That article drew on a submission to the Victorian Law Law Reform Commission several years ago, reflected in the Commission's 2015 Photographing and Filming Tenants’ Possessions for Advertising Purposes report noted here.
It is thus interesting to see that the state parliament has passed amendments to the Residential Tenancies Act 1997 (Vic), strengthening occupier rights.
The amendments include provision for establishment of a Commissioner for Residential Tenancies, to be appointed to "champion the rights of Victorian tenants in the private sector". The Commissioner will "consult widely with tenant and consumer advocacy groups across the rental sector to identify systemic issues and will give tenants a voice in seeking changes to renting laws".
Tenancy blacklists remain contentious. The amended legislation encompasses a landlord blacklist. The Government indicates that
Currently, tenants who breach their obligations under the RTA may find their names on a tenancy database, sometimes referred to as a ‘blacklist’. Landlords and real estate agents will now be subject to similar measures. We will create a landlord and agent ‘blacklist’ that will be available to all tenants so they can identify landlords and agents who have previously breached their obligations under the RTA.The Government states
The Residential Tenancies Act is the main source of consumer protection for Victorians living in rental housing, while also outlining the obligations of landlords and property managers.
Since it was introduced, there have been many changes, both in the rental market itself, and in the characteristics, needs and expectations of tenants and landlords. In the past, private rental was commonly a relatively short-term transitional arrangement, which ended in tenants moving to home ownership or in a move to social housing.
This is no longer the case, with growing numbers of Australians in rental housing, and around one-third of private tenants nationally considered to be 'long-term', having rented continuously for over 10 years. An increasing number of long-term tenants are either older people on fixed incomes, or families with children, for whom stability is important.
The reasons why people become and remain landlords have also changed significantly, with rental property becoming an important investment and a key feature of many people’s retirement plans. ...
The review represented a once-in-a-generation opportunity to revisit the regulatory settings that have been in place since 1997, and to ensure they meet the needs of participants in today’s rental housing market.
Public consultation was a significant feature of the review, commencing with the release in June 2015 of the consultation paper Laying the Groundwork, followed by a series of six public consultation papers covering a broad spectrum of rental issues – from security of tenure to protections for people living in caravan parks and residential parks. xxx In January 2017, Heading for Home, an options paper outlining the outcomes of public consultation, was released for final discussion.
During the review, more than 4,800 public comments were submitted by a range of people and organisations.
... Drawing on stakeholder submissions, broader consultation across government, as well as the results of independent market research, a package of more than 130 reforms to the Residential Tenancies Act was developed.
The reforms are framed around the reality that a growing proportion of Victorians are priced out of home ownership and likely to rent for longer periods of time. There is, consequently, a need to rebalance the market through additional protections for a highly diverse population of renters.It goes on
A number of the reforms were announced as part of the Government’s ‘Rent Fair’ campaign in October 2017. These included:
- allowing animals to be kept in rented premises
- allowing renters to make prescribed minor modifications to a rental property
- bolstering security of tenure and ending ‘no fault’ evictions by removing the ‘no specified reason’ notice to vacate and restricting the use of ‘end of the fixed-term’ notices to vacate to the end of an initial fixed term agreement
- establishing a non-compliance register ‘blacklisting’ residential rental providers and agents who fail to meet their obligations
- providing for the early release of bonds with the consent of both parties to the tenancy agreement
- restricting solicitation of rental bids by residential rental providers and agents providing for yearly, instead of six-monthly, rent increases
- providing for faster reimbursement where renters have paid for urgent repairs
- increasing the number of properties to which the statutory maximum cap of four weeks for bond and rent in advance applies
- enabling automatic bond repayments, which will be available to a renter within 14 days where the parties are not in dispute over the apportionment of the bond
- requiring mandatory pre-contractual disclosure of material facts, such as an intention to sell the rental property, or the known presences of asbestos
- prohibiting misleading or deceptive conduct inducing a person into renting a property.
