On March 29, 2021 some of the biggest changes in decades in how rental properties are managed in Victoria come into effect.
All of the rental forms inside the Forms Live system are being updated and will be ready for the March 29 deadline with draft forms and templates automatically updated.
Our legal counsel, Colin Biggers & Paisley – one of Victoria’s most respected property lawyers – have provided a detailed guide to the changes and how they will affect landlords – now known as rental providers, tenants – now known as renters and property managers.
Changes to terminology
The Amendment Act changes the terminology used for residential tenancies. ‘Landlords’ will become ‘rental providers’, ‘tenants’ will become ‘renters’ and ‘tenancy agreements’ will become ‘rental agreements’.
The prescribed forms for standard rental agreements and for long-term rental agreements have been updated and modernised.
Renters and rental providers can enter into a fixed-term rental agreement for longer than 5 years.
A rental agreement must not include a prohibited term, including a term that:
- requires a renter to take out any form of insurance;
- exempts a rental provider or its agent from liability or requires the renter to indemnify the rental provider;
- requires the payment of rent by a method involving additional cost;
- imposes liability for safety-related maintenance which is a rental provider’s responsibility;
- provides for the renter to pay increased rent, the remaining rent, a penalty or liquidated
- damages if they breach the agreement;
- requires the premises to be professionally cleaned at the end of the tenancy
- or for the renter to pay for professional cleaning of the premises, unless the term provides that it is required to restore the premises to the condition they were in immediately before the start of the tenancy taking account of fair wear and tear;
- provides for the rent to be reduced or a rebate to be paid of the renter does not breach the agreement.
Unsigned rental agreements enforceable
If a renter has signed a tenancy agreement but the rental provider has not, the agreement is still enforceable if the rental provider (or its agent) accepts the rent without reservation or otherwise acts in part performance of the agreement.
VCAT can formalise rental agreements
A renter may apply to VCAT for an order requiring the rental provider to enter a written rental agreement with the renter, where a rental agreement has ended but the renter has continued in occupation or a rental agreement already exists but it is not in writing or is only partially in writing.
Rental agreement application forms
Rental agreement application forms must contain a statement that includes the prescribed Information (see Form 3 in Schedule 1 of the Residential Tenancies Regulations 2021).
Rental providers must not unlawfully discriminate
Rental providers must not unlawfully discriminate (or instruct their agent to unlawfully discriminate) against renters by refusing to rent premises to an applicant, issuing a notice to vacate to a renter or determining consent because of a protected attribute under the Equal Opportunity Act 2010.
Use of information in a rental application
A rental provider or their agent must only use personal information disclosed in a rental application to assess the applicant’s suitability as a renter or to comply with the RT Act
Inappropriate rental application questions
A rental provider or their agent cannot request that a renter disclose:
- whether they have been a party to an action or had a dispute with a rental provider;
- their rental bond history;
- a bank or credit card statement containing daily transactions;
- any information related to a protected attribute under the Equal Opportunity Act 2010.
Pre-rental agreement disclosure
Before entering into a rental agreement, the rental provider must disclose certain information to the renter, including:
- whether the premises are on the market for sale or are being repossessed;
- if they are not the owner of the premises;
- information about any embedded energy network;
- If there has been a homicide in the premises in the last 5 years;
- if the premises is affected by a building or planning application;
- if the premises are subject to a building notice;
- a copy of any notice, order or recommendation issued relating to the premises
- regarding safety or defects; And
- if the premises contains asbestos.
False, misleading and deceptive representations
A rental provider and their agent must not induce someone to enter into a rental agreement by making false or misleading representations, or through misleading or deceptive conduct, including concerning the rent payable, the premises and the existence of facilities associated with
Fixed price advertisements and offers, and ban on inviting rental bids
Rental providers and estate agents must only advertise or offer premises at a fixed price. They must not invite rental bids or solicit offers of rent higher than the advertised price.
Maximum bond amount and rent in advance threshold
The rent threshold for that needs to be met before a rental provider can request a bond, or rent in advance, of more than one month’s rent has increased to $900 per week.
