This article is from the Australian Property Journal archive
VICTORIA’S Allan government has unveiled a raft of changes that will give more power to renters in the state, including the threat of fines for landlords who make dubious claims on a tenant’s bond, and a ban on no-fault evictions.
The list of six changes announced by Minister for Consumer Affairs Gabrielle Williams also includes banning extra fees charged when paying rent, banning charging for background check fees for rent applications, capping the cost of breaking a lease, and making it easier for tenants to get an extra key or fob for their apartment.
The announcement follows a string of announcements by the government aimed at defining itself on housing policy – including unlocking supply around train stations and tram routes, greenfield land releases, and new stamp duty concessions – but that had so far left out renters.
Melbourne’s rental market is witnessing a crushingly low vacancy of 1.67%, according to the latest PropTrack data
“Renters’ rights are all about respect – that’s the principle that we are trying to bring to the rental market through more than 130 reforms, and that’s why we are leading the nation on it,” Williams said.
“By banning fees and charges on rental payments and applications, and cracking down on unfair bond claims, we’re putting more money back in the pockets of renters.”
NSW passed its own suite of reforms in the past week.
Victoria’s reforms will be introduced to the state Parliament in stages over the next 12 months, with some – including the ban on no reason notices – before the end of the year.
Tenants Victoria CEO Jennifer Beveridge said the organisation welcomed the measures to better protect the rights of renters, who make up almost 30% of Victorians.
“After all, housing is an essential service and a human right,” she said.
“Extending the ban on no-reason evictions gives renters more security. It puts them on a more even footing to request repairs, for example, in the knowledge that rental providers cannot ask them to leave without a reason under the law.”
The government said all remaining “no reason” notices to vacate in the Residential Tenancies Act 1997 will be removed.
“It means ‘no fault’ evictions for fixed-term agreements won’t be permitted, full stop.
You can still be evicted for the usual reasons such as damage, not paying rent or if the owner is moving back in. But with this change, you can’t be kicked out without a valid reason – and certainly not just because someone wants to put the home straight back on the market to bump up the rent.”
The government said it would aim to stop the “culture of dubious bond claims” by mandating requirements for evidence, and imposing financial penalties for any wrongdoers.
“So many renters have a story about their bond being withheld for no good reason. Sometimes they’ve been told there’s damage to a wall or floor, but there’s no photos provided and no receipts for repair attached,” the government said.
“If the damage isn’t real, then that’s shameful. But even if the damage is real, you still deserve to know it’s been properly recorded and costed by someone who knows what they are talking about.”
The government is also taking aim at hidden fees and charges more on increasingly widespread third-party rent tech apps, as well as extra fees as part of the rental application process “just because the agent or provider wants to check your rental ‘blacklist’ history”, te government said.
“If an agent wants to check a residential tenancy database (which a tenant can do themselves for free once a year) they can do so, but at their own cost.”
For fixed term rental agreements of five years or less, Government will legislate a cap for breaking a lease; “for example, targeting one week’s rent based on the proportion of remaining months of the agreement, up to a maximum four weeks in total”.
“If that’s in place and applies to you, then you won’t pay more than four weeks for breaking your lease.”
The government will also change the law so when renters request an additional electronic key or security fob for themselves or someone who lives with them, the agent should provide it, and can’t unreasonably deny it.
The reforms follow the previously announced Rental Dispute Resolution Victoria, which will open in June next year, the creation of a portable bonds scheme, and establishing a renting taskforce to crack down on dodgy landlords and agents.
The Real Estate Institute of Victoria (REIV) said the proposed changes to rental legislation will “create further pressure on an already endangered rental ecosystem”.
“Of the six measures announced today, and more expected, none seek to support rental providers, who are crucial to the rental ecosystem and are already facing operating headwinds as a result of rising costs and increasing regulation,” REIV said.
“While the government’s recent action to boost housing supply is welcomed, it fails to attract rental providers who are exiting the market at an unprecedented rate. At a time when Victoria needs greater rental supply, these announcements again target a market that has seen constant regulatory change,” said REIV CEO Kelly Ryan.
“We urgently need the introduction of incentives that keep rental providers in the market and supplying homes, rather than more change. What we don’t need is more regulation that makes it harder to build investor confidence.”
