Changes to Property Management Law in Victoria 2021
In March this year, a wide range of sweeping reforms were made to rental and property management law which created a wide range of changes for landlords, tenants and property management companies alike.
As a resuly, property management in Melbourne has changed and Melbourne property managers are working hard to keep up with the new changes.
When did the new property management laws come into effect?
Due to the COVID-19 pandemic, the Victorian government’s Residential Tenancies Reform Act 2018 was postponed, and the changes were implemented on March 29, 2021, rather than July 1, 2020, as originally planned.
The changes include a total of 132 new reforms in the new legislation, which cover everything from the rules for beginning a tenancy, staying in a rental, leaving a rental, and renovations and improvements, to rooming houses, caravan and residential parks, family and personal abuse situations, long-term leases, and other amendments.
Tenants’ associations and the real estate industry have had mixed reactions to the changes, with some applauding the policy changes and others arguing that it could lead to a rise in rental and management fees.
What do the new property management laws change?
The new laws create a wide range of changes that change every single facet of renting in Victoria.
- Starting or entering into a lease
- Living in a rental property
- Leaving a rental property
- Repairs and modifications to a property
- Property conditions
There are also reforms specific to:
- Rooming houses
- Caravan parks and residential parks
- Family violence and personal violence
- Long-term leases
What you need to know about the new property management laws before you sign a new lease.
If you’re a landlord looking to fill a vacant property, here are how things have changed for you:
- Only fixed-price rentals are now possible. Rental suppliers and brokers are unable to invite higher-rent rental bids.
- To persuade someone to sign a rental agreement, rental providers and agents cannot make false or misleading statements.
- Discrimination against tenants based on personal characteristics such as age, ethnicity, faith, or disability is illegal.
- Inappropriate details, such as the renter’s bond history, cannot be requested in a rental application by a rental provider or their agent.
- For properties with a rent of $900 per week or less, rental companies cannot ask for or accept more than one month’s rent as a bond, nor can they expect landlords to pay more than one month’s rent in advance.
- Before a renter signs a contract, the rental company must inform them whether the property is for sale, both orally and through Consumer Affairs Victoria.
- Pets cannot be denied without cause, but tenants must also request permission.
What do the new property management laws mean for existing rental agreements
The new laws also mean big changes for existing property management rental agreements. These include:
- The definition of urgent repairs has been broadened to include serious flaws that jeopardise the property’s safety and usability.
- Just once a year will the rent be raised.
- Simple improvements, such as installing child protection equipment or removing curtains, may be made by renters without obtaining permission.
- Allowing other changes that a rental provider cannot reject without cause, such as allowing the renter to plant a vegetable or herb garden, paint, secure gates, and instal security systems and flyscreens at his or her own expense.
- Gas and electricity inspections are required every two years by rental providers.
- A phased requirement for leased properties to have energy efficient heaters so that tenants can keep warm without having to think about their electric bills.
Ending a rental agreement under the new property management laws
Here is how the new property management laws will change things for landlords looking to end a rental agreement:
- Renters will no longer be evicted without cause; a legitimate excuse must be given, such as a sale, a change of use, or whether the owner is relocating.
- If a renter is abusive or threatening to a rental company, agent, or neighbour, they can be evicted.
- In some cases, renters who are victims of domestic abuse will be entitled to alter or break their rental arrangement and will not be held responsible for damages.
- Renters may apply to the Residential Tenancies Bond Authority (RTBA) to get all or part of their bond released if they can’t get their rental provider’s agreement.
- VCAT must first determine whether issuing an eviction possession order is fair and proportionate in the circumstances of the application.
What do the new property management laws mean for landlords
With over 130 reforms, it goes without saying that these new laws mean big changes for landlords.
Depending on the age and condition of your property, you might only notice a few changes, or you might notice a lot of changes that will suddenly mean you are required to make big investments in your property.
Below, we summarise some of the key changes for landlords and what they mean.
Minimum Rental Standards
Before a renter moves in, rental providers (that’s the new term for landlords) must ensure that their rental property meets minimum rental requirements in terms of amenity, protection, and privacy, and condition monitoring is required regardless of whether a bond is taken.
The renter may either cancel the rental agreement before moving in or request an urgent repair at any time after moving in if the rental property does not meet the minimum rental requirements.
Rental providers now have a legal obligation to ensure that their rental property meets the rental minimum requirements under the new legislation.
The following facets of a property are covered by the new minimum standards:
- Door locks,
- vermin-proof bins,
- bathroom facilities,
- kitchen facilities,
- laundry facilities,
- structural soundness,
- mould and dampness,
- electrical protection,
- window coverings,
- and heating
We have summarised the key minimum standards as being:
- Except for any screen door connected to an external door, all external entry doors to the rented premises that are not able to be protected with a working deadlock must at least be fitted with a locking mechanism that is controlled by a key from the outside and can be locked from the inside with or without a key.
- The ventilation requirements in the Australian Building Code must be met by rented premises.
- The local authority must have vermin-proof bins that are in compliance with council regulations.
- A working toilet is needed in rented premises.
- A suitable hot and cold water supply, a washbasin, a shower/bath, and a minimum 3-star rated showerhead are all needed in the bathroom.
- A dedicated food preparation area, a sink with hot and cold water, and a working stovetop with two or more burners are all needed in the kitchen.
- If a laundry is given, it must have access to a sufficient supply of hot and cold water.
- The structure of the rented space must be sound and weatherproof.
- Each space must be free of mould and damp caused by the foundation of the building.
- From March 29, 2023, the rental property must have electrical safety switches mounted.
- Both windows in bedrooms and the living room must be covered to provide protection and block light.
- External windows that can be opened must have the option of being opened or closed.
- If there are no locks, latches must be used to prevent access from the outside.
- Light must be available in all interior rooms and corridors. It can be normal or man-made.
- Natural and artificial light must be available in all habitable rooms (such as a bedroom, dining room, or study).
Repairs and replacements relating to air conditioning, safety equipment, and any malfunction or harm that renders the rental property unsafe or uninhabitable are all considered urgent repairs under the new reforms.
- The amount of money that can be reimbursed for immediate maintenance has been raised.
- Within seven days after receiving written notice from the renter, the rental provider must reimburse the renter for the appropriate cost of urgent repairs.
- If the rental provider does not complete the notified repairs within 14 days, renters may apply directly to VCAT for non-urgent repairs.
Notice to vacate
A notice to vacate can be issued by a rental provider if:
- The protection of neighbours, the rental provider or their agent, or a contractor or employee of the rental provider or their agent is jeopardised by the renter or their visitor.
- The renter or a visitor to the rental provider or their agent, or a contractor or employee of either the rental provider or their agent, has been seriously threatened or intimidated.
- A renter or their visitor causes significant harm to the rental house, including any protective devices or common areas, by their actions or omissions.
Have a question about new property management laws? Contact our expert Melbourne property management team!
With decades of experience in both small and large agencies both locally and globally, we felt compelled to devote ourselves to individualised operation, long-term relationships, and de-mystifying the property industry, which we have been doing since 2009.
We’re here to assist you in obtaining the highest possible price for your home or investment property. We’re not your usual real estate agents, and we don’t do things the way they’ve always been done. Our dedication to your complete satisfaction is unrivalled, and we won’t quit until you get the results you want.
When you work with us, you’ll notice that we keep it straightforward, without the jargon, music, and dance that you might expect from other companies. We’re honest, down to earth, and committed to doing it the right way.
We can answer any questions about how your investment in your property has changed in light of these new laws.
Contact us today for more information!