News & Events

December 14th at 9:30am

REFORMS TO THE RESIDENTIAL TENANCIES ACT



Landlords must give a reason to end a tenancy

We will remove the 120 day ‘no specified reason’ notice to vacate from the RTA. In practice, this will mean that landlords will only be able to end a tenancy for a reason specified in the RTA.

Limit the use of the ‘end of fixed term’ notices to vacate

Landlords will only be able to end tenancies using an ‘end of fixed term’ notice to vacate at the end of the first fixed term. At the end of any subsequent terms, a landlord will only be able to end a tenancy using one of the grounds specified in the RTA. This will encourage longer term leasing arrangements to become the norm.

For tenants who receive an ‘end of fixed term’ notice, they will now be able to give 14 days’ notice to vacate the property, rather than having to pay rent until the end of the fixed term. This will stop tenants missing out on new homes because they have to wait until the end of the fixed term, or paying double rent when they find a new home.

It is unfair for a tenant to live in fear of being told, without reason, to vacate the property at the end of their lease. Without this change, the ‘end of fixed term’ notice would simply become a new version of the ‘no specified reason’ notice.

False, misleading or deceptive representations

A landlord or agent will be prohibited from making false, misleading or deceptive representations to induce a tenant to enter into a residential tenancy agreement.

If the landlords breach of this requirement is serious enough, the tenant will be able to go to Victorian Civil & Administrative Tribunal (VCAT) to end the tenancy or seek compensation.

This reform will promote accuracy and honesty in the rental market, while ensuring trivial misrepresentations are not used as an excuse by tenants to end tenancies.

Pre-contractual disclosure

Requiring pre-contractual disclosure by landlords of the known presence of asbestos in premises, and other important information to the tenant before they sign on the dotted line, including any proposal to sell the property, or if the landlord knows of any asbestos previously identified at the property.

Landlords will be required to disclose certain important information to the tenant before they sign on the dotted line, including any proposal to sell the property, or if the landlord knows of any asbestos previously identified at the property.

Long term leases

Many Victorians want the certainty of a longer term lease. And despite short leases being the norm in Victoria, more than 1 in 5 renters have been in their home for longer than 5 years.

To give renters greater security, a new optional standard long-term lease agreement is under development. Our new laws will mean that landlords and tenants wishing to enter into arrangements of more than 5 years will now benefit from the protections in the RTA.

The reforms require amendments to Residential Tenancies Act 1997. The process to amend the RTA is underway.

Commissioner for Residential Tenancies

A Commissioner for Residential Tenancies will be appointed to champion the rights of Victorian renters in the private sector.

The Commissioner will consult widely with tenant and consumer advocacy groups  across the rental sector to identify systemic issues and will give tenants a voice in seeking changes to renting laws over the years to come.

Landlord blacklist

Currently, tenants who breach their obligations under the Residential Tenancies Act 1997 (RTA) may find their names on tenant ‘blacklists’. Landlords and real estate agents will now be subject to similar measures.

We will create a landlord and agent ‘blacklist’ which will be available to all tenants so they can identify landlords and agents who have previously breached their obligations under the RTA.

The reforms require amendments to Residential Tenancies Act 1997. The process to amend the RTA is underway.

14 day automatic bond repayment

Under this reform, either party will be able to apply to the Residential Tenancies Bond Authority (RTBA) at the end of the tenancy to have all or part of the bond released either with or without the other party’s consent.

If both parties agree, the RTBA will pay out the bond in full or in accordance with instructions from the parties as to any apportionment within 14 days.

If either party has not consented to the bond being paid out, the RTBA will notify that other party, which then has 14 days to notify the RTBA if they are disputing the claim. If not the bond will be automatically paid out.

This reform will mean that, in practice, tenants will lodge their bond form and if the landlord does not dispute the bond within 14 days, the tenant will be paid out by the RTBA.

