A review of the Victorian Residential Tenancies Act (RTA) is well advanced - looking at key issues affecting the state’s 500,000 rental homes.
One key area that is being considered at present is the payment of rent, and also bond payments.
The Real Estate Institute of Victoria (REIV) has called on Consumer Affairs Victoria – the State Government department overseeing the review – to:
• Reduce the period for falling into rental arrears, from 14 days to seven days; and
• Introduce a pet bond to cover any damage caused by pets in rental homes.
REIV CEO Geoff White said that, at present, property managers and landlords are unable to issue a notice to vacate until tenants fall a fortnight into rent arrears.
A further shortcoming is that failure to pay rent does not become a breach of duty, which would streamline payment of rent when in arrears.
Mr White said that breach notices can be issued in Victoria for failing to keep a rental home in a clean state, while falling further behind in the rent doesn’t constitute a breach.
“This is unusual given that payment of rent is a fundamental part of the landlord-tenant relationship,” he said.
“We also see it as absolutely essential that the timeframe for non-payment of rent is reduced to seven days because by the time the matter goes before the Victorian Civil and Administrative Tribunal (VCAT), tenants can be more than a month in arrears.
“This causes significant financial distress for landlords, as it often impacts on their ability to pay the mortgage on their investment property.”
Sabina Aldouby, director at Luxe Property, said unpaid rent is one of the most common issues facing landlords.
“More than 35,000 applications were made to VCAT last year for a range of matters relating to rental arrears, bond and possession. While there are many good tenants out there, the reality is rent arrears will affect most landlords at some stage.
“The level of financial impact could be significantly reduced if property managers and landlords were permitted to be proactive in serving the tenant a breach notice earlier to remedy the situation.”
Mr White added that bond payments were also a key area in the review, with the REIV seeking the introduction of a pet bond.
“It’s important that landlords first consent to a pet being in their rental home,” he said, “with the provision of a pet bond providing an additional level of assurance, covering any damage that pets may cause.”'
Mr White said that the RTA review has been underway over the past year and is hitting a critical stage, with an Options Paper due to be released soon.
Access to tenanted properties a key focus for REIV in Residential Tenancy Review