Demand surges for new Victorian rental dispute service

Renters and real estate agents are waiting months to have matters heard by a $52 million service established to bring speedy resolution to rental disputes.

A key pillar of the state government's rental reforms, Rental Dispute Resolution Victoria (RDRV) was intended to overhaul how disputes over bond, compensation, rent and repairs are handled.

Instead of losing time and money waiting for matters to be resolved before a tribunal, the service offers renters and real estate agents a more informal resolution setting, facilitated by mediators.

But less than 18 months after its launch, users on both sides of the ledger told the ABC they had faced waits of eight weeks or more to have a mediator assigned.

Chris Little, who has previously told the ABC about his experience as a long-term renter, has come before RDRV twice, most recently at his landlord's initiation over a bond claim of about $800.

Fearing the issue would not be resolved by mediation, Mr Little said he had asked the service to fast-track the case to the Victorian Civil and Administrative Tribunal (VCAT), which ultimately dismissed the matter and refunded the bond.

However, the parties faced an eight-week wait for RDRV conferencing before they could progress to the tribunal once mediation failed.

"It was really eight weeks waiting just for RDRV to move the case on to VCAT," he said.

The father of two was disappointed that the entire $3,500 bond sum was withheld while the dispute played out.

"For the sake of $700 or $800, I couldn't see any of my bond, which I really needed," he said.

Secret review produces mixed findings on service outcomes

The ABC sought a copy of a recently completed evaluation of RDRV under Freedom of Information laws, but the government withheld the 97-page report on cabinet secrecy grounds.

A memorandum for the real estate sector circulated in October said calls to the RDRV information line had surged 25 per cent beyond forecasts, placing pressure on dispute resolution services.

However, it also said a review had found RDRV was effectively improving timeliness for some cases and resolving "a significant proportion of matters" without a formal hearing.

It recommended improvements for users who face complex circumstances or significant power imbalances and reported confusion around RDRV's role relative to other services.

New tribunal cases plummet

RDRV was launched in June last year with $52 million in set-up and operational costs over its first year.

VCAT, which houses the service, said it expected demand to continue to increase as awareness of the service grew and economic conditions put further pressure on renters and rental providers.

“Continued refinement in digital services, case management and early resolution pathways will help the service remain accessible, timely and user-focused while supporting VCAT’s broader commitment to resolving disputes as early as possible,” a spokesperson said.

Figures provided by the tribunal show the new service has coincided with a vast drop in new residential tenancies matters before VCAT.

Last year, a law firm's report based on about 50 renters who had used RDRV found some felt pressured to settle or act against their own interests.

The firm that compiled that report, Anika Legal, said some improvements had been made but other issues — including unclear communications with applicants — continued to undermine fairness.

"When RDRV does initially contact a renter about their dispute, the communications still do not clearly state that they are not required to participate in mediation or to make an offer of settlement," CEO Dale Clough said.

The Real Estate Institute of Victoria agreed that the service had made improvements, but said timeframes remained a challenge.

Despite the drop in initiations, the number of residential tenancy matters waiting to be finalised at VCAT has grown year-on-year, according to Court Services Victoria data.

Establishing RDRV is among several renter-focused reforms delivered by the Labor government, along with measures like a portable bond scheme and improvements to rental standards.