Changes to the Residential Tenancies Act 1997 (Vic). What do the changes mean for real estate agents, landlords and tenants?
By Angela Kordos
26 March 2021
The new Residential Tenancies Amendment Act 2018 (“RTAA”) amendments and the accompanying Residential Tenancies Regulations 2021 (“Regulations”) are to be introduced into the Residential Tenancies Act 1997 on 29 March 2021. These long-awaited amendments were previously delayed due to the COVID-19 pandemic.
The amendments come into effect 29 March 2021 and are intended to make renting residential property fairer and safer in the State of Victoria. The amendments extend the obligations of residential landlords (now to be called “rental providers”) and offer additional protections for residential tenants (now to be called “renters”).
The amendments apply to caravan parks and rooming houses, too, but for the purposes of this blog we shall focus on residential tenancies.
Important information for rental providers
Rental providers must ensure that the property complies with certain minimum standards before a renter moves in. If the property does not meet the minimum standards, the renter can terminate the rental agreement before they move in, or they can request an urgent repair.
Rental providers will be required to comply with safety related activities including electrical safety checks and gas checks, smoke alarms, requirements in respect of pools, and specific requirements if the premises are in a bushfire prone area, all of which are the rental provider’s responsibility and they cannot be passed onto the renter.
Certain terms are now prohibited from being included in a residential rental agreement. Prohibited terms include:
- a term which binds the renter to a contract that the renter did not agree to in writing, after having an opportunity to review the contract, before entering into the residential rental agreement;
- a term which requires the renter to indemnify the residential rental provider;
- a term which prevents the renter from making a claim for compensation because the rented premises is not available on the commencement date of the residential rental agreement;
- a term which requires the renter to pay rent in advance by a payment method which requires additional costs (other than bank fees or account fees payable on the renter’s bank account);
- a term which requires the renter to use the services of a third party service provider nominated by the residential rental provider other than an embedded network;
- a term which imposes fees for, or delegates, safety-related maintenance that is the responsibility of the residential rental provider;
- a term which makes the renter liable for the residential rental provider’s costs of filing an application at the Tribunal;
- a term which makes the renter liable by default for an insurance excess to be paid under an insurance policy of the rental provider;
- a term which imposes fixed fees for terminating a residential rental agreement early, unless the basis for calculating the fixed fees has been set out in the agreement.
My tenant isn’t paying their rent. What can I do?
There are new processes for repeated late payments of rent or non-payment of rent. When a renter pays back overdue rent within 14 days, any notice to vacate issued by the rental provider for that overdue rent will be invalid. This will apply for the first four times it happens in a 12-month period. However, if the renter fails to pay rent as required on a fifth occasion in the same 12-month period, the rental provider may give a notice to vacate and apply to VCAT for a possession order. VCAT may adjourn the possession application and place the renter on a payment plan to meet the outstanding arrears.
Rental providers will be required to comply with more detailed rules around rights of entry including extended notice period for some grounds, and restrictions for renters protected under personal safety and family violence legislation.
What about rent increases?
For rent increases that occur during a fixed-term rental agreement, the amount or calculation method for the increase must be set out in the agreement and this amount or calculation method must be used.
I want to evict my tenant. Can I give a ‘no specified reason’ notice to vacate?
Rental providers can no longer issue a ‘no specified reason’ notice to vacate. They must provide a valid reason such as sale, change of use or demolition of the rental property, or rental provider moving back into the rental property.
My tenant is threatening or intimidating me. What are my rights?
Rental providers will be able to give renters a 14-day notice to vacate if the renter, or any person occupying the rented property, has seriously threatened or intimidated the rental provider or their agent, or a contractor or employee of either the rental provider or their agent
What if I don’t comply with the legislative changes?
Rental providers found by VCAT to have committed an offence or breached a duty under the legislation will have their name, rental property address, and the nature of their offence or compensation or compliance order made will be listed on the register available from the Consumer Affairs Victoria website.
Important information for renters
Damage to property
Renters and their visitors must not intentionally or negligently cause damage to the property or common areas.
A renter must report damage or the breakdown of facilities as soon as practicable after becoming aware to the rental provider. This report will be considered by VCAT in claims for compensation by the renter. If the renter receives an end of fixed term notice to vacate in response to such a report, it is of no effect.
Can I keep a pet?
Renters still require written consent from their rental providers to keep a pet. However, if a rental provider has reasonable reasons to refuse permission, the rental provider can apply to VCAT for an order.
Can I make modifications to the rental property?
Renters will be able to make prescribed modifications without the rental provider’s consent, making rental properties safer for growing families. Such modifications include putting up picture hooks or screws for wall mounts, shelves or brackets, installation of wall anchoring devices on surfaces other than on exposed brick or concrete walls, installation of child safety gates, drawers and doors. There are other modifications which a rental provider will not be able to unreasonably refuse.
Renters will now be able to install security lights, alarm systems or cameras that can easily be removed and that are not hardwired to the property. Of course, these devices should be installed without impacting the privacy of their neighbours.
Some key things to note in relation to urgent repairs include the following:
- The legislative definition of “urgent repairs” has now been expanded;
- There is now an increased monetary limit for renters to authorise urgent repairs where the rental provider fails to promptly respond to an urgent repair request;
- The rental provider must reimburse the renter for the cost of urgent repairs or replacement within 7 days of written notice setting out the reasonable cost of same;
- The rental provider is liable for utility charges for non-compliant energy efficient replacement appliances;
- VCAT can order that rent be paid into a Rent Special Account for a specific period, where the rental provider receives notice that urgent repairs are required, fails to carry out those repairs, and has not demonstrated that they would experience financial hardship if the rent was paid into the Rent Special Account.
What about non-urgent repairs?
Renters can apply to VCAT directly for non-urgent repairs if the rental provider has not carried out notified repairs within 14 days. Renters can request a repairs report from Consumer Affairs Victoria, but such report is no longer required when applying to VCAT.
What if I receive a notice to repair?
Renters must reimburse rental providers for the reasonable cost of repairs within 14 days of receiving the repair notice. Renters experiencing hardship may apply by written notice to the rental provider, or failing that, to VCAT for an additional 14 days.
Further changes to note:
- restrictions regarding where and how rent is to be paid (including that rental providers must disclose any costs that may be incurred prior to entering into the rental agreement, and rental providers now being required to permit rent payments via Centrepay;
- rental providers must pay for all charges that renters are not liable for;
- if a renter receives an excessive utility bill attributable to a hidden fault, the rental provider must pay the costs that exceed the renter’s ordinary usage amounts;
- VCAT ability to order the agent to disclose the rental provider’s details for the purpose of legal proceedings;
- VCAT can formalise rental agreements;
- Unsigned rental agreements may be enforceable (on the basis of acceptance of rent or allowance of the renter’s part performance of the agreement);
- restrictions on advertising and offers;
- a ban on inviting rental bids;
- new restrictions regarding false, misleading and deceptive representations;
- restrictions on use of information provided in a rental application;
- restrictions regarding unlawful discrimination, and pre contractual disclosure requirements;
- on assignment, rental providers can only charge fees that are reasonably incurred by them by virtue of the assignment;
- Other laws to come later include heating regulations which will come into effect in stages. Bedroom and living area windows must have coverings that can block light and provide privacy from 29 March 2022. By 29 March 2023, rental properties will need to have electrical safety switches.
If you have any questions on the upcoming changes to the Residential Tenancies Act 1997, please do not hesitate to contact a member of our team.