VCAT Looks at Invalid Rent Increases Again!
JHK v MBE (Residential Tenancies) [2025] VCAT 801
Decision date: 9 September 2025
Full Case: https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2025/801.html
The Background
The renter began occupying the property in March 2020, paying $300 per week and a $600 bond directly to the owner (never lodged with the RTBA). Rent was later increased verbally at the door rather than by formal notices.
In February 2024, the owner issued a new “house sharing/rental agreement” proposing rent of $455 per week. The renter challenged its validity and stopped paying rent. A notice to vacate for arrears followed, but before the termination date, the owner removed the front gates—critical to the renter’s sense of safety as a family violence survivor—prompting her to leave.
The renter sought refunds of overpaid rent on four alleged invalid rent increases, repayment of her bond, and compensation for being unlawfully forced out.
The Tribunal’s Analysis
The Member carefully considered whether compensation was payable and how to calculate it. This required addressing two core issues:
Which rent increases were invalid?
Only two increases were proved: $15 per week (Aug 2022) and $30 per week (Jun 2023).
Both were invalid under s 44 because they were not in the prescribed form, and the 2023 increase occurred within 12 months of the 2022 increase.
How should compensation be assessed?
Here, the Tribunal discussed the two different approaches used in VCAT:
Jeffrey v Fitzroy Collingwood Housing Assoc. Ltd: the “restitution” view — if a notice is invalid, all rent paid under it must be refunded, full stop.
Maurer v Sia [2024] VCAT 571 and Janover v Liberman [2025] VCAT 264: the “statutory approach” — compensation is considered under ss 452 and 211 of the Act, weighing factors like mitigation, fairness, and the renter’s knowledge.
Member Maher preferred the statutory approach, noting it was endorsed in Janover v Liberman as the fairer and more flexible way to assess claims.
Mitigation and the Renter’s Evidence
The Member placed heavy weight on the renter’s evidence when considering whether she had mitigated her loss:
She felt bullied into paying the increases, with the rental provider “in her face” about the 2023 increase.
She had to borrow money from her sister to meet rent obligations.
She only realised something was wrong in 2024, when the sharp 2024 rent increase and a written agreement caused her to question the past.
Importantly, VCAT found that:
The renter paid the increases in good faith, believing the owner was acting lawfully.
As a first-time renter in an informal arrangement, without prescribed notices or rights information, she had no reason to know the increases were invalid until 2024.
Her refusal to “backpay” rent increases was not a negotiation—it was simply common sense that rent cannot be increased retrospectively.
Once informed of her rights by Consumer Affairs, she acted promptly by filing her claim.
The Member concluded:
“Any requirement to mitigate can only arise when the renter knew or ought to have known of the breach… As the rental providers did not inform the renter of her rights, they effectively allowed a situation where the renter was not armed with the information to act earlier.”
This justified awarding compensation despite the renter having paid the increases for almost two years.
The Outcome
Refund of invalid rent increases (2022 and 2023): $2,526.01
Bond refund: $600.00
Less unpaid rent (24 days): –$1,080.00
Hardship for unlawful eviction (gate removal): $500.00
Total payable to renter: $1,546.01
