Residential Tenancies Act changes are coming – are you ready?

A change is coming to the way we rent, with changes to the Residential Tenancies Act passing through parliament and trickling their way into effect since September 2018. However, while some changes have already been implemented, the full suite of reforms will be in place from 1 July 2020 – so the bulk of the changes are still to come.

Some of the changes will be small – for example, there’s a very simple language shift coming that changes the terminology we use when we talk about renting. With this change tenants will be known now as “renters” and landlords are now “rental providers”.

Other changes are more aggressive, but instead of boring you with details on all 132 reforms to the Act, here are the top four key changes I believe will have the greatest impact.

1. Pets

Probably one of the most spoken about changes, the rules around keeping pets in a property are made clearer, and renters will now be given more leniency to keep pets in a property. Under the new reforms, a renter will be required to write to the rental provider/property manager advising that they would like to keep a pet at the premises. If the rental provider does not want to accept the pet into their property, an application to VCAT would need to be made and evidence provided to the tribunal as to why it is reasonable to refuse the renter’s permission to do so.

2. Repeated late rent or non-payments

Currently, when a renter is more than 14 days behind on their rental repayments, a notice to vacate may be issued and a landlord can apply to VCAT to gain possession of the property, regardless of whether a tenant “makes good” on their arrears within the 14 days. Under the new rules, the 14 days notice to vacate will be invalidated if pays their rent within the 14 days, 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 renter on a payment plan to meet the outstanding arrears.

3. No specified reason notice to vacate

Currently, a rental provider can issue a 120 day no reason notice to vacate if a renter is on a periodic tenancy or if the 120 days falls on or after the day the fixed term lease agreement is set to expire. As of 1 July 2020, this type of notice will be abolished.

Rental providers (landlords) cannot issue a ‘no specified reason’ notice to vacate. To end a rental agreement, rental providers must provide a valid reason such as sale, change of use or demolition of the rental property, or if the rental provider is moving back into the rental property.

4. Renters making modifications to properties

Renters will be able to make prescribed modifications to a property, without the rental provider’s consent. There is also a list of other modifications which a rental provider cannot unreasonably refuse consent to renters making. What qualifies as a prescribed modification will be decided by April 2020 following public consultation in November 2019 through Engage Victoria.

What these changes will mean for landlords/rental providers

From my perspective working as a property manager now for almost 10 years, I believe the most important conversation we should be having around these new laws is making sure that you as a rental provider are safe guarding yourself the best way you can. The answer to that is landlord insurance. Please, please, please make sure you have a landlord insurance policy in place.

If you are unsure about your current policy or if don’t have one in place, please contact your property manager at The Hopkins Group to start having the conversation.

Please note – The Hopkins Group does not sell or provide landlord insurance policies, however we can share case studies of those who have benefited from having these policies in place and discuss options available base on our experience.

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Disclaimer: The information contained herein is general in nature and does not take into account individual situations, needs or goals. It should not be relied upon and persons should satisfy themselves through independent means that any decisions based on this material are appropriate. We recommend that you consult with your adviser who will be able to make a recommendation based on your specific circumstances.

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