Early release of bond

Currently, the parties to a tenancy can mutually agree to the release of the bond before a tenancy has ended and tenant can apply for the release of the bond seven days before the end of the tenancy.

To help alleviate financial stress, and to better facilitate these private agreements between exiting tenants and landlords, we will amend existing provisions in the RTA governing the return of the bond where a tenancy has not yet ended.

Tenants can seek agreement from their landlord for their bond to be released up to a month before the end of the tenancy, and the bond can be paid out as agreed up to 14 days before the end of the tenancy, rather than 7 days.

Updated bond cap & up-front rent cap for most properties

Current arrangements for the cap on maximum bonds and up-front rent are outdated and apply to less than half of all rental properties in Victoria. This means that many tenants are exposed to paying more than one month’s bond and rent in advance.

The reforms prevent bonds of more than one month’s rent for any property where rent is less than double the median weekly rent, except where the landlord has obtained an exemption.

Upfront rent will also be limited to one month’s rent for these properties.

By linking reforms to the median weekly rent – which is currently $380 – the cap on bonds and up-front rent will cover the vast majority of rental properties in Victoria into the future.

Only landlords who have obtained an exemption from VCAT will be able to require a bond of more than one month if the weekly rent is below double the median rent.

These reforms are needed to improve the affordability of the upfront costs of renting, while still allowing landlords to protect truly high-value properties.

Faster repairs reimbursement

The one of the most frequent concerns expressed by tenants requesting a repair was that urgent repairs take too long to resolve. Some repairs require immediate attention and it may not be reasonable for a tenant to wait until the landlord can resolve it.

Tenants who have paid for urgent repairs up to the authorised limit will be able to seek reimbursement from the landlord for the reasonable costs of repair within 7 days, instead of 14 days.

This will reduce the amount of time tenants are out of pocket for urgent repairs that the landlord should have covered.

A failure by the landlord to reimburse the tenant will entitle the tenant to seek a compensation order from VCAT. A breach of a compliance order would expose the landlord to being ‘blacklisted’.

The reforms require amendments to Residential Tenancies Act 1997. The process to amend the RTA is underway.

Rent increases

Tenants often struggle to plan for frequent rent increases. The frequency of rent increases can impact on a tenant’s ability to meet the ongoing costs of their accommodation.

We know cost of living pressures are only getting harder. Less frequent rent increases will help tenants manage cost of living pressures.

Rent increases are changing from being able to be increased every 12 months instead of every 6 months. Rent increases must be reasonable. Tenants have the right to appeal to VCAT if they believe an increase is excessive compared with the market rent.

Cracking down on rental bidding

Rental bidding can lead to reduced transparency for rental applicants and increase search costs if properties are advertised at a price lower than a landlord is willing to accept.

Landlords will be expected to put their best foot forward from the outset of the rental process by settling on a realistic fixed price, enabling applicants to broadly rely on the advertised price when looking for their next rental property

All landlords and agents must:

  • be advertised at a fixed price (no ranges or ’price plus’ advertising)
  • not invite prospective tenants to make an offer at a price higher than the fixed price (including via technology platforms)

Pets in rental property

Tenants will be given the right to keep pets provided they obtain the landlord’s written consent first. Landlords will not be able to unreasonably refuse the request.

An outgoing tenant will be required to undertake cleaning and fumigation if there is pet-related damage to the property that goes beyond fair wear and tear. This is consistent with their existing duty not to damage the property.

Landlords cannot refuse consent for assistance dogs.

Tenants can make minor modifications

The landlord may require the tenant to use a suitably qualified person to make the modification. A suitably qualified person would include someone who is licensed or otherwise has the relevant expertise to carry out the modification.

In the case of disability-related modifications, assessment to determine the need for home modifications would be conducted by accredited occupational therapists, or other allied health practitioner as appropriate. Where appropriate, tenants could rely on an existing assessment.New Red M 2017.jpg