Former motel ‘licence’ found to be a tenancy; owner ordered to sign a written rental agreement (VCAT, 2026)

What happened

Since about 14 April 2023 the renter had lived in a unit in a complex of around 40 units that had once been a motel. She had signed a document headed "licence agreement": five pages plus a one-page schedule and a one-page set of "house rules". The schedule set a 12-month term from 14 April 2023 and an "occupation fee" of $550 per fortnight. A "security deposit" of $550 was paid and lodged with the Residential Tenancies Bond Authority, with the Department of Housing contributing to the bond.

The unit had its own kitchenette, bathroom and toilet, and its door opened onto a veranda outside. The renter's evidence, which was not contested, was that the complex had not operated as a motel while she lived there, that the old office and laundry had been converted into residential rooms, that nobody cleaned her unit or provided food, that she did everything herself, and that staff or trades had never entered without notice. She said she had all her own things in the unit, paid rent fortnightly, and that it felt like a normal rental. The complex still carried "Beach Motor Inn" signage and was registered with the council under the Public Health and Wellbeing Act 2008 (Vic) as prescribed accommodation with more than 20 beds, but the registration did not say what type. There was no evidence it was registered or declared as a rooming house.

Maintenance problems in December 2024 led to a dispute about what kind of occupancy this really was. The renter applied to VCAT. At the first hearing, in July 2025, the owner's employee representative argued the rooming house rules applied and pointed to earlier VCAT orders the owner had obtained as a rooming house operator for other units. By the second hearing in October 2025 the owner's position had changed: it now argued VCAT had no jurisdiction at all, because the licence agreement gave no right of exclusive possession.

The owner relied on clauses saying the occupier had a "non-exclusive licence", could be relocated to a different unit at the owner's discretion, occupied "as a lodger only", had to allow staff and trades in for inspection, renovation and cleaning (and in some cases without notice), and could not sublet or let others occupy the unit. During the agreement the owner had also issued two rent increase notices, each adding $30 per fortnight, both on the prescribed rooming house form, taking the rent to $610 per fortnight.

What each side wanted

The renter asked VCAT to decide whether the premises were a rooming house or a private rental, and specifically whether the unit was a self-contained apartment under section 18 of the Residential Tenancies Act 1997 (Vic). She also asked for orders that the rent increase notices be declared invalid because they did not show how the increase was calculated, that the owner stop using a licence agreement and use a proper residential rental agreement for her and for other residents, that utility services be clearly defined so residents could claim a utility rebate, and that the house rules be removed. In her written submissions she added a claim under section 29B of the Act for an order that the owner prepare and enter into a written rental agreement. The owner's primary argument was that the agreement was a licence in all respects, that no exclusive possession had been granted, and that the Act and VCAT's jurisdiction were therefore not engaged; in the alternative, and reserving its right to seek leave to appeal to the Supreme Court, it argued that any written agreement should be periodic and fortnightly at $610 per fortnight with the house rules kept in.

What the tribunal decided

VCAT found it had jurisdiction. The Member found the true nature of the grant was exclusive possession, that the unit was a self-contained apartment and that Part 2 of the Residential Tenancies Act applied, that the parties were already subject to a rental agreement that was only partly in writing, that the renter had stayed on after the earlier fixed term ended, and that the owner was responsible for utility charges because the premises were not separately metered.

The application was amended to name the respondent as "Fyter Trust Pty Ltd ATF Barnett Super 1" and to include the section 29B claim. The owner was ordered to prepare and enter into a written residential rental agreement with the renter by 7 April 2026, on these terms: a periodic (fortnightly) agreement; rent of $610.00 per fortnight inclusive of utilities; a commencement date of 2 February 2026; and the inclusion of rules 1 to 16 of the "use of common property and units (House Rules)" document, to be called "rules about the use of the common areas and apartments". Rule 17, about keys, was excluded by agreement after the Member said it went further than the Act allowed. Rent was recorded as paid up to and including 6 April 2026.

All other claims were dismissed, including the request to declare the two rent increase notices invalid. On 10 April 2026, after hearing the parties, the Member ordered under section 118 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) that the 30 March 2026 order would not take effect until 28 April 2026, because the owner had asked for a stay or more time pending an appeal. Reasons were published on 5 October 2026.

