Victorian Rental Reforms

Discussion in 'Property Management' started by Lil Skater, 5th Aug, 2018.

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  1. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Ah, a new announcement was made today about more rental reforms of the current Residential Tenancies Act.

    They’ve said there’s 130 reforms, but so far I think less than 20 odd have been announced - all very tenant oriented.

    This is the latest announcement today, but a few of these were already known/discussed back in October 2017.

    I don’t completely disagree with all of the announcements as the existing legislation is over 20 years old, however I think the Gov misunderstands the meaning of “fair”. I guess with the number of reforms that haven’t been discussed there very well could be a number of announcements that do make the to be legislation more “fair” but it’s yet to be seen.

    So, what are the pros and cons of some of the ones we know? Well, that depends which side of the fence you primarily sit on.

    I think having a 14 day auto release of the bond is awesome. The current legislation means that the bond needs to be released within 10 business days or an application to VCAT for an extension must be made - so all things considered, if you were already operating within the current legislation this really shouldn’t make a difference, but does mean tenants aren’t waiting potentially months for someone else to lodge some paperwork.

    I also think allowing pets is great, HOWEVER not every property is suited for it and needing to prove that isn’t ideal. Who makes the final decision? What does a property need/not need for it to be deemed that an owner can say no? I also note the property must be fumigated, so that’s a small pro in all of this.

    I’m still unhappy about the changes of the notices to vacate and strongly believe this will mean tenants are less likely to be given a second chance as after the initial lease you effectively wouldn’t be able to boot a tenant out unless you’re renovating, demolishing, family member moving in, PPOR clause or a breach of the tenancy. It might sound like you still have plenty of options, but when you’re actually playing the game this isn’t really the case.

    BOND! Limiting it to 4 weeks, regardless of the rent on the property is ludicrous. It takes a MINIMUM of 6 weeks to go to VCAT for rental arrears. So, where does that leave the investor?

    There’s a heap more and I could hammer on for days about it all. I have a lot of opinions - but I’d love to hear some others too!
     
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  2. thatbum

    thatbum Well-Known Member

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    Was there a complete list of proposals linked to that page somewhere? I didn't see it.

    I'll have a read and let you know what I think as well.
     
  3. Coffee

    Coffee Well-Known Member

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  4. Owlet

    Owlet Well-Known Member

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    I don't believe these have been passed yet.

    I don't agree with a blanket allowance for pets. There are many landlords who do permit pets - I don't think it necessary to force this on all landlords.

    Fumigating a house and cleaning the carpets does not remove the urine from the underlay, floorboards or yellow tongue. Even after the best carpet clean - pet hair still sticks to carpets. The perfumes carpet cleaning companies use only mask the smell of animals. Clawed and tattered carpet is not normal wear and tear. Scratched timber on doors and windows from pets scratching to be let in or out - not normal wear and tear. Droppings not picked up for 6mths - same as lawn not being mowed - yards reek. Some dog species are more active than others, or untrained so gardens and lawns are ruined. Fencing that is adequate for adults may need to be upgraded because not secure for pets. Someone's dog gets out and mauls a child walking past - owner's fault or will it now be the landlord's? What about the number and type of pets?
    What about renter's choice? Some tenants may wish to rent a pet free home - that has always been a pet free home. They may have allergies or their children do.
    (FYI - I have permitted pets in some IPs and even with good pet owners this stuff happens).
     
  5. L3ha7

    L3ha7 Well-Known Member

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    I should read and get better understanding as this part is very crucial for me.
     
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  6. D.T.

    D.T. Specialist Property Manager Business Member

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    Awful
     
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  7. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Not yet - apparently there's 130 proposed changes, but I've seen no more than 20. All of which are weighted in favour of the tenant.

    The Rentfair site doesn't go into all 130. I've tried Googling and what not to find more changes, but haven't had any luck. Maybe you know of some Gov website I don't that would have everything listed? If so, would love to see it myself!

    They've not been passed yet, no. They're expecting 2019 - but haven't given anything beyond it which is quite infuriating.

