So it's no wonder that investors feel as though the goalposts are constantly changing when it comes to maintaining and managing their investment property.
The next wave of reforms, set to take effect by November, aims to make renting fairer and more stable for tenants. Whilst there's no doubt these reforms are necessary for safety and compliance, it's clear that more needs to be done to help alleviate the financial burden placed on landlords.
It's estimated that over 24,000 rental homes have been lost to investors fleeing the Victorian market in response to mounting regulations.
The Victorian State Government should consider introducing incentives such as land tax relief for investors who meet compliance standards within a reasonable timeframe.
Similarly, insurers should consider lowering premiums for compliant investors, given the significant reduction in their risk and potential claim payouts.
We need to both encourage compliance and reinvigorate investor confidence in the Victorian rental market.
So what do landlords need to be across with more changes on the way later this year?
Updated minimum standards
A critical reform is the expansion of what constitutes minimum rental standards. From November, properties must meet certain standards before being advertised, not just when a renter moves in.
This includes new requirements around safety, heating, air conditioning and insulation, which are in addition to the minimum standards introduced in 2021.
- From December 1, all window cords must have safety anchors.
- From October 30, ceiling insulation and draught sealing will become mandatory, especially for new leases or when old systems require replacement or repair.
Landlords should be on the front foot when it comes to making these modifications to their investment properties and ensure their property managers are keeping them in the loop of their responsibilities.
New grounds for eviction
A big change coming on November 25 is the end of 'no reason evictions'. This means rental providers can't end a fixed-term lease without a valid reason.
While landlords still retain the right to end a tenancy for personal use, to sell the property with vacant possession, or to undertake significant renovations, these actions will now require more thorough documentation and justification.
Longer notice periods
Notice periods will be longer for both rent increases and notices to vacate. Rental providers will need to give 90 days' notice instead of 60 to allow renters more time to budget for an increase or find a new home.
The government will also crack down on rental bidding, with stronger penalties for landlords or agents who engage in these practices.
Streamlined application process
A new standard rental application form will be introduced to simplify the process and enhance privacy protections.
Key changes include:
- Stricter rules on the types of information landlords and agents can collect and retain.
- Data of unsuccessful applications must be deleted within 30 days (or up to 6 months with renter consent).
Faster dispute resolution
A new dispute resolution body called Rental Dispute Resolution Victoria (RDRV) will be established to streamline conflict resolution and reduce reliance on the Victorian Civil and Administrative Tribunal (VCAT).
This initiative aims to address long delays for dispute hearings, many of which have stretched beyond 12 months since the onset of the Covid-19 pandemic.
What these reforms mean
These reforms represent a big shift for rental providers and tenants in Victoria.
For investors, they highlight the need for proactive compliance, regular maintenance, and proper management. These, however, are expected to bring additional costs that may force some landlords to sell or raise rents to offset expenses.
For renters, the changes may provide greater security, fairness, and improved living conditions.
There's a fine line balancing all these things, and with investors already moving out of Victoria, it's clear we haven't seen the full impact of these reforms yet.
Let's hope the State Government moves swiftly to implement meaningful safeguards that will restore investor confidence while supporting a sustainable, well-regulated rental sector.
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