New tenancy laws for Victoria

28 Aug New tenancy laws for Victoria

At the beginning of August, a bill was put to the Victorian parliament that has the capacity to bring significant change to residential tenancies in that state. Some of the proposals are very positive and mirror initiatives adopted by other states, however, there are some changes that may have quite a negative impact on landlords.

The positives

Granted, some of these may incur costs for landlords, but essentially they bring Victoria into line with many other states. The measures will also help to stamp out some practices that are a bit unfair for tenants.

Protection for tenants who experience domestic violence

A tenant in this situation will be able to apply to VCAT to have the perpetrator removed from the lease and if necessary, the locks changed. They may also request a termination of the lease without penalty, including being listed on a tenancy database. VCAT would be required to hear the claim within 3 business days.

Rent increases and rent advertising

Upping the rent will be limited to once in a 12 month period. Properties must be advertised with a fixed rent, things such as rent ranges and rent bidding will not be allowed.

Universal minimum standards

Properties offered for rent must meet, and be maintained to a statutory minimum standard. Landlords who look after their investment will not have a problem with these.

The negatives

Saying no to pets

This will become harder as the landlord will have to ‘justify’ why the tenant is not permitted to have a pet, and a reasonable request for a pet cannot be refused.
Surely if a landlord finds they are forced to allow pets to reside in their property, then it is only fair that ‘pet bonds’ be allowed.

Changes to the property

Tenants will be permitted to undertake ‘minor modifications’ to the property without the owner’s consent. Such modifications are yet to be clarified.

This is a very worrying step. It will rely on the legislation/regulations containing definitive, prescriptive information as to what is a ‘minor modification’.  Based on the number of current grey areas in residential tenancy law, the likelihood of this clarity is slim.  Even if law achieves this, allowing property modifications without the prior approval, represents a concerning erosion of the owner’s rights.

A lease is an agreement to exchange money for the right of the tenant to reside in a property – not for the right of the tenant to change the property.

Removal of ‘without grounds’ lease terminations

Victoria is not alone here – there are several states looking to revoke the ‘without grounds’provision. Honest Broker believes this is a significant backward step for landlords and has written about the topic before. Surely, as the owner of the property, the landlord is entitled to retain the absolute discretion over who resides in it; obviously allowing for laws preventing discrimination.

There are always improvements that can be made to residential tenancy laws, and several of these measures will achieve that. However, it ought to be remembered that in providing accommodation, the private rental market alleviates a significant burden from governments. Investment in the rental property sector needs to be encouraged rather than be hamstrung by laws that will have some landlords questioning the value of owning a rental property.

It should also be remembered that we do operate in a market economy and whilst some regulation will always be necessary, market forces are generally the most efficient means of balancing the needs of a seller and buyer – or in the case of residential tenancies, a landlord and a tenant.

Try these related posts:

Without grounds terminations

Lessons from commercial tenancies