The aim of the reforms is to remove friction for renters, make the market fairer, and bring the provision of accommodation in line with general community expectations for commerce and business.
Landlords and tenants are quaint historical words of yesteryear, and the amendments legislate for “rental providers” and “renters” who enter “rental agreements” with each other. (Section 1(a)(i) of the Residential Tenancies Amendment Act 2018 (Vic))
If you are investing in residential property in 2021, here is a list of fifteen need-to-know changes that will affect your day-to-day contractual duties towards renters.
1. Rental Security
Section 91ZZM(2) of the Residential Tenancies Amendment Act ends no-grounds evictions. To end a rental agreement early, rental providers must provide a valid reason such as:
- sale;
- change of use;
- demolition of the rental property; or
- the rental provider moving back into the rental property.
2. Duty to Disclose
Section 30D recognises the importance for renters to have stability in their rental agreements. Before entering into a residential rental agreement, rental providers are required to disclose:
- any proposal to sell the property;
- mortgagee action to possess the property;
- that they have a legal right to let the property if they aren’t the property owner.
3. Misleading Conduct Prohibited
Section 30E brings rental agreements in line with other consumer protections. It prohibits rental providers and their agents from inducing a rental agreement by engaging in conduct that is misleading or deceptive, or that is likely to mislead or deceive.
4. Ban on Bidding
Rental providers may no longer invite rental applicants to bid on a rental property. Rental properties may only be advertised for a fixed price and rental providers and agents are banned from inviting rental bids (although not from accepting them)(s 30F).
5. Minimum Rental Standards
Section 65A will require rental properties to meet “minimum standards”. The final list of minimum standards will be in the Residential Tenancies Regulations 2020 before April 2021. If standards are not met, the renter may issue a request to the residential rental provider for urgent repairs.
6. Allowing Pets
A rental provider must not unreasonably withhold consent to pets on the rented premises. If a renter requests permission to keep a pet, consent is taken to be given unless the rental provider applies to VCAT under section 71D within 14 days (s 71C).
7. Property Modifications Permitted
Section 64 is amended to allow renters to make prescribed modifications without the rental provider’s consent. The full list of prescribed modifications, likely to be minor in nature, will be available by April 2020. Without the rental provider’s written consent, renters must not:
- install any fixtures on the rented premises; or
- make any alteration, renovation or addition to the rented premises that are not prescribed.
8. Rental Arrears
There are new rules for notices to vacate for overdue rent. Under the s 331(4), a notice to vacate on the grounds of overdue rent will be dismissed where:
- the renter paid the arrears before the termination date specified in the notice;
- up to four times in a 12 month period.
This grace period ends if the renter fails to pay rent a fifth time in the same 12-month period. Then you may issue a notice to vacate and apply to VCAT for a possession order.
9. Public Register
Pay attention to the new requirements of being a rental provider, because pursuant s 10B, there will be a Rental Non-Compliance Register.
Rental providers found who have committed an offence under the Residential Tenancies Act 1997 will have their name, rental property address and nature of their offence listed on the CAV rental non-compliance register. VCAT can also order an agent to disclose the rental provider’s details for the purpose of legal proceedings.
10. Professional Cleaning
A common fear of every renter was the exorbitant “professional cleaning” fees taken out of the bond after vacating the property.
Now, any requirement in a rental agreement that the renter must have the property professionally cleaned before vacating will only be valid if it is a term is contained in the standard form and needed to return the property to the condition it was in at the start of the tenancy, taking into account fair wear and tear (ss 27B and 27C).
11. Protecting Victims of Violence
It only makes sense that if a victim of violence has to break a renting agreement for their personal safety, they shouldn’t be penalised. This common sense attitude is now incorporated into the Act.
Section 91V of the Residential Tenancies Amendment Act provides for applications to terminate a rental agreement because of family violence or personal violence. VCAT must hear an application within 3 business days of the application being made. Pursuant to s91W, VCAT will be able to make orders:
terminating the existing residential rental agreement; and
requiring the residential rental provider to enter into a new residential rental agreement with the specified person and other persons (if any).
Where a rental agreement is terminated due to family or personal violence, rental providers and their agents are prohibited from listing the victim on a residential tenancy database. (s 91W)
Victims of family or personal violence are no longer liable for their perpetrator’s debts under the rental agreement. Pursuant to s420A and 420B of the Residential Tenancies Act, liability may apportioned between renters, including making a renter who committed the family violence or personal violence liable for all of the residential rental provider's loss and damage including any unpaid rent. The portion of the bond paid by the renter who experienced family violence or personal violence is also excluded from the bond available to compensate the residential rental provider for loss and damage.
12. Rental Increases
Section 206SA limits rental increases to once per year. This reform also applies to rooming houses, caravan parks and residential parks.
13. Advertising material
Section 89A requires you to give seven days’ notice to a renter to enter the property, and make a reasonable attempt to arrange a time that suits the renter if you want to take images or videos of a rented property. Renters will be able to prevent the taking of photos or videos, or the use of photos or videos, in certain circumstances.
14. Renter’s Safety Obligations
Renters do have new obligations under the amendments too, giving the rental provider the power to issue a notice to vacate where:
- a renter is endangering safety (s 91ZJ);
- a renter threatens or intimidates (s 91ZK);
- a renter intentionally or recklessly causes serious damage (s 91ZL).
15. Existing Agreements
If you already have a rental agreement, you will be exempt from some of the reforms if the rental agreement was signed before 1 July 2020, at least until that agreement is terminated and a new agreement is signed. If you need specific advice about your rental obligations, speak to a property lawyer or your property manager.
Read the full amendments
here.