    Completely agree with your second point, fumigating is only one part of it. It does say tenants would be required to repair beyond fair wear and tear - but we all know that fair wear and tear is always interpreted quite differently. As I stated, some properties just aren't suited to pets and I'm curious who would be liable to make the property "safe" for a pet - surely this should fall onto the tenants responsibility, but who knows.

    Number and type of pets could, in theory, be restricted by council. Allergies, again a big one - some people could get quite severe reactions to pet hair and who is responsible for properly cleaning a house so it no longer carries allergens? It's certainly not the old tenant because that's beyond fair wear and tear, but a new tenant shouldn't have to pay to clean up after someone else and neither should the owner.

    With pets, I firmly believe (and this is from experience) if you have a good tenant you will not usually have too many issues with the pets. Good tenants tend to be good pet owners, with the existing legislation we have no cause to evict someone for getting a pet anyway - but it certainly makes life harder.
     
  8. Coffee

    Coffee Well-Known Member

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  9. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Ah, yes that was the original name of all of this. I didn't even think of that when searching for all the information as it has been under "Rent Fair" for so long and thus why I couldn't find anything!! This also wasn't circulated by CAV like some of the previous information was.

    It's interesting to see some of the outcomes of the surveys they did and how low on the agenda of the majority certain changes they're proposing. Only ONE PERCENT felt that bonds were too expensive, 70% with income under $40k pa raised it as an issue when considering a property - but I wouldn't rent a property over $350 per week to someone on $40k pa or less as it's not affordable. 58% said it's a consideration in the next income bracket, but again, only 1% actually said it's too expensive.

    Perhaps they need to increase it to rents over the median rent and review as per 7.1A - I could work with that, but limiting it to 4 weeks period is insane.

    74% of tenants said their notice to vacate time was adequate overall, at 90 days that increased to 92% and at 120 days it was 83%. I don't know how 17% could consider that four months was not enough time to find a property, but that's irrelevant. The fact is the majority of tenants feel that the existing notice to vacate times are adequate. Their proposal actually drops the longest notice to vacate to 90 days, and anything outside the initial tenancy it's half the current allowed time at 60 days. This is more favourable for an owner as they don't need to wait four months, however it also means the tenant turnover will be higher as anyone who was considering giving their tenants a chance will be booted out using an end of lease notice as outside of this they will have limited options to remove a tenant.

    It doesn't state the figures for tenants and pets, but showed that overall only 38% of owners said they never allow pets. This is a decent figure, of course - but it also says that of the 76% that don't "always" allow pets, 41% of those would consider it if they could accept a pet bond. So again, limiting the bond = unfair.

    Something I had not seen before which I very much like is the rights of entry. Existing legislation is minimum 24 hours and maximum of 7 days notice, plus only doing opens in the last 14 days of the tenancy. They're suggesting to increase the time period for tenants, but they're also suggesting increasing inspections to be in the last 21 days and not 14 - so this could help owners reduce vacancy times by having an additional week of access to secure a tenant.

    It also discusses further clarifying break lease costs, this would be good too if it extended to lease renewals. The existing legislation isn't clear, but VCAT will say you cannot charge break fees on a lease renewal and only the lease renewal fee - however this is not always the case as sometimes you do get full lease break fees on renewals.

    I think a number of the current issues we all face are actually with VCAT not enforcing the current legislation. There's a lot of things that should be very black and white, like non-payment of rent after 14 days means the lease is terminated - not all these second chance payment plans that are difficult to enforce anyway. It once took me EIGHT VCAT hearings to evict a tenant based on ongoing arrears, the previous PM had a payment plan order and the tenant would regularly break this payment plan, usually only by a couple of days - but instead of enforcing it and giving me possession immediately it went back and forth for another nine months.

    Things like breach notices are also notoriously difficult to enforce, as are the existing 120 day notices to vacate, not to mention bond/compensation claims and what is "reasonably clean". I think the existing legislation needs to change to bring it in line with the current rental market, but it also needs to be clarified more and properly enforced through the tribunal system which can go "either way" when it should just deal with the legislation and enforce it the first time around.
     
