Recently the Victorian Government announced an initial set of reforms that will take into account the changing nature of the rental market itself, and the needs and expectations of tenants and landlords.
In the past, private rental was considered a relatively short-term transitional arrangement which eventuated in tenants moving to home ownership or in a move to social housing. We know that this scenario is no longer the case. With house prices in Victoria continuing to rise, growing numbers are in rental housing with more than one in four Victorians now renting rather than owning homes. Nationally, around one-third of private tenants are considered to be “long-term” having rented continuously for over 10 years. These long-term tenants are either older people on fixed incomes or families with children who desire stability.
We have seen the reasons why people become and remain landlords have also changed significantly with rental property becoming an important investment and a prominent feature of people’s retirement plans.
What are the new reforms?
Some of the new key reforms include:
- Removing the 120-day “no specified reason” notice to vacate; landlords will need to provide a reason as to why they are terminating a tenancy;
- A crackdown on rental bidding, which forces prospective tenants to outbid each other on rental properties; agents will have to advertise properties using a single price and will not be able to solicit rental bids from prospective tenants;
- Allowing tenants to keep pets more easily on the provision the tenant obtains a landlord’s written consent;
- Bonds will be capped at one month’s rent;
- Bonds will be released within 14 days if no dispute is raised;
- Faster tenant reimbursement for urgent repairs; when a tenant is out of pocket for undertaking urgent repairs, landlords will have to reimburse them within seven days, instead of the current period of 14 days;
- And tenants can make minor modifications to the property; a landlord will not be able to unreasonably refuse consent if a tenant asks to make minor modifications.
There have been mixed reviews in response to the suite of reforms. Whilst some bodies have welcomed the latest reforms as it reflects the changing environment of the rental market with increased demand for rental properties and longer-term leases in the Victorian market, others have been highly critical saying it would significantly imbalance the market in favour of tenants. The new laws will be introduced in 2018.
For more information on the new tenancy laws, contact DE on 13 20 33.
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