When Can You Claim Advertising and Letting Costs? Hogan v Joshi [2025] VCAT 548
Decision date: 18 June 2025
Key issue: Interpreting section 211A(3)(a) of the Residential Tenancies Act 1997 (Vic) in relation to advertising and letting fees when a renter breaks a fixed-term lease. In this important case for property managers, the Tribunal examined how much a residential rental provider can recover when a renter ends a fixed-term lease early. The decision addresses common misunderstandings around claiming advertising and letting fees.
Full Case: https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2025/548.html
The Background
The renters entered into a third fixed-term lease from 5 October 2024 to 4 October 2025 but vacated on 11 March 2025. The rental provider sought to recover:
$774.39 for unpaid rent and loss of rent
$628.00 for advertising expenses
$385.07 for letting fees
What Was Awarded?
Only $530.12 was awarded to the rental provider. All other claims were dismissed.
1. Loss of Rent
The provider claimed rent for the two days between 11 March (when the renter vacated) and 14 March (when the new renters moved in). The agent argued this short gap was due to cleaning and inspection needs - and that was industry practice.
The Tribunal found that this buffer was standard practice and would have occurred even if the lease had run its full term. Since the gap was not caused by the breach, it could not be compensated.
2. Advertising and Letting Fees
The Tribunal also rejected the claims for advertising and letting fees.
The advertising costs related to securing the replacement renter, not the renters who had ended the agreement early. Under section 211A(3)(a) of the Act, compensation can only be awarded for advertising and reletting fees incurred in securing the renter who terminated early. Since the rental provider had incurred no such costs at the beginning of the third fixed term, there was no compensable loss.
Even if costs had been incurred, they would have had to be pro-rated. The Tribunal expressly rejected the argument that advertising costs can be recovered in full, even though the legislative example does not show any proration. The Member stated that the example is inconsistent with the plain words of the section and does not override the requirement for proportionality.
Similarly, the letting fee claimed related to the replacement renter. The Tribunal found that the rental provider had already received the full benefit of the letting fee paid for the original renters, who had completed two prior fixed terms. As no loss had occurred from the early termination of the third agreement, the claim for the letting fee was dismissed.
Further Point: Invalid Lease Clauses
Although not raised by the rental provider, the Tribunal reviewed Clause 73 of the lease, which attempted to impose fixed fees and penalties for early termination. The Tribunal found this clause invalid under sections 27 and 27B of the Act because it sought to override the statutory compensation framework and impose a penalty.
Key Takeaways for Property Managers
Claims for advertising and letting fees must relate to the renter who broke the lease, not the replacement renter
Even when incurred, advertising and letting costs must be pro-rated, not claimed in full
Fixed lease clauses that impose penalties or override the Act are likely to be invalid
Standard buffer days between renters are not automatically compensable
The Tribunal requires actual loss to be proven in every compensation claim
Final Thought
This decision underscores that compensation under the Residential Tenancies Act is about actual loss — not fixed costs, penalties, or industry habits. Proving the link between the loss and the breach is essential.