The reform package incorporates more than 130 proposed reforms, spanning all types of rental housing currently regulated by the Residential Tenancies Act: public and private residential housing, rooming houses, caravan parks and residential parks.
In keeping with a forward-looking approach, the reforms include explicit legislative purposes for the Residential Tenancies Act and up-to-date terminology befitting of a modern regulatory framework. Gone is the feudal language of landlords and tenants, to be replaced by ‘residential rental providers’ and ‘renters’.
While the principal aim of the reforms is to ensure access to fairer, safer housing for Victorian renters, the reform package also incorporates a number of changes aimed at ensuring that residential rental providers (landlords) have appropriate tools to deal with common issues they identified as arising in the course of a rental relationship.
To name a few supply-side reforms, rental providers will now have strengthened termination grounds for malicious property damage, as well as new grounds responding to serious threats and intimidation, and serious violence by visitors to managed premises. Serial late payment of rent of less than 14 days will also now entitle a rental provider to apply for compensation to recoup any arrears, whereas this was previously limited to situations where a renter had received a notice to vacate.
While some of the changes may be seen as unfair by some supply-side stakeholders, for a large number of rental providers they reflect current practice. In this respect, the changes to the legislation are not without precedent and are, in fact, supported by a number of suppliers of rental housing. The reform package aims to bring the rest of the market up to a consistent standard.
For example, the review found that the vast majority of rental providers already only increase the rent once every 12 or 24 months. For this reason, the move to annualised rents does not actually represent a major change.
Similarly, ‘no reason’ notices to vacate are also only used by one in 11 (9%) of landlords. The repeal of this notice is therefore highly unlikely to be disruptive, as landlords already rely on legitimate, recognised reasons in the legislation when terminating a rental agreement.
Pet-related changes also appear to be in line with majority views. Independent market research conducted during the review found that one in four (24%) landlords report that they ‘always’ allow pets at their rental property. A further 38% ‘sometimes’ allow pets depending on the type of pet (for a total of 62% of landlords who might allow a pet at their rental property).
Rental providers who currently try to do the right thing by renters will not be affected by the changes. However, those who cut corners or who do not prioritise compliance with their obligations will find themselves facing increased monetary penalties and other punitive action.
The reforms are the first, important step towards a more future-proofed Residential Tenancies Act. Work will continue next year to ensure that the suite of reforms in the Bill is supported by complementary, easily accessible and effective dispute resolution through the Victorian Civil and Administrative Tribunal (VCAT), encouraging the parties to assert their rights in a non-adversarial manner.The Second Reading Speech states
A number of the reforms were foreshadowed as part of the Andrews Labor Government's 'Rent Fair' campaign in October 2017. These include:
- allowing animals to be kept in rented premises;
- allowing renters to make prescribed minor modifications to a rental property;
- bolstering security of tenure by ending 'no fault' evictions by removing the 'no specified reason' notice to vacate and restricting the use of 'end of the fixed term' notices to vacate to the end of an initial fixed term agreement;
- establishing a non-compliance register 'blacklisting' residential rental providers and agents who fail to meet their obligations;
- providing for the early release of bonds with the consent of both parties to the tenancy agreement;
- restricting solicitation of rental bids by residential rental providers and agents; providing for yearly, instead of six-monthly, rent increases;
- providing for faster reimbursement where tenants have paid for urgent repairs;
- increasing the number of properties to which the statutory maximum cap of four weeks for bond and rent in advance applies;
- enabling automatic bond repayments, which will be available to a renter within 14 days where the parties are not in dispute over the apportionment of the bond;
- requiring mandatory pre-contractual disclosure of material facts, such as an intention to sell the rental property, or the known presences of asbestos; and
- prohibiting misleading or deceptive conduct inducing a person into renting a property.
These protections are rounded out with other important changes aimed at improving the state of rented premises and ensuring that renters have a safe and sustainable living environment:
- mandatory condition reporting to ensure the state of rented premises is accurately recorded at the beginning and end of a rental relationship;
- mandatory safety-related obligations, notably electrical and gas appliance servicing every two years, and compliance with smoke alarm and pool fence regulations; and
- the power to prescribe in regulations minimum standards for residential rental properties.
