New Proposed Reforms for Property Managers in Victoria: What You Need to Know
The Victorian Government is proposing a series of key reforms to the Residential Tenancies Act 1997 (Vic) (RTA). The bill(s) by which these reforms may be enacted has not yet been released for public scrutiny. Castellan Consulting is dedicated to distributing updates and sharing its own analysis of these reforms openly for the benefit of the property management profession at large, as and when the Government releases it. With the caveat that the below are subject to substantial revision, property managers should be prepared for these potential changes:
Ban on Rental Bidding:
Currently, under section 30F(3) of the RTA, a rental provider or agent must not solicit or invite offers above the advertised rental price. However, the new reforms aim to prohibit agents or rental providers from even accepting offers from renters that exceed the listed price. Effectively, this would mean that listed rent offerings could only be negotiated down.
“No fault” evictions scrapped (for first fixed-term lease):
Currently, sections 91ZZD and 91ZZDA of the RTA allow the rental provider to give a notice to vacate for the ending of a fixed term lease. The reforms intend to remove the right to give such a notice at the end of the first fixed-term lease with a given renter (presumably in respect of both those sections). This reform was announced on 31 October 2024.
New Rental Dispute Resolution Body:
A new dispute resolution body designed to hear and determine “simple” residential tenancies. The Government has announced that this body will commence work in 2025 with legislation to be introduced to Parliament in November 2024. It is still unclear who will sit on the body, what its procedural rules will be, what the precise limits of its jurisdiction will be (beyond potentially applying to repairs, compensation, bond claims and rental increases, though presumably not possession orders) and what appeal rights might apply to its decisions. The body will be administered by and through VCAT.
Portable Rental Bonds Scheme:
The proposed reforms would allow renters to transfer their bonds when moving between properties. The scheme’s new IT system is expected to begin its testing phase in 2025. It is still unclear how this will affect compensation claims from previous rental providers.
Extended Notice Periods for Rent Increases and Evictions:
The minimum notice period for rent increases and evictions would be extended to 90 days. For example, this could mean that notices to vacate under sections 91ZZB (property to be sold) or 91ZZA (residential provider moving in) would be increased from 60 to 90 days. This proposed reform was announced in early 2024, but there has been little comment from the Government since.
Mandatory Continuing Professional Development for Agents:
Ongoing professional training requirements will be introduced to raise industry standards. Real estate professionals and property managers will be required to stay updated on the latest regulations and best practices, enhancing service quality and compliance. This would most likely be done by way of a CPD points system similar to the legal or accounting professions. This reform was announced earlier in the year, but the Government has made no further comment on the proposals since then.
Changes to Bond Claims
The Government plans to introduce legislation requiring evidence to support bond claims if a RRP wishes to make a bond claim. Whether it would need to occur before the making of a VCAT application or at the time is unclear. Additionally, financial penalties will apply to those who make unjustified claims, Further details will be available once the legislation is introduced to Parliament.
Limit On Break Lease Fees
The Government plans to introduce a cap on break fees for fixed-term rental agreements of five years or less. The proposed model would set compensation at up to one week's rent per remaining month, capped at a maximum of four weeks' rent. The Government is consulting with renters and industry stakeholders to confirm the appropriate cap before finalising the legislation.
Spare Fobs and Keys
Under the new law, renters will have the right to request an extra fob for themselves or household members, and agents must provide it, barring any unreasonable grounds for denial. Whether it will only apply to apartment buildings, as per the press release on 31 October 2024 is unclear.
Castellan Consulting will continue to monitor these proposed reforms and provide updates as the draft legislation progresses. Our goal is to keep you informed and prepared to manage these changes effectively. Stay tuned for further guidance and practical advice.
