Non-Compliance With Standards
The penalties for non-compliance to the new reforms are increasing as a result of substantial research that a large number of Victorian rental providers were not undertaking the recommended safety maintenance and were providing poor living conditions to renters.
‘Overall, 11 per cent of renters described their property condition as ‘poor’ or ‘very poor’ when they moved in, with low income renters (those in the bottom two income quartiles) more likely to report that their property was in ‘poor’ condition (11 per cent compared to 7 per cent overall)and less likely to report that it was in ‘excellent’ condition (22 per cent compared to 29 per cent overall)…
Feedback obtained as part of the Review, as well as knowledge gathered from Consumer Affairs Victoria’s (CAV’s) regulatory and compliance functions, identified that responsibilities for safety-related activities under a rental agreement was an area of concern, with anecdotal evidence of critical safety tasks not being done.’
Citation: Regulatory Impact Statement Residential Tenancies Regulations 2020
https://engage.vic.gov.au/rentingregulations
What happens if the rental providers does not provide these minimal requirements?
‘Rental providers who currently try to do the right thing by renters will not be affected by the changes. However, those who cut corners or who do not prioritise compliance with their obligations will find themselves facing increased monetary penalties and other punitive action.’ (engage.vic.gov.au)
Reform information relating to non-compliance
Reform 7. A new Rental Non-compliance Register for residential rental providers (RRPs) and agents will be established and maintained by the Director of Consumer Affairs Victoria.
This will enable renters to identify those who have previously breached their obligations under the Residential Tenancies Act. A listing for the RRP or the agent will be made if VCAT has made a compliance or compensation order in respect of a breach of duty under the Act, or if the RRP or agent has been convicted of an offence under the Act.
Reform 40. If a property does not comply with the prescribed rental minimum standards, the renter can terminate the residential rental agreement before they move in, or they can move in and request compliance as an urgent repair.
If the RRP fails to bring property up to standard following the urgent repair request, VCAT can order that the rent be redirected into the Rent Special Account.
Reform 59. To encourage residential rental providers to maintain their properties in good repair, renters will have increased access to the Rent Special Account.
The Rent Special Account is designed to hold rent payments that have been redirected when the RRP has not undertaken any necessary repairs. Upon application by the renter, VCAT will be required to order that rent be paid into the Rent Special Account instead of to the RRP, unless the RRP can prove that they would experience financial hardship if the rent was paid into the Rent Special Account.
If, despite having been ordered by VCAT to undertake repairs, the RRP still has not fulfilled their duty, the renter may now apply to have any rent held in the Rent Special Account repaid to them in full as compensation for the inconvenience of having to wait for repairs to be performed. This reform also applies to rental arrangements in rooming houses, caravan parks and residential parks, and responsibility for administering the Rent Special Account will be moved from VCAT to the RTBA.
https://engage.vic.gov.au/fairersaferhousing
https://www.consumer.vic.gov.au/housing
Publicly blacklisting agent and RRPs for non-compliance
A number of the reforms were announced as part of the Government’s ‘Rent Fair’ campaign in October 2017.
These included:
Establishing a non-compliance register ‘blacklisting’ residential rental providers and agents who fail to meet their obligations
https://engage.vic.gov.au/fairersaferhousing
Review this detailed document regarding the non-compliance register
‘A listing for the rental provider or their agent must be
made in the Register if VCAT has made a compliance or compensation order
against them in respect of a breach of duty under the Act, or if the rental
provider or agent has been convicted of an offence under the Residential Tenancies Act 1997.’
Information included in a listing
A listing must include the:
· rental provider’s name
· business name and address of the rental
provider’s agent (if they have an agent)
· address of the rented premises
· date of the order made by VCAT and the section
of the Act that the rental provider breached, or the date of conviction of an
offence under the Act and the section of the Act the rental provider was
convicted under, and
· any other information the Director decides is
relevant to the VCAT order, conviction or finding of guilt.
Previous requirements
A rental non-compliance register did not exist under the previous version of the Act.
Detailed reference guide 8: Rental provider non-compliance register (Word, 43KB)
439P Rental Non-compliance Register
(1) The Director must establish and maintain a register of registrable residential rental providers to be known as the Rental Non- compliance Register.
(2) The Director must enter in the Rental Non-compliance Register the information specified in subsection (3) in respect of a residential rental provider if—
(a) the Tribunal has made an order under Part 5 that the residential rental provider must—
(i) remedy a breach; or
(ii) pay compensation; or
(iii) refrain from committing a breach; or
(b) the residential rental provider has committed an offence under this Act.
(3) For the purposes of subsection (2), the information is—
(a) the name of the residential rental provider; and
(b) the address of the rented premises in respect of which the order was made or the offence was committed; and
(c) if the residential rental provider has an agent, the business name and business address of the agent; and
Residential Tenancies Amendment Act 2018
View Document by clinking here
What is considered a breach in relation to compliance:
Breach of Duty
Tenants, residents, landlords and
owners all have a responsibility to meet the terms of their rental agreement
and the Residential Tenancies Act 1997 (the Act).