Additional bond amounts
Rental providers can request an additional bond in long-term rental agreements of more than five years if the renter has lived at the rental property continuously for at least five years or the bond is payable in respect of an obligation to restore a renter modification to the premises, and the rental provider has given at least 120 days’ notice.
Condition reports may be given electronically, must be in the prescribed form and the renter must now return a signed copy to the rental provider within 5 business days of entering into occupation of the premises. If the rental provider fails to provide a condition report before the renter enters into occupation of the premises, a renter may now complete a condition report within 5 business days of entering into occupation and provide it to the rental provider or their agent.
A rental provider or renter may apply to VCAT to amend inaccurate or incomplete condition report. Within 10 days of the end of a rental agreement, the rental provider or their agent must complete the condition report in the presence of the renter or in the absence of the renter if they have been given reasonable opportunity to be present when the report is completed
Where and how rent is to be paid
Any method for paying rent can be specified under a rental agreement (other than payment by post-dated cheque), but the rental provider must ensure that a method that incurs no additional cost is reasonably available. Rental providers must also permit rent payments via Centrepay and EFT.
Rental providers must also disclose any costs that may be incurred by the nominated method prior to the renter entering the agreement.
Rent increases may occur during a fixed term rental agreement provided that the amount or calculation method for the increase must be set out in the rental agreement and this amount or calculation method must be used.
A notice of rent increase must now include the amount and the method by which the rent increase was calculated.
Rental providers must now pay for all charges that renters are not liable for, including water charges in respect of premises that are not separately metered. If a renter has been charged for excessive use of a service caused by an infrastructure, building or fixture fault, the rental provider must pay for the costs that exceed the renter’s ordinary usage.
If a utility supplier has issued an account to the rental provider, the rental provider must deduct any concession or rebate that the renter is entitled to from the amount the rental provider is seeking to recover.
Keys and security devices
Rental providers must provide each renter with a free set of keys or security device. Rental providers may charge a reasonable fee for providing additional or replacement keys or devices to renters.
Renter cleanliness and damage obligations
Renters and their visitors must not intentionally or negligently cause damage to the property or common areas. If damage occurs, the renter must inform the rental provider as soon as practicable after it occurs. Renters must leave the property reasonably clean and in the same condition as at the start of the rental agreement, taking into account fair wear and tear.
Renters and rooming house residents must not remove, deactivate or interfere with the operation of a prescribed safety device (e.g. smoke alarm), unless it is reasonable to do so. A renter and rental provider must undertake safety-related activities set out in the rental agreement if the agreement contains a prescribed term (i.e. one relating to smoke alarms, pool barriers etc.).
Rental providers must comply with prescribed requirements for keeping and producing records of gas and electrical safety checks conducted at the premises.
Modifications to premises
Renters can make modifications to the premises without the rental provider’s consent relating to installing:
- picture hooks, screws or brackets other than on exposed brick or concrete walls;
- LED light globes which do not require a new fitting;
- a water efficient showerhead if the original showerhead is retained;
- security systems which do not impact on neighbour privacy, can be easily removed, are not hardwired;
- child safety gates other than on exposed brick or concrete walls;
- a wireless doorbell;
- curtains if originals are retained;
- letterbox lock; and
- adhesive child safety locks on drawers and doors.
A rental provider cannot unreasonably refuse consent to renters making modifications to the premises that:
- do not penetrate or permanently modify the surface, fixtures or structure of the premises;
- are required for health and safety purposes;
- are reasonable alterations within the Equal Opportunity Act 2010;
- Are reasonable security measures;
- Or are necessary to increase the thermal comfort of the premises or reduce energy and water use or cost for the premises.
Premises must meet minimum standards
Rental providers must ensure that the premises complies with the minimum standards (as set out in schedule 4 of the Residential Tenancies Regulations 2021) on or before the day that the renter enters into occupation of the premises.
Digital renting guide given electronically
If the renter and rental provider have agreed to give and receive documents electronically, the rental provider may give the renter the “Renting a home: a guide for tenants summary of renter rights” in electronic form.
