Welcome to Yahoo’s weekly column where lawyers Alison and Jillian Barrett from Maurice Blackburn tackle problems everyday Aussies face — whether it be consumer, property, money matters, relationships or work.
Question
My family has been renting a house in Melbourne’s outer suburbs for several years. One of the reasons we chose the property was because it had a decent-sized backyard with an alfresco area, enough space for our dog, a trampoline for the kids and room for a small garden shed.
Last year, the owner built a granny flat in the backyard. The new building now takes up more than half of the outdoor space. Part of the alfresco area was also removed during construction, and we no longer have enough room for the trampoline. We now have a family of four living on the same property, and they share our driveway and access the granny flat through our side gate!
Our rent has stayed the same, despite losing a large portion of the property we originally agreed to rent.
We’re wondering if we can argue for a rent reduction, compensation or any other rights when a landlord significantly reduces the usable space of a property after the lease has started?
Answer
Choosing a rental because it offers a big backyard, space for kids and pets, and an alfresco area is entirely reasonable.
Having that space taken away after you’ve moved in would feel unfair to most tenants.
The short answer is yes, you do have rights.
In Victoria, if a landlord significantly reduces what you can use or enjoy during a tenancy, you may be entitled to a rent reduction and potentially compensation.
Whether you succeed will depend on what your lease says, how much space you’ve lost, and how the works were carried out.
What you actually rent matters more than the listing
When you sign a residential lease in Victoria, you are renting the premises as described in the agreement.
That usually includes the land and facilities that form part of the property, not just the four walls of the house.
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Jillian and Alison Barrett from Maurice Blackburn lawyers.
(Maurice Blackburn (William Gordon Photography))
If the backyard, alfresco area and exclusive use of the driveway were part of what you originally leased, the landlord cannot simply take a large portion of that away mid‑tenancy without consequences.
Even if the lease does not spell out every square metre, the Victorian Civil and Administrative Tribunal (VCAT) will look at what a reasonable tenant would have understood they were renting based on the agreement and how the property was used when the tenancy began.
Landlord can’t reduce space without consequences
Victorian tenancy law requires landlords to ensure tenants have quiet enjoyment of the property and that the premises remain in a condition that is fit to live in for the duration of the tenancy.
When a landlord builds a granny flat that:
removes a substantial part of the backyard
removes or alters an alfresco area
introduces another household sharing access areas
changes privacy, noise and safety
That is often considered a reduction in amenity or services.
If the amenity of the property has been reduced, you can apply to VCAT for a rent reduction to reflect the property’s new, lower value.
You do not need to wait until the lease ends to do this.
Keeping the same rent doesn’t make it fair
A common misconception among landlords is that they can keep charging the same rent because the house itself hasn’t changed.
VCAT does not assess rent in a vacuum.
It looks at what you are getting for the money.
Losing more than half the outdoor space, shared access to your driveway, and reduced privacy are all factors that can justify a lower rent.
In some cases, tenants have successfully argued for backdated rent reductions from when the loss of amenity occurred.
What about compensation?
Compensation is also a possibility, particularly if:
the works were done without proper notice
parts of the property were removed without your consent
your use of the property was unreasonably disrupted
Compensation is not automatic, and the amount depends on evidence. Photos, videos, dates of construction, and a copy of the original advertising can all help show what you lost.
Practical steps to take now
Before rushing to VCAT, there are a few sensible steps to take:
Check your lease carefully – look for references to exclusive use of the yard, driveway or alfresco area.
Put your concerns in writing – ask the landlord or agent to explain why the rent has not been adjusted, given the reduction in usable space.
Request a rent reduction formally – be clear about what has changed and what you are seeking.
Request a rent assessment from Consumer Affairs Victoria – if the landlord refuses, ask Consumer Affairs Victoria to assess whether a rent reduction is warranted. This is a free service and is the required first step before escalating further.
Apply to Rental Dispute Resolution Victoria — if the Consumer Affairs Victoria assessment supports a rent reduction but the landlord still refuses, apply to Rental Dispute Resolution Victoria within 30 days of receiving that report. This is a free service that helps resolve disputes without the need for a formal hearing.
Proceed to VCAT if needed — if Rental Dispute Resolution Victoria cannot resolve the dispute, the matter can proceed to a formal VCAT hearing where an independent member will make a binding decision.
You can apply to VCAT online, and tenants do not need a lawyer to bring a claim. Tenants Victoria provides free specialist tenancy advice and information.
It sounds like your landlord has significantly reduced the space or features of your land and home, and the law gives you options to fight this.
This information is general in nature and should not be regarded as specific legal advice. For legal advice on a specific situation, consult a qualified solicitor.
The contents of this column reflect or are inspired by real-life experiences. Some details may be adapted.