The Andrews Labor government recently released an unprecedented barrage of tenancy reforms, all aimed at safeguarding the rights of tenants.
With house prices in Victoria continuing to rise, more than one in four Victorians now rent rather than own homes. According to Marlene Kairouz, Minister for Consumer Affairs, this growing population of tenants deserve to have their rights protected.
“More people are renting than ever before and for longer – that’s why tenants need a better deal,” she said. “These changes will crack down on rental bidding, make it easier and faster for renters to get their bond back, and will better hold landlords and agents to account for their actions.”
Long-term security for tenants
The government promised to abolish “no specified reason” notices to vacate, and new restrictions will be placed on ending leases without reason at the end of the contract, particularly if the lease has lasted more than one fixed term.
There will also be a crackdown on rental bidding, which forces prospective tenants to outbid each other on rental properties. Meanwhile, rent increases will be limited to once a year to give renters greater financial stability.
To end discrimination against renters with pets, the government will give every tenant the right to own a pet. While landlords will still be expected to provide consent, they will only be able to refuse pets on their properties in certain circumstances.
In a major cost of living reform, bonds will be capped at one month’s rent when the rent is twice the current median weekly rent (currently equivalent to $760 per week or less). This reform will also apply to rent paid in advance.
Bonds will be released more quickly at the end of a tenancy. Under the reform, tenants will be able to apply for the release of the bond without written consent from their landlords, who will have two weeks to raise a dispute before the bond is repaid automatically.
There will also be a crackdown on dodgy landlords with the introduction of a landlord and estate agent blacklist. False, misleading, and deceptive claims by landlords will also be banned.
Mixed reaction from various parties
The government’s announcement drew mixed reactions from various parties.
The Victorian Council of Social Service said the suite of reforms was very important given the increasing number of lifelong renters, and RSPCA Victoria said making it easier for tenants to keep pets could reduce the number of animals being surrendered to shelters.
Enzo Raimondo, CEO of view.com.au, welcomed the latest reforms. “Historically there has been an imbalance between the rights of tenants and landlords. With more demand for rentals and longer-term leases in the Victorian market, the legislation should move with the changing environment,” he said.
In contrast, the Real Estate Institute of Victoria (REIV) was highly critical of the reforms, saying it would significantly imbalance the market in favour of tenants.
“All landlords should reconsider whether they want to remain in the private rental market given their rights are being eroded,” Gil King, CEO OF REIV, said in a statement.
Raimondo does not agree with this view, and believes the slew of reforms will not undermine the rights of landlords.
“However there will need to be more flexibility on [the part of landlords] with regards to the selection process of tenants, the opportunity for minor modifications rations, and more specifically, around the reasons to end leases,” he said. “Essentially what these reforms will do is make landlords more accountable for their relationship with tenants and ensure communication is honest and clear.”
While Raimondo is supportive of many of the reforms, he questions the introduction of a landlord and estate agent blacklist. “It should be revisited. I don’t think it serves any useful purpose,” he said.
“At the moment the government is saying this list will identify all landlords and agents that have previously breached their obligations under the Rental Tenancies Act. However, it is not clear how specific and how far back this list will review, which could open up unfair results for expired issues,” he said.
If the government wants to introduce a blacklist, then it should also include those tenants who trash houses, leave rubbish, or abscond without paying rent. “At the moment tenant blacklist databases exist. These are run by private companies. If we are addressing an imbalance of rights, then the government should run both,” Raimondo said.
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