Rental provider’s maintenance and repair obligations
Rental providers must ensure the premises are provided and maintained in good repair and in a reasonably fit and suitable condition for occupation. This applies regardless of whether the renter was aware of any disrepair before entering into occupation of the premises, the amount of rent payable under the rental agreement or the property’s age and character.
Rental providers must ensure that external doors are secured with a working deadlock and that there are locks on all windows that are capable of having a lock. Deadlocks are not required for screen doors attached to an external door with a deadlock or where the premises’ external door cannot be accessed because of another security barrier.
Renters may keep pets at premises with the written consent of the rental provider.
Renters must request consent using the prescribed form and a rental provider must not unreasonably refuse consent. A rental provider is taken to have consented unless they apply to VCAT for an order that it is reasonable to refuse consent within 14 days of the request for consent.
A renter may issue an urgent repair request to a rental provider if the premises do not meet the minimum standards (see above), which include air conditioning, safety devices and any fault or damage which makes the property unsafe or insecure, including pest infestations, or mould or damp caused by or related to the building structure.
The money limit for renters to authorise urgent repairs when their rental provider has not promptly responded to an urgent repair request has been increased to $2,500. The rental provider must reimburse the renter for the cost of urgent repairs within 7 days of the renter giving written notice of the reasonable cost of the repairs.
The Director of Consumer Affairs will issue guidelines clarifying timeframes for responding to urgent repairs. VCAT must consider the Director’s guidelines when determining an urgent repairs dispute.
Renters may apply to VCAT to carry out specified non-urgent repairs if the renter has given a repair notice and the rental provider has not carried out notified repairs within 14 days of the notice. Renters may still request a repairs report from Consumer Affairs Victoria but a repairs report is no longer required to apply to VCAT.
Rental provider may join owners corporation to breach of maintenance duty application
Where an application is made to VCAT for a breach of duty and the alleged disrepair involves damage or defects to common property that adjoins the premises, the rental provider may join the owners corporation responsible for the common property as a party to the application.
Timeframe for reimbursement of repairs by renter when a repair notice has been issued
Renters must reimburse rental providers for the reasonable cost of repairs relating to a repair notice issued by a rental provider within 14 days of the completion of the repairs and notice of the cost of the repairs. Renters may apply to VCAT or the rental provider for an extension of 14 days to the deadline to pay the reimbursement if they are experiencing hardship.
Assignment rental agreement
A rental provider may require a renter to pay any reasonable expenses that are reasonably incurred by the rental provider because of the assignment of a rental agreement (although they still cannot charge a fee).
Changes to rights of entry of rental provider
Notice of entry is now required to be given:
- at least 48 hours prior to entry to show premises to prospective renters, lenders or buyers, or conduct an open inspection;
- at least seven days prior to entry to produce advertising photos or videos, for valuation
- purposes or for general inspection if entry has not been made within the last 6 months for that purpose;
- at least 24 hours prior to entry to carry out a duty under the RT Act or the rental agreement or if the rental provider believes that the renter is in breach of the RT Act or the rental agreement.
The rental provider only has a right of entry to show the premises to prospective renters or to conduct an open inspection within 21 days before the end of the rental agreement as set out in the notice to vacate or notice of intention to vacate. The rental provider or their agent may (unless otherwise agreed with the renter) show the property to prospective renters no more than twice a week, and for no longer than one hour.
The rental provider only has a right of entry to show the premises to prospective buyers or to conduct an open inspection not less than 14 days after providing a notice of intention to sell in the prescribed form.
The rental provider or their agent must make reasonable efforts to agree days and times for the inspections and (unless otherwise agreed with the renter) show the property to prospective renters no more than twice a week, and for no longer than one hour.
A renter may apply to VCAT for an order limiting when entry to the premises may occur.
Lease break compensation
Rental providers may apply to VCAT for compensation if a renter terminates a fixed-term rental agreement before the end date.
When making a compensation order in the case of a lease break, VCAT must consider the advertising or reletting fees on a proportionate basis, loss of rent taking account of prompt mitigation, the severe hardship the renter may have suffered due to an unforeseen change in circumstances if the agreement had continued, and whether the rental provider served the notice to vacate (other than for repudiation of the agreement by the renter).
Rental providers no longer have a right to issue a notice to vacate without grounds.
