New rental laws came into effect on 29 March 2021.
The law changes expand the rights and responsibilities of renters significantly and Landlords need to be aware of them.
The changes span the lifecycle of a rental agreement - from before you sign a rental agreement until after the agreement ends. This article deals with issues that emerge before you rent.
1. Selecting the Renter
1.1 Fixed Rent
Rental properties can only be advertised with a fixed price from 29 March 2021.
It is now unlawful to:
advertise a property for rent with a price range
request bids for rent.
1.2 Can’t discriminate
In a rental application, you cannot ask a potential renter to provide any of the following information:
if a renter applicant has ever had a dispute with or taken legal action against a rental provider.
whether they have ever had bond deducted by a prior rental provider
bank or credit card statements that show transactions made by the renter
A rental provider cannot discriminate of a person’s:
carer status, family responsibilities, parental status
gender identity, lawful sexual activity, sexual orientation
race (including colour, nationality, ethnicity and ethnic origin)
religious belief or activity
From 29 March 2021, you must provide a disclosure statement about discrimination to all applicants.
However, it is not unlawful discrimination to choose not to rent to people who have not rented before.
If a rental applicant has unsuccessfully applied to rent a property, or if a renter has been asked to leave a property and they believe the rental provider, agent or operator is discriminating against them, they can apply to The Victorian Equal Opportunity and Human Rights Commission and VCAT for reinstatement and/or reimbursement.
1.3 Children and renting
A rental provider or agent cannot refuse to rent out premises to someone because they will have a child under the age of 16 living with them.
The only reasons a rental provider can refuse to rent their property to someone with children is if the property is:
the rental provider's main residence
unsuitable for children.
1.4 Pets and renting
1.4.1 Permission not withheld
Renters who want to have a pet in the property must ask their rental provider for permission.
It is not unlawful discrimination if a rental provider does not rent a property to someone with a pet. However, there are laws that say that a rental provider cannot say no to a renter having a pet unless they have a good reason. Importantly, if they want to refuse, they must apply to VCAT for an order to refuse permission.
All renters, including those with pets, have a responsibility to keep their rental property clean, avoid damage, and not be a nuisance to others. The rental provider has rights if a pet causes damage or other problems but again they must apply to VCAT.
1.4.3 Pet Bond
Rental providers and owners cannot ask for an additional bond as a ‘pet bond’.
For apartments, the Owners Corporation may have its own rules about pets.
1.4.5 Assistance dogs
A pet means any animal except an assistance dog, which is a dog trained to help a person with a disability. Assistance dogs do not count as pets.
People who have assistance dogs when they apply for a rental property or who get one during their rental agreement cannot be discriminated against. You cannot:
refused a rental property or room because of their assistance dog
asked to remove their assistance dog from a rental property or room
asked to vacate their rental property or room because of their assistance dog
asked to pay an extra charge because of the assistance dog.
2. Disclosing things about the property
For all new agreements signed on and after 29 March 2021, before signing a rental agreement, you must disclose certain information about the property to the renter.
The renter must be informed of whether:
an agent has been engaged to sell the property or a sale is imminent.
a mortgagee foreclosure is pending,
the rental provider is not the owner of the property, and acting for someone else,
electricity is supplied to the property,
the premises or common property is known by the rental provider to have been the location of a homicide in the last 5 years,
the premises comply with the rental minimum standards,
(from 31 December 2021) the rental provider has received a repair notice in the last 3 years related to mould or damp in the premises which is caused by or related to the building structure,
the date of the most recent gas safety check, electrical safety check, and pool barrier safety check (if relevant) and any outstanding recommendations from those checks.
the premises are registered under the Heritage Act 2017
the premises are known to:
be contaminated from the trafficking or cultivation of drugs in the last 5 years
have asbestos based on an inspection by a suitably qualified person
be affected by a building or planning application
the premises or common property has any building defects or safety concerns as determined by a relevant authority,
there is a current dispute over building work or with the Owners Corporation which affects the premises, and
there are any Owner’s Corporation rules applicable to the premises.
3. Rental Agreement & Condition Reports
The new Residential Tenancies Regulations 2021 provide for new prescribed rental agreements (less than five years, and greater than five years) which must be used as the basis for any rental agreements from 29 March 2021.
Similarly, the required condition report must be in the prescribed format.
Depending on how much the rent is the rental provider or agent can ask for a bond. The maximum bond is 1 month’s rent (unless the rent is more than $900 per week). In some cases, the rental provider may ask the Victorian Civil and Administrative Tribunal (VCAT) to increase this limit.
Bonds must be lodged with the Residential Tenancies Bond Authority.
At May Klye & Associates, we specialise in dealing with the accounting and tax aspects affecting property investors, be they residential or commercial. We have well over a hundred property investor clients, and we have extensive experience in getting them the best tax outcome. If you would like to know more, call Noel or Amanda on 03 9585 7555 or email us at email@example.com