Victoria’s “broken” rental system: Over 38,500 landlords seek legal resolution amid rising disputes

Melbourne, 7 June 2026:  Victoria’s rental sector is facing mounting pressure, with more than 38,500 landlords taking legal or dispute resolution action against tenants over the past 12 months. Experts have described the situation as a “red alert” and are calling for a formal investigation into what they say is a “broken” rental system following more than 150 housing reforms introduced since 2021.

Between May 2025 and April 2026, 20,214 rental providers lodged applications with the Victorian Civil and Administrative Tribunal (VCAT) to enforce notices to vacate. Such notices are typically issued when tenants are 14 days or more behind on rent or have caused serious property damage.

An additional 4,877 landlords sought VCAT rulings relating to bonds, compensation, repairs, compliance, and other disputes. Meanwhile, the state government-funded Rental Dispute Resolution Victoria (RDRV) recorded 13,256 cases filed by rental providers, most of which were related to bonds and compensation issues.

The combined total of 38,573 landlord applications has sparked concern among industry representatives. Property Investors Council of Australia (PICA) chair Ben Kingsley said the figures equate to an average of around 105 cases per day, describing it as evidence that rental reforms have “broken the market.”

“This is a red alert that the rental property market reforms have broken the market,” Kingsley said. “This needs a formal investigation because it is clear that this is an unsustainable situation.”

He added that many property owners are increasingly frustrated as tenants fall behind on rent for extended periods, only for repayment plans or appeals through VCAT to delay resolution.

Melbourne-based Metro Property Management director and former Real Estate Institute of Victoria president Leah Calnan

Melbourne-based Metro Property Management director and former Real Estate Institute of Victoria president Leah Calnan said it has become “almost impossible” for many landlords to recover rental arrears, despite some insurance policies covering up to 20 weeks of lost rent.

She explained that tenants with significant arrears often lack the financial capacity to repay debts, while the legal recovery process remains complex and costly. In many cases, landlords must obtain VCAT repayment orders, enforce them through the Magistrates’ Court, and engage debt collectors—who may take a substantial percentage of recovered funds.

Property management executive Rebecca Carson said there is a growing gap between legal entitlement and practical enforcement.

“In many cases, rental providers absorb the loss,” Carson said. “The cost, time, and uncertainty involved can outweigh the amount owed, which discourages them from pursuing recovery.”

She also noted that property managers are dealing with increasingly complex and frequently changing regulations, often while managing emotionally charged disputes between landlords and tenants.

“Too often, legislation changes are framed around tenants alone,” she said, adding that most rental providers are “mum and dad investors” who rely on rental income to service mortgages.

Melbourne landlord Dan Yeats said he was left more than $65,000 out of pocket after pursuing former tenants who allegedly caused significant damage to his South Morang townhouse, through 13 VCAT hearings. He has since launched two petitions calling for immediate possession rights for landlords when leases expire and rent is in arrears.

A Victorian government spokesperson defended the reforms, stating: “We’ve made renting fairer and safer for all Victorians with our nation-leading rental laws, protecting the interests of both Victorian renters and rental providers.”

They also encouraged residents to seek advice through Consumer Affairs Victoria, which provides free information and support services.

Mr Yeats’ petitions can be found via the Parliament of Victoria website and change.org.