Does current rental legislation need a serious up-level to be future ready?

The life of a property manager is not easy! Your daily task list is a mile long and you are fielding constant queries from both tenants and landlords. There are new clients to onboard and a stream of requests and repairs to attend to.

When it comes to dealing with tenants, it can feel like a losing battle. Recent changes to tenancy laws in Victoria have fallen in the favour of renters, meaning there is a whole new raft of legislations to catch up with.

Effective as of 2018, these include:

  • Landlords only being able to increase rent every 12, rather than every 6 months

  • Properties must be advertised with a fixed price and landlords may not accept higher offers

  • Landlords will not be able to ‘unreasonably’ refuse a request to keep a pet on the premises, nor will they be able to refuse a request from tenants to make minor moderations, such as adding hooks to the walls

  • Rental bonds and repair reimbursements must be returned in a minimum of 7 instead of 14 days

Changes will also require landlords to give a specific reason for the termination of a lease, which has not been required in the past. Plus, landlords will be required to tell tenants of important information related to the property, including future plans to sell.

The Victorian government is also in the process of creating a landlord and agent ‘blacklist’. This publicly available resource will identify landlords or agents who have breached their responsibilities under the Residential Tenancies Act.

This makes sense when it comes to rooting out the bad apples rotting the whole barrel. However, why is there not a similar type of list being developed when it comes to bad tenants?

While the majority of renters are no problem, some can be total nightmares. Beyond not paying rent, they can cause damage and rack up huge repair bills for the property owners. These tenants can do a runner, leaving only bond money which is insufficient to cover costs.

There is little to stop bad tenants from coming up with false references and using them to apply for a new property. The process of nuisance and destruction is repeated and more people are left dealing with the fallout.

Renters may see landlords and agents as rich fat-cats who are profiting from their tenants. However, more often than not an investment property represents a great deal of hard work and a huge proportion of the investor’s assets.

Recent changes to lending laws means servicing investment loans is going to become more challenging. Combine this with upkeep, agency fees and insurance and for most landlords, the amount of money going into their pocket from an investment property is minimal.

If landlords can be officially blacklisted, does it not make sense for the same rules to apply to tenants? A more stringent screening and feedback program may serve to protect the nest eggs of mum and dad investors around the country.

Being able to identify bad tenants before they sign a lease would also make the role of a property manager a great deal easier.

BDH Solutions have been buying and selling rent rolls for over 30 years. Keep up with our latest listings here.