Individual utility charging in Victoria

Discussion in 'Legal Issues' started by Burramys, 9th Sep, 2019.

Join Australia's most dynamic and respected property investment community
  1. Burramys

    Burramys Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    2,039
    Location:
    Melbourne
    In Victoria, section 52 of the Residential Tenancies Act provides that a tenant pays for the use of separately metered electricity, gas, oil and water. I have seen three different sorts of rent setups for dwellings that are part of a block.
    1 The lease has the tenant paying rent, and the tenant pays utility companies, which may not include water, which is paid by the owners of the block in equal amounts.

    2 The lease has the tenant paying the rent and the landlord pays for all utilities, which are not mentioned in the lease.

    3 The lease has the tenant paying the rent. There is also a utility charge paid to the landlord with no meters for the individual dwellings.

    It seems to me that the third option is contrary to law. Instead of the third option the landlord should ask for a higher rent and not mention utilities at all. Advice on this point and comments would be valued. TIA
     
  2. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,527
    Location:
    Melbourne
    As far as I know, I agree #3 is illegal.

    The Y-man
     
  3. TMNT

    TMNT Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    5,572
    Location:
    Melbourne
    is it?

    Idoubt its illegal as its an agreement between the two parties who have agreed on a certain amount for utilites,

    no different to those places that charge $X per week inclusive of utilities
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,555
    Location:
    Sydney
    State law does not allow a charge for utilities under a resi tenancy lease excepting what is permitted. It is illegal. In Vic, s26A & s27 specifically applies a penalty for preparation of such a lease or modification of standard terms on the standard approved lease form. A approved rooming house may depart from the RTA standards.

    It prevents unscrupulous landlords from imposing "fees" on top of rent.
     
  5. Burramys

    Burramys Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    2,039
    Location:
    Melbourne
    Paul, exactly. As far as I'm aware this is not a rooming house. The flats are self-contained, living room, kitchen, bathroom. I saw an advertisement in a low socio-economic area and suspect that the tenants are unaware of the RTA. By the time the utility charge is added the total rent for these tiny flats is approaching that of much bigger flats.

    It's like drip pricing, where there's a low initial price and then extras which cannot be avoided. This was the case with buying online where payment had to be by credit or debit card and there was a card fee, plus, if memory serves, a handling fee. Hopefully, most LLs obey the law. Some do not and venture into dark areas.