The Victorian government has introduced a new Bill into parliament that will allow landlords and tenants to enter into agreements beyond the existing cap of five years.

The legislation is aimed at improving security for long-term renters.

The Residential Tenancies Amendment (Long-Term Tenancy Agreements) Bill 2017 will also provide an online matching service for landlords and tenants who are interested in long-term leases.

But Gil King, CEO of the REIV, says the new legislation does not provide adequate protections for landlords and will place their investments at risk. 

King said the government rushed the legislation through parliament, and failed to take the opinions of rental property suppliers into consideration.

“The legislation will cap bonds to the equivalent of four weeks rent, which is inadequate protection for a home which may be tied up for potentially a decade," said King.

“Given the median house price in Melbourne is currently $822,000, a rental property is a significant financial asset for landlords and all future legislation needs to benefit all stakeholders – not just tenants," he said.

King said for the program to be successful, long-term leases must be attractive for landlords.

“Without adequate protections for landlords, long-term leases will remain unattractive in the private rental market, rending this legislation ineffective in improving security of tenure for tenants," he said.

“While the majority of tenants do the right thing, landlords and property managers represent around 60,000 applications at VCAT every year – the majority of which are for rent arrears and possession," said King.

Read more about the Victorian government's plan for long-term leases.

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