Victoria's Rental Legislation changes and what it means for you

In September 2023, the Victorian Government launched its Housing Statement covering new policy announcements for planning and approval changes, additional social housing and further protections to tenants’ rights. Victoria already has some of the strongest rental protections in the country and these changes aim to provide better protection for both renters and residential rental providers and ensure a fair and transparent rental market. The below is a summary of the key changes which you should be aware of. 

Please note: that these announcements have not yet been legislated and we are not yet aware of what date they will become effective from.

Summary of key changes

1. Bond Changes

A portable rental bond scheme has been proposed, enabling renters to transfer their bond from one property to another, eliminating the need for a new bond payment each time they move. This not only eases the financial strain on renters but also streamlines administrative processes for agents and property managers. The result is a more efficient rental market, benefiting both renters and rental providers. 

What this means for you: Subject to the details on how this scheme will work, on face value it appears to be a welcome initiative which should reduce the time it takes to receive a bond from a new tenant whilst alleviating the financial burden on renters having to have two bonds concurrently as they move between properties.

2. VCAT Changes

The Victorian Civil and Administrative Tribunal (VCAT) will undergo some changes in its processes and timelines. These adjustments aim to expedite dispute resolution and provide faster outcomes for both residential rental providers and renters. 

What this means for you: Again, this is a welcome announcement subject to further details, that will hopefully help reduce the significant backlog of cases awaiting to be heard at VCAT, which in some cases is currently more than 18 months. 

3.  Notice Periods for Rent Increases and Notices to Vacate

Residential Rental Providers will now be required to provide tenants with at least 90 days' notice for rent increases, allowing tenants more time to adjust to the changes in their rental expenses. Notices to vacate will also be extended to 90 days from 60 days. 
These actions help rental providers adjust rental rates in line with market conditions and address problematic renter situations. Extending notice periods to 90 days can offer rental providers a more reasonable timeframe to make necessary changes and maintain the financial stability of their rental properties. This approach promotes a balanced and fair approach to property management, ensuring rental providers have sufficient time to address rental concerns while providing renters with ample notice to make alternative housing arrangements.

What this means for you: To ensure a smooth process for issuing a Notice to Vacate for reasons such as selling the property, moving in, or renovating, it's important to note that the required notice period is being extended. For future rent increases, our team will reach out to you with ample notice, at least 90 days before your lease expires. 

4. Standard Application Forms

To streamline the application process and enhance transparency, new standard application forms will be introduced. These forms will be user-friendly and contain all the necessary information for a successful application. 

This standardised approach will simplify the application process for rental providers, reducing the administrative burden and ensuring that they receive consistent and necessary information from prospective renters. Additionally, it will establish clear guidelines on the type of information that can be collected and how long it can be retained, promoting responsible data handling practices and safeguarding rental providers compliance with privacy regulations. Ultimately, this initiative strives to create a balanced and fair rental application process that benefits all parties involved. 

What this means for you: Our application forms have consistently adhered to the established guidelines, so this adjustment should not significantly affect our ability to secure a renter or carry out reference checks. We will maintain our commitment to conducting comprehensive reference checks and providing you with as much permissible information as possible.

5. Rental Bidding

In 2021, a new law was enacted to prevent real estate agents and rental providers from encouraging offers above the advertised rental price. However, due to a tight rental market with very low vacancy rates, renters began making unsolicited bids to secure properties, offering higher weekly rent or more upfront payments. To level the playing field for renters, all forms of rental bidding are now banned, making it an offense to accept such bids. Stricter penalties were also introduced for agents and rental providers breaking this law. 

What this means for you: As is often already our recommendation, it is now imperative that a property is initially advertised on the high-end of our expected rental appraisal range and that the advertised price is adjusted down over a leasing campaign based on the level of interest (i.e. start high and reduce over time).

6. Properties Selling/NTV End of Fixed Term - Cannot Release Higher than Previously Rented For

In cases where a rented property is being sold or if you issue a Notice to Vacate - End of Fixed Term, the new legislation prohibits rental providers from releasing the property at a rent higher than the previous rental agreement. This safeguards renters from abrupt and substantial rent increases during a sale or tenancy.

We will maintain flexibility in rent adjustments between successive fixed-term leases, addressing concerns related to certain instances where tenants choose not to renew their leases. This approach ensures that rental providers have the ability to adjust rents according to market conditions and property maintenance needs when relisting rental properties. By allowing agents and rental providers to offer a new lease after a renter chooses not to renew their lease, we support the property market's dynamism and provide rental providers with the opportunity to set rents that reflect current market rates. This approach encourages a healthy rental market, ensuring rental providers can efficiently manage their rental properties.

What this means for you : If you decide to sell your property and it doesn't sell, leading you to consider relisting it for rent, or if you choose to issue a Notice to Vacate - End of Fixed term notice on your renters, we are obligated to advertise it at the previous rental rate. 

At LongView, we are dedicated to supporting our clients through these changes and providing expert guidance to navigate the evolving regulatory landscape. If you have any questions or require assistance in understanding and implementing these changes, please do not hesitate to reach out to our team.