With Victorian landlords already bound by a number of obligations, property investors have been put on edge by a new proposed set of restrictions to add to their concerns. Think Property & Co report on the proposed changes to the RTA in today’s in-depth blog.
Over the past year, the Victorian Government has been undertaking a Residential Tenancies Act review titled ‘Fairer Safer Housing.’ And while the report details a number of proposed changes, the key concerns outlined in the Government proposal are worth noting as they’ll directly affect Victorian landlords and tenants if implemented.
Pets in rental properties
According to the Government’s Options Discussion Paper, ‘pets in rented premises were frequently a source of concern, with tenants taking the view that landlords often unreasonably withheld consent to a request to keep a pet.’
Considering these proposed changes, it should be noted that each landlord’s property is unique, and not all are suitable for animals. While we love pets at Think Property & Co (have you met our office Frenchies, Frankie and Delilah?), we understand that many landlords reject tenants with animals for perfectly valid reasons. Keeping an unsuitable pet in a tiny one-bedroom apartment on the fifth floor carries with it the risk of substantial property damage, as the animal may endure frustration from its enclosed space. Insurance may not always cover damage caused by cooped-up pets, and distressed animals can be upsetting for neighbours, too.
Legislation which makes it more difficult for landlords to ban pets from their rental properties may also result in higher bonds and insurances for tenants across the board – be they pet owners or otherwise. These inflated costs will only make compound housing affordability issues, which certainly won’t be of benefit to any in the community.
Extending leases without consent
Imagine if you had to sell your property, but were restricted from doing so within a reasonable time frame. You’d not just be losing the right to sell to an open market – your inability to sell within a given market could result in genuine financial loss! This circumstance is what landlords may be dealing with in future should leases be extended without consent.
Another proposal is the abolition of lease-break fees, which might seem fair at first. However – would you consider fourteen days’ notice to vacate a reasonable time frame? Many landlords would not, and we believe that a blanket abolition of penalties for lease-breaking is likely to result in losses for some property investors, especially those in rural areas.
Changes to minimum standards
By tightening minimum standards for rental properties, landlords could be left in the lurch when it comes to maintenance. This could result in the sorts of modifications that will cost landlords substantial funds to repair or rectify after tenants leave their property. On this matter, Think Property & Co agree with the Real Estate Institute of Victoria (REIV) when they state ‘there should be only one standard for residential property. The fact that a property is rented out should not require a higher standard. These minimum standards are already set out in the Victorian Building Regulations and Codes.’ In short, tenants are already protected and a big part of our job and property managers is to ensure that the assets we care for are maintained in a livable condition.
By implementing these new minimum standards, many landlords will struggle to maintain their properties – they could even be forced to repaint their rental residence just to make it eligible for an open for inspection! Normal ‘Mum and Dad’ investors who have limited cash flow and rely on building wealth through property will likely exit the market in droves, affecting the value of the property market and the ability of superannuants to support themselves in years to come.
Other key matters of concern include changes to the regulations around ‘non-structural modifications,’ which could allow tenants to make a range of cosmetic changes to a landlord’s property without consent. Additionally, privacy concerns regarding the provision of a landlord’s home address for serving notices could see tenants make house calls in regards to their rental property – eliminating the Property Manager’s professional role as an intermediary.
At Think Property & Co, we believe it’s better for everyone when landlords’ and tenants’ rights and responsibilities are balanced. If you’d like to learn more about the ‘Fairer Safer Housing’ project encompassing the RTA review, you can read the recent Options Discussion Paper titled ‘Heading for Home’ here.