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 when ending a rental agreement.
Rental Provider = Landlord
Rental Applicant = Tenant
Rental Agreement = Lease
1. Notice to Vacate
Rental providers cannot issue a 120-day ‘no specified reason’ Notice to Vacate.
To end a rental agreement, they must provide a valid reason such as sale, change of use or demolition of the rental property, or the rental provider moving back into the rental property.
2. Reasonable and proportionate test for VCAT
VCAT must now not issue an eviction Possession Order without first considering whether it is reasonable and proportionate in the circumstances of the application to do so.
This reform also applies to all rental types, including rooming houses, caravan parks and residential parks.
3. Claiming bond
Renters can now apply to the Residential Tenancies Bond Authority (RTBA) to get their bond back, if they cannot get their rental provider’s agreement, to have all or part of their bond released.
4. Notice to vacate for endangering safety
Rental providers can issue a Notice to Vacate if the renter or their visitor endangers the safety of neighbours, the rental provider or their agent, or a contractor or employee of either the rental provider or their agent.
5. Limiting the use of ‘End of Fixed Term’ Notices to Vacate
Rental providers can only issue a Notice to Vacate at the end of the first fixed-term of a rental agreement. This does not apply to long-term rental agreements of more than 5 years.
6. Flexible end date for fixed term agreements
A Notice to Vacate for the end of a fixed-term agreement can specify a date on or after the end date specified in the fixed-term agreement.
7. Evidence for change of use Notice to Vacate
Rental providers must attach documentary evidence to a Notice to Vacate based on a change of use, e.g.: attaching a building permit.
8. New ground for issuing Notice to Vacate – Threats and intimidation
Rental providers can give renters a 14-day Notice to Vacate if the renter, or any person occupying the rented property, has seriously threatened or intimidated the rental provider or their agent, or a contractor or employee of either the rental provider or their agent.
9. Clarification for Notice to Vacate for damaging property
A Notice to Vacate can be issued where a renter or their visitor, by act or omission, intentionally or recklessly causes serious damage to the rented property, including to any safety equipment or common areas.
10. Professional cleaning requirements
A term in a rental agreement can only require professional cleaning if it is needed to return the property to the condition it was in at the start of the rental agreement, taking into account fair wear and tear.
11. Changes to procedure for goods left behind
Rental providers must give renters notice of goods left behind and store these in a safe place for at least 14 days after giving the notice. Further detailed requirements apply for the storage, disposal, sale and reclamation of goods left behind by renters.
12. Calculation of compensation for termination of a fixed-term rental agreement
Rental providers can apply to VCAT for compensation if a renter terminates a fixed-term rental agreement before the end date. The amount payable will be determined based on the loss incurred by the rental provider and any hardship suffered by the renter. When making a compensation order in the case of breaking a rental agreement, VCAT must consider the severe hardship the renter may have suffered due to an unforeseen change in circumstances, if the agreement had continued.
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 firstname.lastname@example.org