Rent and bonds
Rental properties must be advertised at a fixed price, and RRPs and agents cannot request or solicit rental bids. The reform does not prevent RRPs and agents from accepting a rental bid if it is offered unprompted by a prospective renter.
Solicitation of bids exacerbates the imbalance of power between RRPs and renters, who may feel pressured to pay more than they can afford in order to get a rental. The reform leaves market participants to choose if they want to offer a bid, rather than in response to opportunistic price-gouging by RRPs and agents.
Rent increases will be limited to no more than once per year. This reform also applies to rooming houses, caravan parks and residential parks.
For rent increases that occur during a fixed-term residential rental agreement, the amount or method of calculation for the increase must be set out in the agreement (for example, no more than X per cent in a 12 month period).
RRPs must provide at least one reasonably available fee-free method of paying rent. RRPs will also be required to inform renters about any extra costs involved with a particular method of rent payment before they consent to use it. This reform also applies to payment of rent in rooming houses, caravan parks and residential parks.
RRPs will be required to permit rent payments via Centrepay. This reform will address the current practice where some RRPs reportedly refuse to accept rent payments through Centrepay, and will also apply to rental arrangements in rooming houses, caravan parks and residential parks.
The cap of one month’s rent for both bonds and rent in advance will still apply with an exemption for high value properties and VCAT discretion to set a higher amount. The current high value exemption (for properties with a weekly rent of more than $350) will be updated to reflect market rents, and set at twice the median rent for Victoria. This reform also removes the current exemption when a property is the RRP’s principal residence. This reform also applies to high value exemptions for bonds in residential parks.
Given the introduction of new long-term leases and requirements for RRPs to allow property modifications, RRPs will be able to take additional bonds for long-term leases and in respect of a renter’s obligation to restore any modification.
Renters can apply to the Residential Tenancies Bond Authority (RTBA) to have all or part of the bond released either with or without the RRP’s consent. If both parties have agreed, the RTBA will pay out the bond in accordance with instructions from the parties as to any apportionment. If the renter is applying without mutual consent, the RTBA will notify the RRP, who then has 14 days to notify the RTBA if they are disputing the claim. If not the bond will be automatically paid out. RRPs will still have to apply to VCAT if claiming from the bond without the renter's consent. This reform also applies to bonds in rooming houses, caravan parks and residential parks.
Currently, the parties to a residential rental agreement can mutually agree to the release of the bond at any time before the agreement has ended. A renter can also apply for their bond to be released seven days before the end of the agreement, subject to the RRP agreeing to the arrangement.
To help alleviate financial stress, and to better facilitate these private agreements between exiting renters and RRPs, renters will be able to seek agreement from their RRP up to a month before the end of the agreement for their bond to be released early. If the RRP agrees, the bond can be paid out as agreed up to 14 days before the end of the agreement, rather than the current period of 7 days. This reform also applies to bonds in rooming houses, caravan parks and residential parks.