Why the tribunal decided it that way

The test for telling a lease apart from a licence is whether the occupier was given exclusive possession, meaning the right to keep others out, including the owner. Following the Supreme Court in Swan v Uecker and the older authorities Radaich v Smith and Street v Mountford, the Member looked at substance rather than form: the label "licence" is only a label, and what matters is the rights the parties actually created, read with the surrounding circumstances and the nature of the premises. Under section 507 of the Act the owner carried the onus of proving the Act did not apply.

The Member found the agreement's own wording was ambiguous. It called the occupier a lodger, yet elsewhere referred to use "for the purpose of private property", to replacing "residents", and to providing a "residential environment". The only service typical of lodging was maintaining common areas and fittings, which is also a rental provider's repair obligation. The occupier had to clean her own unit. The owner was a company and could not itself live there, and no lodging-type services were in fact provided. The right to end the agreement was limited to overdue payments and lack of cleanliness and required a notice to vacate first, which the Member said did not fit a non-exclusive right. The inventory template used the words "rental provider", "renter" and "rent" and included safety checks required under the Act. A right to relocate the occupier to another unit pointed to continuing residency rather than away from it, and rights of entry for inspection or renovation are not inconsistent with exclusive possession. Holding a master key proved nothing, because owners commonly keep keys.

The conduct of the parties mattered most. The bond was lodged with the Residential Tenancies Bond Authority, a body created by the Act, and rent increases were given on forms prescribed under the Act. The Member found it hard to see why an owner relying on a purely contractual licence would use the machinery of the legislation that governs residential rentals. The owner never acted on the relocation right, always gave notice before entry, and told the renter she did not really need to renew. On that evidence the renter controlled entry and the owner treated the grant as exclusive. Navaratne, the earlier VCAT case the owner relied on, was distinguished: there the operator was running a hotel business, serviced the room and had cancelled the occupant's swipe card without notice, none of which happened here. Each element of section 29B was then met, and the Member held the existing agreement was only partly in writing because the licence agreement did not match the prescribed form required by section 26 (noting that under section 26(3) a written agreement is not invalid merely because it is not in the prescribed form). The house rules were allowed in because they governed common areas and units in a way similar to owners corporation rules, which a rental provider must disclose under section 30D and regulation 16 of the Residential Tenancies Regulations 2021.

The rent increase notices were a different matter. Following the Supreme Court in Mazi v Kao (No 2), the Member held VCAT is a statutory tribunal with only the powers given to it, and has no power to make a standalone declaration that a rent increase notice is invalid. A notice that fails to follow a procedure is invalid, but creating a non-conforming document is not itself a "breach" that enlivens section 452, and section 472 does not expand the Tribunal's power to make declarations. The same reasoning was applied to section 29B. Reducing the rent in the written agreement would amount to declaring the notices invalid by another route. The Member added that even with the power, it would be unfair to change the rent now, because the renter had not challenged either increase as excessive at the time under section 46 and the notices had told her of that right. The rent was therefore set at the amount already being paid.

What this means if you are in a similar position

If you are in a similar position, this decision shows that what a document is called does not decide which laws apply to where you live. A tribunal looks at the substance of the arrangement: whether you can keep others out, what the premises are actually like, what services are really provided, and how both sides have behaved over time. Clauses saying "non-exclusive licence" or "lodger only" can be outweighed by the day-to-day reality, and an owner who uses the tenancy system's own machinery, such as lodging a bond with the bond authority or serving prescribed rent increase notices, may find that conduct counted against an argument that the tenancy laws do not apply.

It also shows the limits of what a tribunal can be asked to do. VCAT accepted it could order a written agreement under section 29B of the Residential Tenancies Act and could fix its terms, including the term length, the rent, utilities and rules about common areas. It did not accept it could simply declare past rent increase notices invalid when no compensation or excessive rent claim was made, and it noted that the time to challenge a rent increase is when the notice arrives. House rules are not automatically out of bounds either; rules about parking, common property and keeping pets can sit alongside the Act, while a rule that goes beyond what the Act permits may be struck out.

In disputes like this, most people start by putting the problem in writing to the landlord or the operator, setting out what they say the arrangement really is and what they want fixed, and then make a tribunal application if that does not resolve it.

How to apply: our step-by-step guide to a VCAT application. More decisions: VCAT cases and house rentals and bonds.

Source: Barker v Fyter Trust Pty Ltd [2026] VCAT 819 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.