Victoria's rental laws have changed. Here's what you need to know

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The sweeping changes have shifted power back towards rental tenants, but some warn it will come at a cost. (AAP: James Ross)

If you are among the one in four people in Victoria who rent a home, or if you own an investment property, changes to the more than 130 rental law changes taking effect on Monday 29th March, 2021 could have a big impact on your life.

The Victorian Government says the reforms, delayed because of the COVID-19 pandemic, will "make renting fair for all Victorians".

But others in the sector have warned it could drive rental prices up β€” a dire prospect for those out of work or people living in areas with property shortages.

Let's take a look at some of the changes.

Previously, some landlords and real estate agents were notoriously strict about modifications.

The pendulum has swung and now landlords must have a "reasonable reason" to prevent tenants from painting the premises, fixing a pet door, installing a dishwasher or setting up a herb garden.

In most cases you'll be able to repaint a room, but major renovations won't be allowed.(Unsplash: Umanoide)

According to Victoria's Consumer Affairs department, landlords can refuse changes if they break owners corporation rules or if the modifications can't be reversed. It means you can't take a sledgehammer to a wall you don't like.

Real Estate Institute of Victoria president Leah Calnan wants to reassure owners the change shouldn't result in "a free-for-all", enabling tenants to go to town and paint the walls bright pink.

"At the end of the tenancy, it does need to be returned to the neutral colour of cream or white or whatever it might have been," she says.

"The landlord can also set some criteria around how that painting would be conducted."

If there is a dispute, the matter can be escalated to the Victorian Civil and Administrative Tribunal (VCAT).

Other changes can be made without informing the landlord. As long as you aren't hammering into brick walls, the laws permit free installation of picture hooks and screws, child safety gates and security systems that are not hardwired to the premises.

I want a pet. Do I need to tell the owner?

Yes. But the advice from Tenants Victoria is to inform the owner that you'd like to bring in a new furbaby and to formally receive their permission.

"Don't just sneak in the cat without the permission of everyone. Go through the process," says Farah Farouque, Tenants Victoria's community engagement director.

Pets were a morale booster for many during the doldrums of lockdown.(ABC News: Sarah Mullins)

Both Tenants Victoria and the REIV believe that process is weighted in favour of the tenant. A landlord would need reasonable grounds to refuse an application for a pet.

Disputes go to VCAT.

Pet owners will need to abide by rules that apply in common areas of apartment complexes, and will need to ensure it isn't a nuisance to other tenants.

I'm looking to rent a house. What do I need to know?

Minimum standards will be set so that new tenants are guaranteed things like heating, a working kitchen and locked doors.(Nelson Alexander Real Estate)

If applying for a property, the advertised price must be the going rate. It is illegal for landlords or agents to invite rental bids or solicit higher offers.

A maximum one month's rent is to be used as a bond, unless the weekly rate for the property is above $900.

Minimum standards now apply for new rental agreements, and the landlord is responsible for ensuring they are met. There are 14 categories covering things like door locks, rubbish bins, mould, electrical safety, hot and cold water, heating, windows and lighting.

If these minimum standards aren't met, the tenant can terminate a rental agreement before they move in. If urgent repairs are needed and paid for by the renter, the owner must repay them within seven days.

The 'massive' change to eviction rules

Landlords will need to provide a valid reason if they choose to end a tenant's lease β€” "no specified reason" is no longer an acceptable answer. It's a change Tenants Victoria's chief solicitor Ben Cording describes as "massive".

Battles in VCAT can be long and drawn out.(Supplied)

Some of the accepted reasons include the landlord wanting to move back into the property themselves, plans to sell, change the building's use or to demolish it.

Property owners won't need to provide a reason if they ask tenants to leave at the end of their first fixed term. If it is any longer than that, the rules mentioned above apply.

For those who do receive an eviction notice and are unable to leave by the landlord's specified date, Ms Farouque's advice is not to panic.

"You can continue on in your home. The notice to vacate is the first part of the process," she says.

A new date can be renegotiated between the parties, and if that fails, it's off to VCAT.

How do I get my bond back quickly?

Upon leaving, a tenant can apply to the Rental Tenancies Bond Authority to receive the full amount, regardless of whether the landlord disagrees.

If there is a dispute, the property owner will need to show evidence that they have made a VCAT claim for compensation within 14 days, or the money will be paid to the tenant.

The idea is to stop long, drawn out arguments between ex-tenants and their former landlords.

"If you [an owner] who's really argy or there's an issue that can't be resolved, it starts a clock," Mr Cording says.

How will this affect rental prices?

More stock could come on the market if investors offload their homes.(ABC News: Jerry Rickard)

Ms Calnan believes the changes will result in rent prices going up, and expects there to be some short-term selling off by property owners.

She says many owners are short of money after renters defaulted or couldn't make full payments last year. Chasing missed rent payments has been a slow and difficult process in VCAT.

Why house prices will keep risingπŸ”—

Far from jumping in to stop an emerging housing bubble, policymakers are keen to let it run in the vain hope it may kick-start the economy, writes Ian Verrender


"The state government needs to be making sure that there are additional resources and funding available to VCAT, because otherwise this is just going to become a further disaster than what it already is," she said.

Ms Calnan believes the majority of owners who hold onto their properties will pass the additional costs on to renters.

"In a changing market that we have at the moment, we'll see substantial rent increases," she says.

"As our borders reopen as international students return, ultimately, what will happen is that there will be a higher level of prospective tenants looking for properties over and above the supply that's available, which in turn pushes rents up."

The prediction is grim in regional Victoria, where Ms Calnan believes up to $100 a week could be added on to some property prices.

This article was written by Kristian Silva of ABC News Australia πŸ”—

Saturday April 17th, 2021
Thursday March 25th, 2021
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