Invalid Rent Increase Doesn’t Guarantee a Refund: Janover v Liberman [2025] VCAT 264
Decision Date: 3 April 2025
Grounds: Compensation claim for rent paid under invalid notice
Outcome: Application dismissed
Full Case: https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2025/264.html
In this recent VCAT decision, the Tribunal confirmed that even when a notice of rent increase is invalid, renters are not automatically entitled to a refund—especially if they’ve continued to pay without objection and suffered no real loss.
📌 The Background
The renter sought $1,672 in compensation, claiming he paid increased rent for 11 months under an invalid rent increase notice. The notice, issued on 26 June 2023, lacked adequate detail to justify the increase, merely referring to "2 bedroom apartments in St Kilda East/Balaclava" without listing actual comparable properties.
Despite this technical deficiency, the renter paid the increased rent from September 2023 to August 2024 without challenge, only raising the issue after receiving a subsequent rent increase in July 2024.
🧾 VCAT’s Findings
Member O Mahoney agreed the notice was technically invalid under Boyce v Mariella Nominees due to the absence of supporting comparative property details. However, the claim for compensation was still dismissed. Key reasons included:
The renter made no attempt to challenge the increase at the time.
There was no evidence the rent was excessive—a 7.3% increase was not unreasonable during a period of high inflation and limited supply.
The renter could afford the rent and had even sought to negotiate a new lease at the same amount.
Delays in action prevented the rental provider from correcting the issue, and no real loss was suffered by the renter.
📚 Legal Context: Compensation for Invalid Notices
Section 44(5) of the Residential Tenancies Act 1997 (Vic) states that an invalid notice has no effect—but compensation for rent paid under such notices is not automatic.The Tribunal has now clarified:
Restitution law does not apply—compensation is instead governed by sections 210 and 211 of the RTA, which require genuine loss.
The approach in Maurer v Sia [2024] was endorsed: compensation is discretionary and assessed case by case.
The Tribunal will not award compensation as a windfall where the renter continued to pay without protest and suffered no detriment.
💬 Final Thoughts
Janover v Liberman is a cautionary tale for both sides. Yes, rental providers must be vigilant about notice compliance—but renters must also act promptly and prove real loss to get relief.
However, Castellan Consulting does not recommend relying strictly on this decision as authority in future matters. The Tribunal in Janover expressly rejected the approach taken in Jeffrey v Fitzroy Collingwood Rental Housing Association Limited [1999] VSC 335, a Supreme Court decision which we continue to view as good law, particularly in its clear articulation of the law of restitution.
Just because Janover has been handed down does not mean property managers can drop the ball. Rent increase notices must still be technically correct and legally compliant. A future Tribunal member could very well disagree with this ruling and adopt a different approach—especially given the current inconsistencies in VCAT's handling of these issues.
Castellan’s position is clear: always ensure your rent increase notices are precise, supported by proper comparable evidence, and in full compliance with the Act.
