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2019 marks major changes in the law for leasing. In particular, short-stay tenancies, such as those on Airbnb, will be subject to harsher rules and penalties and tenants in long-term leases will have more protection.

Short-Stay Tenancies

From 1 February 2019, the Victorian Civil and Administrative Tribunal’s (VCAT) powers will increase in relation to disruption caused by short-stay tenants.

What is a Short-Stay Tenancy?

A short-stay tenancy is a lease or licence for a maximum period of 6 nights in a building containing 2 or more sole-occupancy units, such as an apartment. The property must also be governed by an owners’ corporation.

Compensation and Fines

VCAT’s powers will now allow them to grant compensation of up to $2,000 where a neighbour has let out their premises to unruly short-stay tenants. However, compensation or other remedies, including a ban, will only be awarded where the short-term rental is repeatedly used for out of control parties or behaviour.

While compensation may be unattainable for some neighbours, the tribunal will have the power to order that the short-term tenant pay a fine of up to $1,100 for breaches that are less severe, including where the short-term tenant:

Makes unreasonable noise which disturbs a neighbour;
Causses damage to the property or common property (such as apartment lobbies or corridors);
Causes a substantial health, safety or security hazard; or
Obstructs a resident from using their property.

When making a decision, VCAT will consider the conduct of the parties, including the severity and nature of the breach. The member will also consider the conduct of the property owner and the steps they took to prevent the breach. This means that apartment owners may now consider conducting checks on potential tenants before granting a short-term tenancy.

Residential Tenancies

The Residential Tenancies Act 1997 (Vic) (the Act) sets out the rules for short-term residential leases. While it is a relatively old piece of legislation, it is being amended to keep up with the shift of power between landlords and tenants. The most recent change to the Act being that it will now apply to long-term leases.

What is a Long-Term Lease?

A long-term lease is a fixed term lease of more than 5 years, which will now have to be in writing and be in the new standard form tenancy agreement.  A failure to comply with these procedural requirements can lead to a fine of up to $1,611.90 for either a landlord or a tenant.

What are the Benefits now Afforded to Long-Term Leases?

The changes scheduled to commence in February and March 2019 will mean that long-term tenants will be governed by the Act on terms such as how rent is to be paid, damage, cleanliness of the property and repairs. A term in the lease purporting to exclude, restrict or modify a right under the Act will be deemed to be invalid.

Previous Changes

The previous changes agreed upon in 2018 are also to come into force starting in February 2019, including:

Tenants being able to have a pet at the property. While the landlord is required to consent, such consent cannot be unreasonably withheld;
Tenants being able to make minor modifications, such as installing picture hooks and furniture anchors, to the property without obtaining the landlord’s consent;
Requiring the landlord to undertake mandatory safety maintenance for gas, electricity, smoke alarms and pool fences;
Requiring every rental home to meet basic minimum standards. This includes having a functioning stove, heating and toilet.

If you need advice regarding your residential lease or the upcoming changes to the law, contact a member of our team today on (03) 9481 2000.

Posted by Taurus Legal Management