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Understanding Victoria’s new tenancy laws

You may have heard the state Government recently announced a number of reforms to Victoria’s tenancy laws. If you’re a renter or budding investor, here’s the 411 on the new changes you need to be aware of before they come into effect in 2018:

 

Rental pricing

With the announcement of several rent-bidding apps set to launch in Australia next year, the Victorian government aims to put a stop to the practice of ‘rental auctions’ once and for all. Under the new changes, landlords will be expected to put their best foot forward when advertising a property by setting a realistic price up front.

 

Landlords and property managers together will be required to advertise their listing at a fixed price, without inviting prospective tenants to make an offer above the advertised price. Going forward, landlords will only be able to increase the rent on their properties once every 12 months instead of every 6, and the changes must be reasonable when compared to the market.

 

Tenant rights

A Commissioner for Residential Tenancies will be appointed to offer tenants advice and to advocate on behalf of Victorian renters in the Private sector, and a public landlord and agent ‘blacklist’ will be released to help identify those who have previously breached their obligations under the Residential Tenancies Act 1997 (RTA).

 

The new landlord blacklist will work hand-in-hand with the existing tenant blacklist, helping people on both sides of rental agreements to feel secure in their arrangement.

 

Security in renting property

According to Consumer Affairs Victoria, despite short-term rental agreements being the norm in Victoria, more than 1 in 5 renters have been in their home for longer than 5 years. A new optional standard long-term lease agreement is in development to help facilitate rental agreements longer than 5 years.

 

Additional reforms being introduced to encourage long-term rental agreements include the abolition of the 120 day ‘no specified reason’ notice to vacate, and limitations to the use of ‘end of fixed term’ notices to vacate. Landlords will only be able to end a tenancy for reasons specified in the RTA.

 

Faster payments of bonds

Bond payments are often a point of contention for renters and landlords alike, but the new reforms aim to make the process easier on both parties. The Government is introducing 14-day automatic bond repayment, where either party can apply to the Residential Tenancies Bond Authority (RTBA) at the end of the end of the tenancy period to have all or part of the bond released with or without the other party’s consent.

 

Under these reforms, the landlord will have 14 days from lodgement to dispute the claim before it is paid out by the RTBA. The changes also mean that the bond can be released up to 14 days before the end of the rental agreement, rather than 7 days, and will prevent bonds of more than one month’s rent for any property where rent is less than double the median weekly rent.

 

Pets and modifications

 

Owning a pet can make renting property difficult, but tenants will now be given the right to keep a pet. Of course there are requirements that need to be met which include obtaining written consent from the landlord and agreeing to undertake cleaning or fumigation for pet-related damage, which is consistent with their existing duty not to damage the property.

 

Additionally, tenants are now able to make minor modifications to a property and landlords will not be able to unreasonably refuse consent to certain types of modifications. This includes the hanging of picture hooks or the installation of modern communication technology. However, the landlord can request the tenant hires a suitably qualified person to make the modifications.

 

While the rental reforms are seen as a big win for renters, it’s not all bad news for landlords with an investment property. Developing long-term relationships with quality renters can take the pressure out of investment properties and help to strengthen the rental market, with landlords able to feel secure knowing their property is in safe hands.

 

You can find out more about the reforms here.

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