Rental providers can now only issue a notice to vacate at the end of the fixed-term of a rental agreement if it is the end of the initial term of the rental agreement. This does not apply to long-term rental agreements of more than five years.
The termination date may be the last day of the term or any date after the last day of the term (provided the requisite notice period is satisfied).
Rental providers may now give a renter a 14-day notice to vacate if the renter, or any person occupying the premises, has seriously threatened or intimidated the rental provider or their agent, or a contractor or employee of the rental provider or their agent.
Rental providers may give a renter a notice to vacate if the renter or their visitor endangers the safety of occupiers of neighbouring premises, the rental provider or their agent, or a contractor or employee of the rental provider or their agent.
Rental providers may give a renter a notice to vacate if the renter or their visitor recklessly or intentionally cause serious damage to the premises, including any safety equipment or common areas.
Renters can give 14 days’ notice of intention to vacate without paying lease break fees where they require special or personal care, have been given notice of an intention to sell, need temporary crisis accommodation or have been accepted into social housing.
A mortgagee under a mortgage entered into before the rental agreement who is entitled to possession or to exercise their power of sale in respect of the premises may give a renter at least 60 days’ notice to vacate.
A mortgagee cannot give this notice if they consented to the rental provider entering into the rental agreement regardless of when it was entered into.
Late payment of rent
A new procedure applies in relation to the late payment of rent.
On the first four occasions of non-payment of rent in a 12-month period, the rental provider may give the renter a notice to vacate. If the rent is paid within 14 days the notice to vacate is of no effect. If the rent remains unpaid then the rental provider may apply to VCAT for a possession order. VCAT may place the renter onto a payment plan or make a possession order.
On the fifth occasion of non-payment of rent in a 12-month period, the rental provider may give the renter a notice to vacate, which remains effective regardless of whether the rent is subsequently paid. The rental provider may apply to VCAT for a possession order after expiry of the notice to vacate. VCAT may place the renter onto a payment plan or make a possession order.
VCAT must now consider whether it is reasonable and proportionate to make a possession order taking into account the interests of the rental provider, the renter, co-tenants and neighbours, including considering:
- the nature, frequency and duration of the conduct;
- whether the breach was trivial or caused by another person;
- whether the breach has been remedied;
- other orders available to VCAT;
- the behaviour of the rental provider; and
- any other matter VCAT considers relevant.
Goods left behind
Rental providers must take reasonable steps to give notice in the prescribed form to the former renter that the goods have been left behind and store them for a period of at least 14 days after giving the notice.
Rental providers may charge an occupation fee if they are sufficient to prevent the rental provider from renting the premises, which must not exceed the amount of rent that would have been payable under the rental agreement for a period not exceeding 14 days.
A rental provider may dispose or sell the goods after the 14 day period.
The former renter may request the proceeds of sale within 6 months of the sale less any occupation fee and the reasonable costs of the sale.
Repayment of bonds
Renters may now apply to the RTBA for the return of their rental bond. Rental providers may
only apply to the RTBA for the return of the rental bond to the renter. A rental provider may apply to VCAT for a bond repayment order or to object to an application by a renter for the return of their bond.
Amendments to residential tenancy databases
VCAT may order, on application by a renter, to have a listing in a residential tenancy database amended or removed if it is satisfied that the listing is or would be unjust having regard to the information listed, the conduct of the renter and whether the listing would have a disproportionate impact on the renter’s ability to access future rental accommodation.
Rental non-compliance register
The Director of Consumer Affairs must establish and maintain a register of rental providers who have been ordered by VCAT to remedy a breach, pay compensation or refrain from committing a breach, or who have committed an offence under the RT Act.
The Director may publish the register in any form he or she sees fit. The Director must not keep information on the register about a rental provider for longer than 3 years.
The amendments to the RT Act which relate to lease forms, invalid or prohibited terms, condition reports, maximum bond and rental threshold increases do not apply to rental agreements entered into before the changes take effect.
It pays to know the changes in the law in order to be fully guided to your property transactions check out our online forms for your easy compliance of the changes embodied to the Victorian Residential Tenancies Act 1997.