What you need to know about the revamped Residential Tenancies Act

The State Government’s revamped Residential Tenancies Act, which will be fully enacted by July 2020, includes more than 130 reforms that aim to increase protections for renters, while ensuring rental housing providers can still effectively manage their properties.

Here’s a snapshot of what landlords and tenants can expect from the changes:

Long leases

Many tenants stay in their rented home for more than five years. The new long lease agreement, a key reform in the new Act, will make it easier for landlords and tenants to agree to longer leases.

Remove 120 day ‘no specified reason’ notice to vacate

Currently, if a tenant is renting month to month, the landlord can tell the tenant to leave with 120 days’ notice. For this kind of notice, the landlord does not need to give a reason.

Victoria’s Government is changing the law so landlords will only be permitted to end a tenancy if they give a reason specified in the Act. Example reasons are if the landlord is selling or renovating the property.

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

The reforms will change the current system where a landlord can end a tenancy after any fixed term, even if the tenant has rented the property for more than one term.

Under this reform, a landlord can only end a tenancy using an ‘end of fixed-term’ notice to vacate at the end of the tenant’s first fixed term agreement. For any later fixed terms for the same tenant, the landlord can end the tenancy using one of the grounds specified in the Act. Another change to the Act means that if a tenant gets an ‘end of fixed-term’ notice they can give 14 days’ notice to leave. They will not have to wait until the end of the lease.

Honesty and accuracy

Landlords will have to tell a prospective tenant some kinds of information before they sign a rental agreement with them. For example, the landlord would need to tell the tenant if they are planning to sell the property during the term of the agreement, or if the landlord knows that asbestos has been found on the property.

Under the reforms, the landlord or agent must not tell the tenant any incorrect information or neglect to tell them something about the property as a way to get them to sign a lease.

New landlord blacklist

The Government will create a landlord and agent ‘blacklist.’ The list will be available to all tenants so they can identify landlords and agents who have previously breached their obligations under the Residential Tenancies Act. This is aimed at keeping the system fair for tenants. The Act already allows for a ‘blacklist’ of tenants.

Faster bond repayment

The upgraded Act aims to speed up the system for repaying the bond to a tenant at the end of a tenancy. Under this reform, renters 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 with or without the landlord’s consent.

Early release of bond

In the current system, a tenant can apply for their bond to be released before the end of the lease. If the landlord agrees, the RTBA releases the bond seven days before the end of the lease. If both parties agree, the RTBA will now pay out the bond within 14 days in full or in accordance with instructions from the parties as to any apportionment.

If the landlord has not consented to the bond being paid out, the RTBA will notify the renter, who then has 14 days to notify the RTBA if they are disputing the claim.

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

New bond caps and up-front rent caps

Bonds will now be no more than one month’s rent for any property where the weekly rent is less than double the median weekly rent. Only landlords who have obtained an exemption from the Victorian Civil and Administrative Tribunal (VCAT) will be able to require a bond of more than one month if the weekly rent is below this limit.

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

Pets in rental properties

Tenants will have the right to keep pets, provided they obtain the landlord’s written consent first which can only be refused by order of VCAT. The onus will be on the landlord to get approval from VCAT to refuse consent to a pet, once they have received the request from the renter.

In the case of an assistance dog, consent cannot be refused.

An outgoing tenant may 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 and to leave it in a reasonably clean condition.

Allow minor modifications

Tenants will be allowed to make certain minor modifications to a rental property without first obtaining the landlord’s consent. The definition of ‘minor modifications’ includes picture hooks and furniture anchors to stop furniture toppling over and harming people, particularly small children.

Depending on the type of modification requested, the landlord may require the tenant to use a suitably qualified trade person. This would include someone who is licensed or otherwise has the relevant expertise to carry out the modification.

In the case of disability-related modifications, which can be more complex, an assessment may be needed to determine the need for home modifications. This would be conducted by an accredited occupational therapist or another health practitioner.

Reimbursement for urgent repairs

Tenants who have paid for urgent repairs up to the current authorised limit of $1,800 will be able to seek reimbursement from the landlord for the reasonable costs of repair within seven 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. Any 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’.

Fewer rent increases

Currently, the Act allows rent increases every six months. The reforms will mean that rent can only be increased every 12 months. The rent increases must be ‘reasonable’.

The tenant can appeal the increase at VCAT if the increase is unreasonable compared to other properties in the market.

Require fixed rent amount in advertisements

Rental bidding is to be outlawed in Victoria.

Landlords will be expected to set a realistic fixed price for the rent, enabling applicants to broadly rely on the advertised price when looking for their next rental property. All landlords and agents must now advertise properties at a fixed price (with no ranges or ’price plus’ advertising). They’re also banned from inviting prospective tenants to make an offer at a price higher than the fixed price (including via technology platforms).

A Commissioner for Residential Tenancies

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

It’s envisaged that 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.

 

Nelson Alexander Real Estate are committed to providing support, information and training to our Property Management team, so that our clients are best represented when these changes come into effect.

For further information on the new laws, and to prepare for these changes please visit www.consumer.vic.gov.au/housing/renting/changes-to-renting-laws or contact our Property Management team directly for further information, guidance or questions.