Minimum standards that would be prescribed include basic, yet critical requirements which no reasonable person could object to, such as:
- a vermin proof rubbish bin; a functioning toilet; adequate hot and cold water connections in the kitchen, bathroom and laundry;
- external windows that have functioning latches to secure against external entry;
- a functioning cooktop, oven, sink and food preparation area;
- a functioning single action deadlock on external entry doors;
- functioning heating in the property's main living area; and window coverings to ensure privacy in any room the owner knows is likely to be a bedroom or main living area.
This power to prescribe minimum standards has been flexibly designed, so that it can incorporate standards imposed under other Victorian legislation, such as energy and water efficiency requirements. A failure to comply with the standards will trigger a variety of responses, including a fine, urgent repairs to the premises, or termination of the parties' agreement before a renter has even moved in.
Importantly, the Bill implements each component of recommendation 116 of the Royal Commission into Family Violence to better protect and support family violence victims living in residential rental housing. Consideration of family violence has also been interwoven with relevant provisions of the Act to avoid further victimisation of vulnerable renters while ensuring continuity of housing.
Specialised reforms have also been included for alternate tenure types such as rooming houses, caravan parks and residential parks. The Bill allows for a new, tailored rooming house agreement to be developed for operators and residents wishing to enter into an agreement with a defined occupancy period. Parties who do not wish to enter into the new agreement will be subject to the ongoing residency right currently conferred by the Act. Use of tenancy agreements in rooming houses will only be allowed in respect of residents living in self-contained apartments that form part of the rooming house.
Importantly, the Bill responds to ongoing concerns about the procedural rigour, and impacts, surrounding park closures. Residents affected by the closure of a park will now have access to compensation in particular circumstances, and park owners will need to comply with stricter notification and permission processes before they can proceed with closing down a park.
While the main focus of the Bill is improving protections for vulnerable renters, and greater security of tenure, these reforms are offset, in a number of instances, by increasing clarity around renter responsibilities. Residential rental providers will now be able to terminate a tenancy if a renter or any other person occupying or jointly occupying the rented premises has seriously threatened or intimidated the residential rental provider, their agent, or a contractor or employee of either.
Existing termination grounds have been fine-tuned to ensure they provide residential rental providers with effective tools for managing risks arising during a tenancy. For example, renters who intentionally or recklessly damage premises will no longer be able to avoid eviction on the basis of a prediction by VCAT that the conduct will not recur.
Termination for repeated non-payment of rent will now be underpinned by a more structured process. Tenants who receive four notices to vacate for being 14 days or more in arrears in any 12-month period risk being evicted the next time they receive another notice to vacate, unless they can pay the arrears, satisfy the terms of a payment plan (where such a plan is imposed by VCAT), or demonstrate that it would not otherwise be reasonable or proportionate to end the rental relationship. This 'reasonableness and proportionality' test would also apply to other applications for a possession order to ensure that renters are not evicted for trivial or easily remediable reasons.
Tenants will need to comply with new safety-related duties to ensure they play their part in ensuring the safety of the premises. This also includes a prohibition on tampering with any safety devices, such as smoke alarms, unless it is reasonable to do so in the circumstances.
Rights of entry have been significantly clarified to ensure that inspections can be conducted in an orderly manner, while avoiding undue interference with renters' daily lives. For example, residential rental providers will have a clear right to conduct at least two opens for inspection per week when re-letting or selling a property. Renters would have the right to refuse further inspections, and would be compensated for any inconvenience, as well as loss of property that might occur during an inspection.
The Bill also modernises the process for dealing with goods left behind by a renter, and empowers the Director of Consumer Affairs to issue guidelines clarifying the operation of the RTA.
The Bill implements the Victorian Law Reform Commission's recommendations about photography of premises, allowing residential rental providers to do what is necessary to re-let or sell their premises, while balancing the need for renters to impose restrictions on the types of photographs or videos that may be taken.
