The release of the Victorian government’s Residential Tenancies Regulations 2021 has been met with concern by the Real Estate Institute of Victoria (REIV).
The REIV said landlords must brace for significant change — and are facing “substantial” increases to costs and time spent managing their assets.
It has flagged that the 120-plus obligations that come into effect from 29 March 2021 will commence one day after the state’s rental moratorium ends.
Among the minimum standards being introduced are a number of provisions that should be available to all tenants: “hot and cold water in the bathroom and laundry, functioning ovens, stovetops and sinks in the kitchen, and a permanent — and working — heater in the living room”.
Further, the reformed regulations set out simple modifications that tenants can make to their rental property.
Under the new rules, tenants won’t have to ask permission to attach child safety devices, install picture hooks on walls, replace curtains or use new LED globes to increase energy efficiency.
According to the state body, the changes will require extensive education and engagement in just two months to help ensure the real estate sector is equipped to implement the regulations effectively.
Weighing in on the issue, REIV CEO Gil King said the new standards would trigger an “unbalanced regulatory burden” on the state’s rental market.
He said increased costs to property ownership, as well as adding to the complexity of property maintenance and management, is “a deterrent for investment”.
“New costs introduced through these changes are likely to result in higher rents and could see mum and dad investors exit this asset class, putting further pressure on rental availability and affordability for Victorians,” he considered.
Mr King flagged that the REIV has previously made such issues and concerns known to property policymakers, and so expressed his surprise “to see more of a pendulum swing away from investment property owners — now referred to as rental providers”.
“That said, the changes are now a reality that the sector needs to face and the REIV stands ready to help property owners, managers and stakeholders adjust accordingly,” he said.
The REIV said that with substantial changes to processes, documents and systems now required, a “fresh” round of education is needed for the sector, and will lead a number of information sessions and courses, as well as provide tools and resources online.
Giving a nod to the way property managers and the wider real estate industry had coped with the pandemic in 2020, Mr King said that, for decades, real estate in Victoria has managed to play well with the cards it has been dealt.
“For this reason, we should have confidence that the competent people in the industry will manage through these changes and continue to contribute to a thriving sector,” the CEO concluded.