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Sweeping change coming for Victorian landlords

For Lease sign outside residential building.
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Victoria's new residential tenancies legislation is the biggest change to the state's rental laws in decades. Photo: Shutterstock

Sweeping change coming for Victorian landlords

The looming changes to the Residential Tenancies Act (RTA) in Victoria are significant, and it’s critical for landlords to get across them.

The looming changes to the Residential Tenancies Act (RTA) in Victoria are significant, and it’s critical for landlords to get across them. 

Symbolic of the sweeping reforms is a title change for landlords following the March 29 introduction of the new act. From then, landlords will be known as Residential Rental Providers, and with that new label comes 132 changes to the tenant/owner relationship, including increased cost, obligation and consequences for the owner.

While many of the reforms are reasonable, and indeed are requirements that smart and reasonable investors already obliging on, it’s the volume of change occurring at once that could be overwhelming. The fact that they arrive after an extremely difficult 12 months, courtesy of COVID-19 and its rental moratorium, makes things more challenging for some investors. 

Concerned with supporting everyday property investors, the Real Estate Institute of Victoria has prepared a guide to help ensure property owners are up to date on the raft of changes. 

Leasing a property: Restrictions will apply on the information requested from applicants. Some restrictions will help to avoid discrimination, while others could hide material information, such as bond history. Talk to your agent about strong reference checks as a counter measure. 

Modifications: Renters will be able to make prescribed minor modifications, like fixtures and fittings, without your consent. Consent will still be required for structural modifications, though some requests cannot be reasonably refused, and may need to be carried out by a suitably qualified person.

As a landlord, you have the right to ask for any changes to be restored at the end of the tenancy, and it’s still the renter’s duty to redress any resulting damage to the property. A restoration bond can also be requested to cover the future removal of fixtures for more extensive or impactful modifications. 

Property conditions and maintenance: You will need to ensure rented premises are provided and maintained in good repair, and in a reasonably fit condition for occupation. This is irrespective of whether the renter knew about any disrepair before signing the lease, amount of rent paid, or the age and character of the building.

Before March, make sure you get up to date on the minimum standards and guidelines on wear and tear, energy efficiency ratings and ventilation checks, as detailed in the Regulations. It’s also important to look into the ongoing service requirements for appliances such as air conditioning units and heaters.

During the period of the lease, it’s a renter’s responsibility to provide you with notice of any damage or faults immediately. 

Notice to vacate: A notice to vacate can still be given for a valid reason, including the property’s sale, change of use or demolition, or if you’re intending on moving into the property. If a renter intentionally or recklessly causes damage to the property, endangers or threatens you, an agent, a neighbour, or contractor, you can provide them with a notice to vacate.

There are substantial changes to these laws and impacted owners should reach out to their property managers to discuss.

Renter-initiated bond claim: Bond claims can now be made individually by the renter or owner. If a bond claim is made individually, the Residential Tenancy Bond Authority must notify the other party, but if no response is claimed, the bond will be paid out to the applicant. 

To ensure any property damage is paid for by the renter, it’s important that you work with your agent to ensure end of lease inspections are conducted promptly, and bond claims completed in the required time frame. 

Penalties: The new reforms will see some fines more than double, while other penalties will sit at ten and even up to 24 times the previous fine cost. 

At the REIV we’re seeking urgent clarity from the government on the compliance program, and how decisions will be made to invoke these penalties. 

Timing: Some of the new requirements only apply to tenancy agreements entered into on or after the 29 March 2021.

The changes aren’t as simple as picture hooks and pets, as some reports have suggested - they will be significant for the sector and impact renters and owners equally. 

Residential rental providers, in particular, would be wise to work with their property manager to understand the new requirements to help ensure they continue to get value and enjoyment out of their property investment. 

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