• Terms of short-term stay contracts ruled unfair as they strongly favoured the landlord
• Renters faced heavy financial penalties for minor breaches of the unfair terms
• Holiday and short-stay accommodation providers urged to review their contracts

The Supreme Court has ordered a Perth property manager to stop using short-stay accommodation contracts which contain terms declared to be unfair under the Australian Consumer Law (ACL).

Consumer Protection took legal action against Rolf Gerard Voulon and his company Starland Management Pty Ltd of Burswood, trading as Perth Room Rentals, in relation to his standard contracts signed by short-term renters and lodgers who stayed at six properties, owned by his other companies, in West Perth, Leederville, Burswood and Wilson.

One of the unfair terms required renters who had a fixed-term agreement to give 21 days’ notice prior to departure and, if they failed to do so, would result in them being required to pay an extra four weeks rent even if they departed prior to the expiry date. In effect, the clause allowed Starland Management to retain their bond, which was equivalent to four weeks’ rent, if the required 21 days’ notice was not given.

Other unfair terms contained in the ‘holiday accommodation’ and ‘lodgers’ agreements included:

• Non-refundable deposits, rent and bonds if booking cancelled at any time;
• Forfeiture of the bond and rent in advance if any other people were allowed to stay in the accommodation;
• If weekly fees were not paid within 24 hours after the due date, the contract would be cancelled and bond/rent in advance forfeited. Fees more than four days late would result in renters being locked out of their accommodation;
• Fee increases allowed with 60 days’ notice and no limits specified;
• Rent payable until keys are returned and repairs and/or cleaning is completed;
• Credit card authority to deduct repair and/or cleaning costs in excess of the retained bond.

Contract terms are considered unfair under the ACL if the standard form agreement being presented results in a significant imbalance of rights and obligations between the two parties. In this case, the contract terms were strongly in favour of the landlord while the renters faced considerable detriment.

The Supreme Court on 2 March 2022 also ordered Mr Voulon and his company to pay costs of $5,000, and $1,500 to one of the renters as a refund of retained bond money and rent in advance.

Executive Director for Consumer Protection Trish Blake said, while holiday, short-stay and lodgers accommodation is not regulated under tenancy laws, the contracts are covered by the Australian Consumer Law.

“Purchasing holiday or short-stay accommodation is a consumer transaction, so the standard contracts being offered must comply with the ACL, including being balanced and fair to both the property owner and consumers,” Ms Blake said.

“Starland Management’s standard contracts were drafted to put him at an advantage, with his customers facing heavy financial penalties for what are reasonably considered to be minor issues.

“In effect, the contracts allowed Mr Voulon's company to retain the bond and rent in advance in many circumstances and continue to charge fees and make credit card deductions even after the renter had moved out.

“This Supreme Court outcome means that Mr Voulon and Starland Management will no longer be able to use any contracts containing the declared terms, which must now be amended to comply with the law. It also means renters will be at less risk of losing their bond and rent in advance, which could be a significant amount, if they failed to comply with what were unfair clauses in the contracts.

“In wake of the success of this Supreme Court action, other holiday and short-stay accommodation providers should review their current contracts to ensure they are fair and balanced.”

More information on unfair contract terms within the Australian Consumer Law is available on the Consumer Protection website or enquiries can be made by email consumer@dmirs.wa.gov.au or by calling 1300 30 40 54.

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Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / alan.hynd@dmirs.wa.gov.au