  10. kaibo

    kaibo Well-Known Member

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    another blow for investors to contend with. This adds up to the uncertain outlook with future capital gains (esp. if labour wins federal election). ACOSS, The Greens, Getup the left in general are driving us evil Multi-millionaire Investors to sell up cheap to the battlers.
     
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  11. thatbum

    thatbum Well-Known Member

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    Okay I've have had a read and a think now about the proposals and my general view is that they are not particularly groundbreaking or earthshattering amendments by and large - although perhaps with only one exception.

    Really a lot of proposals are just tidying up and neatening-at-the-edges of things or legal positions that already were happening in practice or in cases - yes even the changes about pets.

    What I was surprised and somewhat sceptical about is the change to being able to terminate a periodic or fixed term lease for no reason. Its really a huge step towards what happens in Europe etc, and I'm not sure how that's going to play out in practice.

    I'm not actually against it per se, but I think it was a mistake to aim to do that while at the same time limiting the bond to only 4 weeks in most cases.

    Really there was an opportunity to give tenants the extra rights that (in my opinion) they should be getting, but at the same time, balance the risks to a LL by allowing more bond in those same circumstances.
     
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  12. Lil Skater

    Lil Skater Well-Known Member Business Member

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    @thatbum yep, agreed - most is just clarifying what is already happening and making it more black and white overall. Which I'm totally on board for.

    As you'll note from all my posts, my main issues are the changes to the bond amounts and the limiting of the use of the end of lease notice to vacate and the total removal of the "no specified reason" notice to vacate. I think this limits the owners rights to have possession of their property back.

    I will admit there's plenty of cases where dodgy owners retaliate and boot tenants out when they probably shouldn't have, but this is the minority and the tenants do have rights to challenge this. Even if they do decide to comply and move, if they were given less than the stated amount of notice they can challenge that and easily win. I found when they were first talking about these reforms, the examples they were using on how things were "unfair" to tenants, were actually already illegal per the legislation.

    I recall someone said it took 6 months to get their bond back, this was always illegal and if the tenant took it to VCAT they would've been handed their bond back immediately.

    Another was given only a week or two to get out of the property, again, the existing legislation only allows that for a couple of specific reasons. Namely a breach of tenancy, or the landlord moving back into their PPOR which only applies to a certain number of lease agreements once they leave, and must be stated on the lease agreement.

    They probably could've clarified a couple of things, but left a lot of it as is. Instead they could've run these campaigns in an effort to educate tenants who otherwise don't know their rights. Per the two examples above, this would happen to the tenants anyway if they're dealing with a dodgy owner - the only difference is maybe if they found themselves in that position again they'd know it was illegal due to all the marketing efforts by the CAV/state gov.

    A change in legislation isn't going to make a difference to the few that already ignore it.

    Instead it's removing a few key rights to owners that allow them to mitigate their own loss by removing unsatisfactory tenants, or limiting costs beyond the bond. This is an issue.
     
  13. Lil Skater

    Lil Skater Well-Known Member Business Member

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    UPDATE:

    It's passed both houses now - Make Renting Fair

    I believe they'll try/want to implement ASAP - maybe early next year?
     
  14. SuzyG

    SuzyG Well-Known Member

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    I subscribe to the Better Renting newsletter as I have been watching this campaign closely... I just received this email - they want to roll out a similar campaign to reform ACT rental rules.

    There is a similar organisation in NSW also lobbying for changes to NSW legislation.

    I would suggest that other States will look closely at VIC legislation and model the reforms there.

    Hopefully, there is some lag time and we would see other states at least waiting to measure impact of reforms.

    I'm seeing a perfect storm brewing...
    - APRA
    - interest rate rises
    - low yields
    - tenant friendly legislation

    ........................................
    Last night, Victoria’s parliament passed legislation to make renting fair. This legislation will lead to minimum standards for rental properties , make it easier for renters to get pets , and give tenants the right to make minor modifications without needing landlord consent .

    The ACT might soon propose similar legislation. The government is currently looking at options to update rental laws, which could include stronger rights to have pets, eliminating no-fault evictions, and minimum energy efficiency standards. But if it’s going to happen, us renters need to make it happen.

