New rental laws are now in effect. With more than 130 updates, the current regulation increases landlords (now called rental providers) and tenants (now called renters) rights and obligations, focusing on improving transparency and enhancing Victorians’ rental experience.
The new rules cover a broad set of situations, from application forms to discrimination and domestic violence. To learn about the changes in detail, the Victorian Government provides a well-organised summary that can be found here.
If you are a property investor, it is important to be aware of the new rules that might affect your investment. As it may be overwhelming to go through all the updates, we have selected 16 key changes you need to know:
Starting a Lease
Rental providers cannot ask for or accept more than one month’s rent as a bond or require renters to pay more than one month’s rent in advance, for properties with a rent of $900 per week or less.
Rentals can now only be offered at a fixed price. Rental providers and agents cannot invite rental bids for higher rent.
Rent can only be increased once a year.
Rental providers or their agents cannot request inappropriate information in a rental application – for example, the renter’s age, bank transactions, bond history etc.
During a Lease
New minimum standards ensure that rental properties meet basic standards of cleanliness, security and privacy. These are the things most people would reasonably expect in a rental property - and most already have them. These apply in all new rental agreements after 29 March 2021. For more detail see rental minimum standards guide.
A staged requirement for rented properties to have energy-efficient heater so renters can stay warm without worrying about their electricity bills.
If a rental property is not up to minimum standards, renters can request an urgent repair.
Pets cannot be unreasonably refused, although renters must still ask for consent.
Modifications, Maintenance and Repairs
Renters can make simple modifications without seeking permission, such as attaching child safety devices or replacing curtains. Though the property needs to be returned to its original condition upon vacating.
Other modifications that a rental provider cannot unreasonably refuse include allowing the planting of a vegetable or herb garden, painting, securing gates and installing security systems and flyscreens at the renter's own cost.
More items are now considered urgent repair, such as a broken cooling appliance, a misfunctioning smoke alarm, pest infestation, mould and meeting the rental minimum standards.
Rental providers are responsible for conducting gas and electrical safety checks every two years.
Ending a Rental Agreement
When a renter pays back overdue rent within 14 days, any notice to vacate issued by the rental provider for that overdue rent is invalidated (the first four times that happens in a year).
Renters experiencing family violence can change or terminate their rental agreement and not be held liable for damages in some circumstances.
Renters can no longer be evicted for no reason - a valid reason is required, including a sale, change of use, or if the owner is moving back in.
New processes are available so that a renter can seek the return of their bond at the end of the rental agreement without the rental provider’s agreement.
Common Questions
We asked our Director and Head of Property Management Mandy Meng to clarify some points of the new rental regulations from a rental provider’s perspective.
1. With so many new regulations coming into effect, how can a rental provider prepare for a new leasing campaign?
Rental providers must be aware of the new advertising rules. Fixed price is now the only option. It's not possible to advertise properties with a price range or ask for rental bids. It is also illegal to stop someone from renting due to specific personal characteristics like age, employment or career status, for example.
To comply with the new law, rental providers also need to prepare a disclosure statement informing prospective renters about property's condition such as embedded electricity network, electricity and gas safety checks, mould or damp repairs, contract of sale, to name a few.
2. The new rental rules are in place from 29 Mar 2021. Does it affect the leases that are already in place?
Most of the current rules apply to all rental properties, regardless of the rental agreement's starting date. Generally speaking, some of the new requirements, such as the new set of minimum standards and updated application forms, won't apply to agreements made before 29 Mar 2021 where renters are still in fixed term lease, but will apply once the lease becomes periodic. Properties rented on or after 29 Mar 2021 will need to meet basic standards, such as having fitted heaters, hot and cold water, functioning sinks, cooktops and ovens.
3. Most of the newer buildings are already energy-efficient, have a heating system and sound infrastructure. Regarding the minimum requirements, are there any concerns for newer properties?
The current changes will be undoubtedly more concerning for older properties, which can be problematic in terms of mould, ventilation, electrical safety and gas compliance. As newer developments are usually built according to sustainable standards, the new legislation just formalises quality levels and makes real estate practices more transparent.
A particular change that requires attention is the gas and electrical safety check. All rental properties are now required to have the electrical safety and gas checked by a qualified tradesman every two years. Smoke alarm inspection once a year is now mandatory, although some real estate agencies have already been doing it as a routine for tenants' safety and landlord's peace of mind. So, for our Clients specifically, the smoke alarm component doesn’t change.
4. The new law mentions that the renters must leave the apartment in a reasonably clean condition. Is the professional end of lease cleaning not mandatory anymore?
Not really. In fact, this change is quite positive for property owners. The new law clarifies in which situations the renter is expected to hire professional services when moving out. If the property has been professionally cleaned immediately before the renter moves in, it is possible to include a term in the rental agreement establishing that the renter must “return the property to the condition it was in at the start of the rental agreement, taking into account fair wear and tear.”
Team SONI can help
Our Property Management team works with a simple philosophy of managing your property like it is our own. We are focused on providing an excellent service to our investors by going above and beyond every single time.
If you have any questions about these recent changes and their impact on your rental property, reach out to our team today. Our team can assist you to get the most value for your property with a tailored up-to-date strategy.