One of Australia's largest student accommodation providers has been been forced to pay almost $90,000 after making false and misleading claims to students and failing to put their rental bonds in a trust.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
An investigation by Victoria's consumer watchdog found UniLodge Australia breached tenancy and consumer laws in one of its Melbourne CBD buildings.
As a result of breaking the law, Queensland-based UniLodge was required to pay $40,000 to the Victorian Consumer Law Fund and another $47,024.80 to the Residential Tenancies Fund to repay the interest it earned while holding students' bonds.
Consumer Affairs launched an investigation into UniLodge after a complaint from a student in 2014.
The breach comes at a time when large student accommodation providers are ramping up their presence in Australian capital cities, as education expands into a key sector of the economy.
UniLodge, which has backing from a Quebec pension fund, owns or manages 56 buildings in Australia and New Zealand and lists 4633 student units in Melbourne on its website, 1890 in Sydney, 878 in Brisbane and another 2979 in Canberra.
Australia's undersupplied student accommodation market has been targeted by many other international providers, including Scape, Iglu, Blue Sky and Urbanest in Sydney and Melbourne.
Frasers Property Australia is reportedly in the process of selling two student accommodation blocks in inner Sydney's Central Park precinct for about $400 million.
Tenants Union policy officer Yaelle Caspi said many students living in large-scale student accommodation were from overseas and didn't "necessarily know what their rights are here".
Ms Caspi said the sector was rife with non-compliance and her organisation received multiple complaints about similar issues.
"Large providers are able to get away with more because they hold significant market power. This action by Consumer Affairs shows that there are consequences for non-compliance," she said.
Victorian consumer law requires landlords to lodge rental bonds paid by tenants with the Bonds Authority within 10 days of receiving the money.
The target of the investigation was the UniLodge on A'Beckett building, a 109-room hostel with 77 self-serviced apartments at 106-116 A'Beckett Street in the northern end of Melbourne's CBD.
The Consumer Affairs probe found UniLodge provided students with "false or misleading" occupancy agreements that misrepresented the rights and remedies available to students.
The occupancy agreements gave UniLodge complete control of the students' rooms and apartments, allowing unrestricted access at any "reasonable" time.
The company also gave itself the right to deduct money from student bonds in certain circumstances, as well as failing to pay the money to the Bond Authority.
UniLodge was required to give an enforceable undertaking that it would fix any contraventions. It repaid the bonds in full when first notified of the investigation in early 2015, except for deductions authorised by the tenant.
UniLodge is set to expand further, recently snapping up a North Melbourne development site at 15-27 Wreckyn Street from Malaysian developer Mammoth Empire for $17 million.
The site, formerly owned by Lort Smith Animal Hospital, had planning approval for 189 apartments, which are expected to be altered to accommodate about 350 student units.
Licensed estate agencies, College House Management Pty Ltd and 746 Student Services Pty Ltd - which manage apartments and hostels in the A'Beckett building on behalf of UniLodge - were also required to sign enforceable undertakings.
UniLodge was contacted for comment.
