experiencing financial hardship due to the coronavirus (COVID-19) pandemic. The grant is paid directly to landlords on the tenant's behalf.

Support during the process

The process of making a rent reduction agreement is designed to be fair and accessible, but tenants and landlords can still choose to get support to reach an agreement. Contact Consumer Affairs Victoria for information and advice, or get support from services like a:

The process for making a temporary rent reduction agreement

  1. Tenants need to be clear about how much rent they can afford to pay.

    There is no pre-determined amount that is required for tenants to pay. A rent reduction needs to be reasonable in the circumstances.

    Think about:

    • the income you’ll have from your job and any government financial support, and how long this income will last
    • any savings you can use to support yourself during this time
    • what essential expenses you’ll need to pay for – for example, food, clothing, medical care, utilities, phone and internet, education, or vehicle expenses

    Using a budgeting tool like the Moneysmart budget planner can help you work out an affordable amount of rent. As a guide, paying more than 30 per cent of your before tax (gross) income in rent is considered being in rental hardship.

    When you are ready, contact your landlord or property manager requesting a reduction in rent.

  2. Tenants should contact their landlord or property manager to request a rent reduction.

    This may feel like an intimidating step, but it’s important not to put it off – not paying rent is a breach of the tenancy agreement. Rent reductions can be backdated to the day that the request is made.

    The request should be clear about:

    • a tenant’s changed circumstances
    • the amount they can afford in rent
    • any supporting evidence they can provide

    Tenants Victoria has example rent reduction letters to use as a guide, or Justice Connect's Dear Landlord tool can help generate a letter based on a tenant’s circumstances.

    If you need further support in contacting your landlord about a rent reduction, you can contact Consumer Affairs Victoria or get support from services like a:

    After the request has been sent

    The property manager or landlord should confirm they have received the rent reduction request and should reply to the tenant as soon as possible.

    Tenants can ask Consumer Affairs Victoria for help if they are not happy with the response they have received or if they feel like it’s taking too long. Tenants don’t need approval from landlords or property managers to get help.

  3. Landlords can either agree to a tenant’s reduced rent request or begin negotiating with the tenant to agree on a reasonable alternative. Landlords may have their own personal and financial challenges to manage due to the coronavirus (COVID-19) pandemic. Landlords should be clear on a rent reduction they can afford to accept considering any support available from:

    Negotiate for a rent reduction, not a deferral

    Agree on reducing the amount of rent instead of a tenant deferring payment of the current amount to a later date. If rent is deferred, tenants may end up with a debt they cannot repay at the end of the agreement.

    Tenants and landlords should negotiate in good faith

    This means that both parties should:

    • negotiate with the intention to agree
    • understand the other party’s situation
    • be as flexible as possible
    • think about all of the information available to them at the time of negotiation
    • avoid assumptions about the other party’s situation
    • listen actively and engage in discussions

    Using this approach, most tenants and landlords should be able to agree on what works for their situation.

    If property managers are involved in this process, they should be clear about their role as agent between landlords and tenants.

    For more information and advice on the negotiation process, contact Consumer Affairs Victoria.

  4. How to register a rent reduction agreement with Consumer Affairs Victoria

    So everyone is clear on what has been decided, register your rent reduction agreement online with Consumer Affairs Victoria. 

    There’s no set format, but you can use the Temporary rent reduction agreement form as a guide. If you use another format it must include:

    • name of tenant
    • name of landlord
    • property address
    • rent pre-agreement
    • rent for the period of the agreement
    • time period agreement will be in place

    Once the rent reduction agreement is registered with Consumer Affairs Victoria, you and the other parties will be notified. This may be used as evidence to access other government support such as the rent relief grant or land tax relief.

  5. Tenants or landlords can start a dispute resolution process by using the Consumer Affairs Victoria (CAV) coronavirus (COVID-19) rental agreement or dispute form. Include any information about the steps that have been taken to try to reach an agreement so far. 

    CAV will work with tenants and landlords to help them reach a rent reduction agreement. The aim is to provide a quick service to allow both parties to have certainty. Using information that tenants and landlords provide, CAV will try to help make an agreement that shares the financial burden.

    You do not need to have a representative to use these services. However, landlords or tenants may choose to be represented by someone such as an advocate, lawyer or agent. Representatives should: 

    • be authorised to make decisions on the tenant’s or landlord’s behalf
    • have enough information to make those decisions
    • be transparent in their role as agent between the landlord or tenant and CAV

    If CAV can’t help you agree, you will be referred to the Dispute Settlement Centre of Victoria for a free mediation service. 

    Going to mediation – if necessary

    If negotiations are unsuccessful, an accredited mediator from the Dispute Settlement Centre of Victoria will help tenants and landlords to:

    • develop options
    • consider alternatives
    • reach an agreement tailored to individual financial and personal circumstances

    If you reach an agreement

    The accredited mediator will:

    • put the rent reduction agreement in writing
    • give copies of the rent reduction agreement to the tenant and landlord
    • register the rent reduction agreement with Consumer Affairs Victoria – this may be used as evidence to access other government support such as the rent relief grant for tenants or land tax relief for landlords

    For more information about the process with the Dispute Settlement Centre of Victoria, see the guide to conciliations

    If you can’t reach an agreement

    If tenants and landlords can’t reach an agreement in the mediation process, the Chief Dispute Resolution Officer for Residential Tenancies may make a binding dispute resolution order. The order may:

    • determine a reduced amount of rent
    • determine a payment plan for the rent or rental arrears
    • vary the terms of the rental agreement

    The dispute resolution order can be used as evidence to help access other government support such as the rent relief grant for tenants or land tax relief for landlords.

    If the Chief Dispute Resolution Officer for Residential Tenancies can’t issue a dispute resolution order, both parties will receive a notice to progress to the Victorian Civil and Administrative Tribunal  (VCAT).

    Changing a dispute resolution order

    Dispute resolution orders can only be changed if:

    1. there has been a substantial change in the circumstances of the dispute, or a tenant or landlord cannot comply with the order because of circumstances outside their control
    2. a request to change the order is made within 30 business days of the order being made
    3. the Chief Dispute Resolution Officer agrees to the change

    To make a change to a dispute resolution order, contact the Dispute Assessment Officer managing your case. You will need to provide evidence to support your request. If you make a request, you must give the details in writing to the other party within 2 business days of making the request. 

    In some circumstances, the Chief Dispute Resolution Officer may agree to consider a request beyond the 30 business days limit. Contact the Dispute Assessment Officer managing your case for more information.   

  6. Expiring rent reduction agreements

    If tenants and landlords agree, a rent reduction agreement can be extended. This applies to agreements that were reached either privately or by using dispute resolution services. An extended agreement can be used as evidence to help access government support such as a rent relief grant for tenants, or for potential mortgage payment deferrals for landlords.

    Extended rent reduction agreements should be registered with Consumer Affairs Victoria

    If you can’t agree on an extension, see step five above for more information or contact Consumer Affairs Victoria for advice.

    Expiring dispute resolution orders

    If a dispute resolution order is expiring and tenants continue to experience financial hardship, tenants should contact their landlord or property manager to request a new rent reduction agreement. 

    It’s important to know that tenants and landlords can still get support from Consumer Affairs Victoria and the Dispute Settlement Centre of Victoria to help them reach a new agreement.  

Reviewed 18 November 2020

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