    Come along to our ‘TenantTalks’ launch and learn how you can help improve renting in the ACT.

    The ACT government is currently reviewing rental laws. But positive changes could be opposed by vested interests from the real estate industry. We need to build our power , counter the industry voices , and win ambitious changes .

    That’s why we’re launching ‘TenantTalks’ on Sunday 7 October. At our launch event we’ll discuss what’s at stake and what you can do to help us win better renting laws in the ACT.

    Please RSVP here and join us on Sunday 7 October.

    Because of Victoria’s new laws, hundreds of thousands of renters will have fairer rents, improved rights, and better homes. We can achieve the same in the ACT - but only if we work for it.

    This is an exciting time and I hope you can join us to reform renting in the ACT.
    ................................

    Link is here -
    Last night, Victoria’s parliament passed legislation to make renting fair. This legislation will lead to minimum standards for rental properties , make it easier for renters to get pets , and give tenants the right to make minor modifications without needing landlord consent .

    The ACT might soon propose similar legislation. The government is currently looking at options to update rental laws, which could include stronger rights to have pets, eliminating no-fault evictions, and minimum energy efficiency standards. But if it’s going to happen, us renters need to make it happen.

    Come along to our ‘TenantTalks’ launch and learn how you can help improve renting in the ACT.

    The ACT government is currently reviewing rental laws. But positive changes could be opposed by vested interests from the real estate industry. We need to build our power , counter the industry voices , and win ambitious changes .

    That’s why we’re launching ‘TenantTalks’ on Sunday 7 October. At our launch event we’ll discuss what’s at stake and what you can do to help us win better renting laws in the ACT.

    Please RSVP here and join us on Sunday 7 October.

    Because of Victoria’s new laws, hundreds of thousands of renters will have fairer rents, improved rights, and better homes. We can achieve the same in the ACT - but only if we work for it.

    This is an exciting time and I hope you can join us to reform renting in the ACT.
    ...........................................

    Link is here - Lunch & launch: TenantTalks Canberra
     
  15. thatbum

    thatbum Well-Known Member

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    I agree. I think its pretty much inevitable that the other states will move to do this - its just a matter of time.

    If landlords want to get together as a group to fight this process, then its important to be selective in what specific reforms and arguments to target - you want to have some actual reasonable counter-proposals.

    This has been largely lacking in all the broad arguments against the reforms that I have seen. And without reasonable arguments, then these groups will pretty much have no credibility.
     
  16. SuzyG

    SuzyG Well-Known Member

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    You would think that PICA (Property Investors Council of Australia) would be ideally placed to lobby on this type of issue but a quick check of their facebook and website and nada.
     
  17. ChrisDim

    ChrisDim Well-Known Member

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    wow!

    Some I am OK with (ie 14 day automatic bond repayment)

    Some are in line with some other states (ie 4 weeks rent for bond)...

    Some will create more disputes, ambiguity and work for everyone including tribunals (such as allowing small works and pets in unsuitable properties)

    And some are simply dangerous like the blacklist for landlords and property managers OR the removal of no reason termination other than selling or renovating...!!!

    All that will happen will be far more careful selection, more refusals and tenants unable to secure a property and rents going through the roof in 2-3 years when all current supply is absorbed. Oh and a lot more work for property managers :(:(:(
     
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  18. pully

    pully Well-Known Member

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    Agree landlords will be more selective/careful who they accept as tenants.
    Perhaps the government needs to supply housing and manage the tenants with identified difficulties with maintaining a tenancy? Private landlords are not resourced to manage/cope with tenants who fail/or cannot meet their responsibilities to maintain their tenancy.
     
  19. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Update 2.0 from REIV is lead time is more like 18 months than early 2019 like what was originally thrown around.

    I'm okay with most changes as above and I think other states should look at theirs as well, but there's a lot that I don't think have been well thought out or will leave landlords out of pocket without further changes to VCAT.
     
  20. Coffee

    Coffee Well-Known Member

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    Last edited: 7th Sep, 2018