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How do the potential changes to the Residential Tenancy Act affect you?

Seaside Asset Management Group Oct 12, 2017 0 Comments

Since early 2015 the Victorian Residential Tenancy Act as been under review and the government has just released potential changes- (pending review)

After working in the industry for many years these changes in my opinion are going to heavily impact not just owners but also tenants.

Some of the major potential changes include:

  • The potential for fixed term leases in excess of 5 years

What does this mean?

Currently, it is widely suggested that initial lease terms (for a new tenancy) commence on a 6 or 12-month tenancy. In a nutshell, if the lease isn’t going to well (tenant not maintaining the property or continually late with the rent- however not “late” enough to evict the tenant on the basis of rental arrears) you can simply issue the tenant with a 60 or 90-day notice to vacate (depending on the initial lease term)

  • Improvements to minimum health and safety standards for rental properties

 What does this mean?

I agree with this potential change, I have seen some atrociously maintained properties- down to           water leaks that have gotten that bad that fungi is growing inside the property…. Yes…. mushrooms!!!! The act will set minimum standards for property condition perhaps an overhaul of the wording “reasonably clean”

 

  • Ensuring that a tenant has landlord consent prior to listing a home on Airbnb

What does this mean?

Currently, landlords do not have any control over a tenancy listing the property on Airbnb (also similar sites) did you know that landlords are not currently protected under the residential tenancies act? With “discount” accommodation becoming more and more common this is an imperative move, especially within the Mornington Peninsula and inner-city suburbs.

 

  • Restricting rent increases to every 12 months

What does this mean?

Currently a landlord is able to increase the rent (consistently with market value) every 6 months. Despite a market increase a landlord will need to wait 12 months before being able to increase the rent.

 

  • Removal of “no pets” clauses without fair reason

What does this mean?

It’s not widely known across renters; however, pets are not currently covered in the residential tenancies act. This is an item that has been largely debated for a long period- agents/landlords aren’t able to enforce a clause in a lease agreement that is contradictory to the residential tenancies act (or simply not listed) However, the vast majority of your average family do have pets- in my experience I have seen homes that do have pets far more well maintained than homes that don’t….

 

Other proposals include:

  • Mediation services
  • Blanket ban on rental bidding (in high demand areas)
  • Also changes to give more options to victims of family violence.

 

While comprehensive, there have been some mixed responses to the options paper.

 

The Real Estate Institute of Victoria (REIV) responded to the paper, largely praising the decisions put forward but criticising others. In particular, REIV President Joseph Walton approved proposals on removing “no pets” clauses, requiring approval for Airbnb or modifications and improvements to mediation and dispute resolution.

 

However, the REIV did express disappointment at the advancement of other changes. Notably, it does not see the need for further expansion on minimal rental property standards, with Walton claiming it will increase costs for both landlords and tenants, especially at the lower end of the property market.

 

“Minimum standards for residential property are already established in Victoria – as set out in the Victorian Building Regulations and Codes,” his statement reads.

 

For more information visit the below link:

https://engage.vic.gov.au/fairersaferhousing

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