Rushed legislation unattractive to landlords

New long-term residential tenancy legislation does not provide adequate protections for landlords and will place their investments at risk, the Real Estate Institute of Victoria has warned. 

REIV CEO Gil King said the Government has rushed the Residential Tenancies Amendment (Long-Term Tenancy Agreements) Bill 2017, failing to take into consideration the opinion of supply side stakeholders.

“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. In fact, four weeks’ bond is less than what is currently being obtained for many one-year leases in the Melbourne market.

“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.

“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.

“This rushed legislation will also negatively impact on tenants seeking stability, with a lack of incentives and protections unlikely to encourage landlords to offer long-term lease agreements.

“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. 

“There are many cases when a tenant is more than three months’ in arrears before VCAT will grant the landlord a possession order. A four week bond will leave landlords significantly out of pocket in these instances.”