They have been dubbed the “biggest reforms to renting in Victoria’s history” and have already passed Parliament, so it’s important that any Victorian property investors are aware of these changes. The proposed reforms to the Residential Tenancies Act (RTA) were announced in late 2018 and have now passed through State Parliament, so it is just a matter of time before they must be adhered to.

This week our team at Loansuite explores some of the key changes and how they could impact your Victorian investment property. If you’re unsure about any of the proposed changes or how they might impact you, be sure to seek legal advice and speak to your property manager.

Let’s get into the changes:

Basic Name Changes

  • Landlords and owners of the property will no longer be called Landlords, but will be referred to as Residential Rental Providers.
  • Tenants will be referred to as Renters.
  • The Tenancy Agreement (TA) itself will be called the Residential Rental Agreement.

Rental Income

  • Any increases to the rent will be limited to just once every 12 months and the calculation method for the increase must be disclosed to the Renter. The current time frame is just 6 months.
  • The Renter must be allowed a reasonable free method through which they are able to pay their rent.
  • The property itself must be advertised at a fixed rental amount, which means that a range or minimum can not be stated.
  • You are not allowed to solicit or entice the renter to pay a higher amount than you have advertised, however if they offer it then you may accept it.
  • The bond that is both requested and accepted must be no greater than the amount of rent payable for one month unless the amount is twice the median amount of rent for Victoria.

Property Conditions 

  • Urgent repairs additions will include items such as; air-conditioning and cooling, toilets, vermin proof bins, hot and cold water, secure windows, cooktop, heating in the living areas, deadlocks on any external doors and blinds or window coverings in the bedrooms and living areas.
  • Urgent repairs will also be required for the following; any pest infestations, failure of any safety equipment including pool fences and smoke alarms, any mould caused by or related to the actual building structure.
  • A property condition report must be done prior to the renter commencing occupation of the premises and you must provide them with two copies if written and one if electronic.
  • The Residential Rental Provider, currently known as the landlord or owner, must ensure that the property is in a reasonably clean condition prior to the Renter commencing occupation of the property.
  • The Residential Rental Provider must also ensure that the property is in a reasonably fit and suitable condition, regardless of whether the Renter was made aware of any problems, how much rent is being paid and the age of the property.
  • The $1,000 limit for urgent repairs has been removed.
  • The Residential Rental Provider will require an order from the Victorian Civil & Administrative Tribunal (VCAT) to restrict the Renter from owning a pet on the premises. The VCAT will consider the type of pet, character of the property and other relevant circumstances.

Other Changes

  • Any victims of domestic or family violence will be allowed to terminate their rental agreements to ensure that they’re not held liable for the debts of those that are abusing them.

As you can see, there are some minor changes that will have very little impact, and there are those that could seriously impact the cash flow profile of your investment property. Be sure to do your homework upfront and be aware of what you’re in for if you are looking to purchase an investment property in Victoria.

 

 

LoanSuite Pty Ltd is your lending partner for all of your home loan, investment property, business and commercial financing needs. With our wide range of lending solutions, expertise in financial planning and investment strategies, and extensive experience in working with both Australian residents and Australian expats, we are your partners for your lending needs.

Book an obligation-free, complimentary consultation here today.

LoanSuite Pty Ltd is an Authorised Credit Representative (Credit Representative Number – 494608) of My Local Broker (Australian Credit License – 481374). Important Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.

 

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