Login
iscover
In the past six years, more than 130 rental reforms have passed through the state of Victoria so it’s no wonder that for investors it can seem like the goal posts are always changing when it comes to maintaining and managing their investment properties – with more safety and compliance reforms on their way, writes Stephen Ericksen, regional manager for Victoria at Little Real Estate.
The next wave of reforms will come into effect by November and are designed to make renting fairer and more stable for tenants. While there’s no doubt these reforms are necessary for safety and compliance, it’s clear that more needs to be done to help alleviate the financial burden they put on landlords.
It’s estimated more than 24,000 rental homes have been lost from investors fleeing Victoria because of the extra regulations they’ll be facing. The Victorian state government should be looking to reduce land tax for investors who achieve property compliance within a reasonable time period and insurers should consider lowering premiums for compliant investors, given the significant reduction in their risk and potential claim payouts. We need to be both encouraging landlords to be compliant with the new regulations and also attracting investors back into the state.
So what do landlords need to be across with more changes on the way later this year?
New minimum standards
An important change is that what constitutes minimal rental standards. From November, properties must meet certain standards before being advertised, not just when a renter moves in. This covers safety, heating, air-conditioning and insulation, which are in addition to the minimum standards added in 2021. From 1 December, all window cords will need safety anchors, and from 30 October, ceiling insulation and draught sealing are becoming standard, especially for new leases or when old systems require replacement or repair.
Landlords should be on the front foot when it comes making these modifications to their investment properties and ensure their property manager has kept them in the loop with what their responsibilities are.
Reason for eviction
A big change coming on 25 November is the end of “no reason evictions”. This means rental providers can’t end a fixed-term lease without a valid reason. For landlords, it means closer scrutiny on the evidence required for a notice to vacate, however they still retain their rights to seek possession and move in themselves, sell the property with vacant possession or complete large-scale renovations.
Rental notice
Notice periods will be longer for both rent increases and notices to vacate. Rental providers will now need to give 90 days’ notice instead of 60 to allow renters more time to budget for an increase or find a new home. There will also be a closer crackdown on landlords or agents who continue to hold rental bidding wars with stricter penalties applying.
Streamlined paperwork
A new standard rental application form will be introduced to keep things simple and provide added privacy protection. Landlords and agents will have stricter rules on what information they can ask for and store. If an application is unsuccessful, the data needs to be deleted within 30 days (or six months with renter permission).
Dispute resolution
A new dispute resolution body called “Rental Dispute Resolution Victoria” (RDRV), is being established. It’ll be an easier way to resolve common rental issues without always going to the Victorian Civil and Administrative Tribunal. The hope is that it will reduce time delays for hearings that have not been properly addressed since COVID-19, some of which stretch for 12-plus months.
These reforms are a big shift for rental providers and renters in Victoria.
For investors, it means being proactive with compliance, maintenance, and managing your properties. It will unfortunately increase costs that will force some owners to sell and/or increase the rents. For renters, it may provide more security, fairness, and better living conditions.
There’s a fine line balancing all these things, and with investors already moving out of Victoria, it’s clear we haven’t seen the full impact of these changes yet. Let’s hope the state government can quickly move to implement some more safeguards for landlords to renew investor confidence and rental supply at the same time.
Stephen Ericksen is the regional manager for Victoria at Little Real Estate.
You are not authorised to post comments.
Comments will undergo moderation before they get published.