There are some changes to rental rules for investment property in Victoria starting on 25th November. We detailed this in April this year but the time has now arrived.
Rental rules to the Victorian Government feel like an iPhone to a 15 year old… they just can’t seem to put it down and leave it alone. 😀
Most of the changes are administrative and are designed to give renters more certainty and protection which is important. In practice, owners or agents of well maintained, well managed property with a good relationship between the owner, agent and renter will see very little impact.
Like many government changes, there are unintended consequences that can unfortunately make it worse for renters. Some of the changes make it more difficult or drawn out for an owner to end a lease if they are selling or moving in themselves. This means owners and agents will need to be extra vigilant about who they rent a property to in the first place. This will therefore make the rental market harder for many first time renters or those on a lower income.
Another change bans owners or agents from accepting any more rent than the advertised rent. This rarely happens as most well advised owners price the asking rent at the market level. The intent of this change is obvious. However if you are an owner or an agent thinking about what rent to ask on a property, some may choose to ask a higher rent and gauge the response. You can always reduce the asking rent or accept a lower amount, but not a higher rent. While there is a chance the asking rent overshoots the market, if more people set a higher rent it may actually lift the market.
There is a tightening of minimum standards and safety checks to ensure they are completed before the property is advertised. Once again there is no real impact for a well maintained and well managed property.
The information renters are required to provide when making a rental application and how it is stored is changing. The specific details have not been released but the intent is to protect the privacy of renters information. Fortunately the fine art of renter selection is well entrenched at Wood Property to ensure the renter and the property are well suited to each other.
Behind the scenes we are seeing a more renter friendly approach by VCAT. This places a critical importance on the advice and processes of your property manager. VCAT has the authority to award outcomes based on circumstances by using a subjective provision of the legislation that decisions be “reasonable and proportionate”.
Here is the list of the main changes
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End of “no reason” notices to vacate
Owners can no longer end a lease at the end of the initial fixed term without a specific, valid reason. -
Extended notice periods
Notice periods for both rent increases and notices to vacate will increase from 60 days to 90 days. -
Stricter rent increase requirements
Rent increases must be supported by clear evidence such as market data, comparable properties or property improvements. -
Ban on rental bidding
Landlords and agents must not accept rental offers above the advertised price. The listed rent must be the amount offered and accepted. -
Ban on charging fees for rent payment methods
Tenants cannot be charged additional fees for choosing certain payment methods (e.g. credit card, BPAY). -
Mandatory minimum rental standards before advertising
Properties must comply with minimum rental standards before being listed for lease. This includes safety features, heating, insulation and structural condition. -
Stronger protection for tenant personal information
New rules restrict the type of information that can be requested from tenants and how it must be stored. -
Creation of a new rental dispute resolution body
A dedicated service will handle rental disputes to provide faster resolution outside of VCAT.
