Blog

August 22, 2018

Residential Tenancies Act decision pending... what will this mean?

The Victorian State Parliament will this week vote on changes to the Residential Tenancies Act 1997, and if passed will deliver significant changes for both landlords and tenants.

Our current Victorian rental laws are 20 years old and since the Victorian State Government announced a set of reforms back in 2017, there has been much commentary and feedback from within the real estate industry.

The Real Estate Institute of Victoria (REIV) has been outspoken against the proposed reforms by the Andrews Government, which are aimed at giving renters more rights.

The REIV has advocated strongly against the proposed ‘Rent Fair’ legislation, on behalf of its 5000 members and their landlord clients. The online ‘Rent Fair is Unfair’ petition has garnered more than 20,000 signatures.

REIV Resident Richard Simpson says the proposed Residential Tenancies Act would swing the pendulum of rights overwhelmingly over to renters and strip landlords of the right to have a say over what goes on in their own properties.

The Andrews Government claims the outcomes of the 2015-17 review and proposed changes to the Act will ensure regulation of Victoria’s rental sector meets the needs of tenants and landlords.

The review examined issues including security of tenure, dispute resolution and the regulation of property conditions, and in October 2017 the following proposed reforms were announced:

  • Annualised rental increases.
  • Clearer rights about keeping pets.
  • Restrictions on rental bidding.
  • A landlord and agent blacklist.
  • Removal of landlords’ ability to terminate a tenancy for no specified reason.

According to the Andrews Government these reforms are part of a broader package that aims to promote a modern and dynamic rental market that meets the needs of the Victorian community now and into the future. Changes recommended as part of the review were introduced into the Victorian Parliament in 2018, and are currently being debated in state parliament.

The result is unknown at this stage, but we are on hand to assist both our landlords and tenants with questions and concerns if and when these changes are passed in state parliament.

Here’s a further breakdown of the proposed reforms.

Rental pricing:
• Landlords will only be able to increase rent every 12 months; they can currently increase it every six months.
• Landlords must advertise their rental properties with a fixed price attached, and will no longer be allowed to accept an offer at a higher price than advertised.

Tenant rights:
• The government is in the process of creating a landlord and agent ‘blacklist’, which will be publicly available so tenants can identify any landlord or agent who has breached their responsibilities under the RTA.
• Currently, a landlord can automatically include a 'no pets' clause in a rental agreement, but under the reforms tenants will be allowed to have pets on the provision the renter obtains a landlord’s written consent – landlords won’t be able to unreasonably refuse the request. Tenants will be responsible for any cleaning or fumigation related to property damage by a pet that goes beyond general wear and tear.

Faster payments and rental bonds:
• Tenants can now apply to the Residential Tenancy Bond Authority (RTBA) to have all or part of their bond released without their landlord’s agreement, and if there is no dispute within 14 days, the bond will be paid out.
• Tenants can now apply to have their bond released up to 14 days before the end of a tenancy, rather than seven.
• Unless they have obtained an exemption, landlords will no longer be able to charge a bond worth more than one month’s rent when the rent is less than double the median weekly rent (currently that’s $760).
• Tenants who have paid for urgent repairs will be entitled to reimbursement from the landlord after seven days, down from 14.

Rental security:
• Under current rules, landlords are allowed to end a tenancy for ‘no specified reason’, requiring renters to vacate their home after 120 days. The new law will require a landlord to give a reason for a termination of a tenancy agreement.
• Tenants who have received a so-called ‘End of Fixed Term’ notice will be able to vacate the property by giving their landlord 14 days notice, rather than continuing to pay rent until the end of the fixed term.
• Landlords will be required to tell tenants of important information related to the property, including future plans to sell or if asbestos has ever been identified at the property. Tenants will also be given the right to take their landlord to VCAT if a landlord has failed to properly notify the tenants of these issues.
• The option of having new, optional long-term-lease agreements is also in development.

Modifications:

• Tenants can make minor modifications (such as installing wall hooks) on the rental property on the provision they obtain the landlord’s written consent. Landlords will not be able to unreasonably refuse the request. Landlords may request a qualified person to undertake the modification.

Here at CLK we will be following the vote on these proposed changes closely, and if you require further information or clarification on any of the above points please call to chat with our Property Management team anytime on (03) 54 822 111.

Visit the Victorian State Government's website here for more details and also the REIV's website here for their views on the changes, and to keep up to date with the result from the Victorian parliament.

Image: thanks to shbbusiness.com.au