If one party does not meet their
duties under the Act, the other may serve them with a breach of duty notice.
This is a formal warning to the party who is not meeting their obligations.
https://www.consumer.vic.gov.au/
Additional penalties for non-compliance
- Non-compliance fine
“65A Occupation of rented premises that do not
comply with rental minimum standards
(1) Without limiting sections 65, 68 and 70, a
residential rental provider must ensure that
rented premises comply with prescribed
rental minimum standards on or before the
day on which the renter enters into
occupation of the premises.
Penalty: 60 penalty units in the case of a
natural person;
300 penalty units in the case of a
body corporate.
Penalty: 60 penalty units ($165.22 x 60 = $9,913.20)
Reference:
Residential Tenancies Amendment Act 2018
View Document by clinking here
https://www.consumer.vic.gov.au/housing/renting/penalties
Renters may be serviced notice to vacate if they have tampered with a smoke alarm.
91ZI Damage
(1)A residential rental provider may give a renter a notice to vacate rented premises if the renter or the renter’s visitor, whether by act or omission intentionally or recklessly causes serious damage to the premises, including any safety equipment, or to any common areas. Example Safety equipment such as smoke alarms.
(2)The notice may specify a termination date that is the date on which the notice is given or a later date.
Reference: Residential Tenancies Amendment Act 2018
View Document by clinking here
Renters must inform rental provider of damage
A renter must report damage or the breakdown of facilities as soon as practicable after becoming aware to the rental provider. This report will be considered by VCAT in claims for compensation by the renter. If the renter receives an end of fixed term notice to vacate in response to such are port, it is of no effect.
Renters request urgent repair & can terminate agreement
If the rental property does not meet the minimum standards, the renter can end the rental agreement before they move in.
Renters can also request an urgent repair to make the rental property meet the minimum standards at any time after they move in.
https://www.consumer.vic.gov.au/
Detailed reference guide 26: Rental minimum standards - consumer affairs
If the rented property does not meet the rental minimum standards, the renter can issue a notice to terminate the rental agreement if the renter has not yet entered into possession of the property. Alternatively, the renter can occupy the property and issue a request to the rental provider for urgent repairs to be carried out to bring the property up to standard.
Failure to comply with the rental minimum standards is included in the definition of urgent repair, so a renter can request an urgent repair if a rental property falls out of compliance with the rental minimum standards at any time during the rental agreement.
Detailed reference guide 26: Rental minimum standards (Word, 43KB)
consumer.vic.gov.au/rentinglawchanges
Renters insurance defaults
Failure to meet your legal requirements as a residential rental provider increases your exposure to insurance defaults. For example, if you have not maintained your smoke alarms as per legislative requirements and there is fire, injury or death at your property, your insurance provider holds the right to refuse claims due to your failure to uphold your legislative requirements as an RRP.
Liability for utility charges for non-compliant energy efficient replacement appliances
A rental provider is liable for the cost of supplying water, gas or electricity to the rented premises for as long as the rental provider is in breach of their duty to replace a water, gas or electrical appliance with a replacement which has an equal or greater prescribed energy efficiency rating.
Citation:
Residential Tenancies Amendment Act Citation relating to non-compliance
(4) In section 3(1) of the Principal Act, in the
definition of urgent repairs—
…
(c) after paragraph (i) insert—
“(ia) a failure or breakdown of any cooling
appliance or cooling service provided
by a residential rental provider,
rooming house operator, caravan park
owner or caravan owner; or
(ib) a failure to comply with any rental
minimum standards; or
(ic) a failure or breakdown of any
safety-related devices, including
a smoke alarm or pool fence; or”;
Reference: Residential Tenancies Amendment Act 2018
View Document by clinking here
Residential Tenancies Amendment Act 2018
(4) After section 77(3) of the Principal Act insert—
“(4) A renter may apply to the Tribunal to order
that the whole or any part of the rent paid
into the Rent Special Account be paid to the
renter if—
(a) the Tribunal has made an order under
subsection (2) that rent be paid into the
Rent Special Account in respect of a
breach of section 68 or the rental
minimum standards; and
(b) the residential rental provider has not
effected any required repairs at the
rented premises by the end of the
period stated in that order.
“65A Occupation of rented premises that do not
comply with rental minimum standards
(1) Without limiting sections 65, 68 and 70, a
residential rental provider must ensure that
rented premises comply with prescribed
rental minimum standards on or before the
day on which the renter enters into
occupation of the premises.
Penalty: 60 penalty units in the case of a
natural person;
300 penalty units in the case of a
body corporate.
(2) If rented premises do not comply with the
rental minimum standards on or immediately
after the day on which the renter enters into
occupation of the premises, the renter may
issue a request to the residential rental
provider for urgent repairs to be carried out
to the premises to ensure that the premises
comply with the standards.
Note
This section is a duty provision and a contravention of this
section may be dealt with as a breach of a duty under Part 5
and other provisions of this Act.”
53 Section 66 amended
Residential Tenancies Amendment Act 2018
View Document by clinking here
Reference : https://www.sassau.com.au/new-legislation-non-compliance