They say that the devil is in the detail, and in the case of the latest “reforms” to rental laws in Victoria, they’re correct – plenty of rhetoric about making it fairer for renters but little real meat on the bones as to how they’re actually going to execute these changes or when.
The lack of supply of rental housing is very much a “Now” problem and this issue is not addressed in anything the government has included in this package. To avert this crisis deepening, there needs to be more done to bring more supply to the market now, not in 2 or more years’ time.
Government has acknowledged in the statement that Victoria has the strongest rights for renters in the country yet for some reason, they need to be even stronger; my view is this will only deter future investment in long-term housing, and short-stay owners I’ve spoken to have pretty much shrugged their shoulders at the new levy and look at it as just another tax but certainly not a reason to move out of the short-stay marketplace, even the Greens have acknowledged that.
What I see in this package so far is more disincentive for investors to retain their current properties, or to buy further properties to ease the shortages, and this is a very troubling aspect of the statement.
Overall there’s a lot of very fine talk in the housing statement which focuses on “protecting the renter”, it’s still very, very short on detail – my questions revolve around the necessity of some of these initiatives and just how they’re going to be supported with appropriate legislation and administration without creating more problems – but the big piece missing is that it’s all designed to support the consumption side and there’s nothing at all which benefits or encourages the supply side, and this is the immediate problem; most of these “reforms” will take at least 18 months to get up and running so we’re still kicking the can down the road and not dealing with the here and now.
I’ve already looked at the extensions for notices, so let’s examine the rest of this package and see how it holds up in the light, and you’ll have to excuse me if my cynicism shows…
The establishment of “Rental Dispute Resolution Victoria” – wait, what… Another dispute resolution body??
Is the government finally admitting that the current system is ineffective and inefficient in handling the number of disputes?
Both the property management sector and Tenants Victoria have been telling them this for the last few years – I’ve written blogs on exactly this twice in the last 2 years, and others have been even more vocal in their criticisms.
We already have a mechanism for resolving disputes (you might have heard of it, it’s been called VCAT for 25 years…) but apparently, it’ll be faster with the new body to get matters about bonds, rent, repairs, and damage sorted out and leave VCAT free for other “more serious matters”.
If you have a look at the last few annual reports, this is most of the VCAT case load! So the nett effect of a new body is that we just shift the burden from one broken system to another – I must be missing something here as I just can’t follow the logic.
There’s a huge number of bond and compensation claims still backlogged in the system, some of them go back to 2021, what happens to those – do they get transferred to this new service too, or are they left to languish inside a failing VCAT system?
The fact is that we’ve already got another body which we used during the pandemic to try to get the problems under control – the Dispute Settlement Centre of Victoria – so why is it that we suddenly need yet another service to do what 2 bodies are already established for, yet are clearly failing to deliver on??
How about instead of burning even more public funds in legislating for and establishing yet another administrative white elephant, the government applies some fiscal responsibility and uses this waste of taxpayer money to just fix the delays in VCAT by resourcing them adequately with people who actually interpret and apply the Act properly and evenly – it’d be a far, far less expensive way through the mess that they’ve ignored for the last few years.
Next, and I know I’ve written on this earlier, the prohibition on rental increases between successive fixed leases; there’s 2 things to observe here, one is the little matter that no landlord I know summarily evicts a tenant purely so that they can increase the rent. All they need to do is serve the notice of rent increase on the tenant already in the property, so this to me appears to be a nonsense provision, then there’s the enforcement aspects when we’ve already got CAV with an overwhelming workload, who exactly is going to bring the action? The former renter? Pretty unlikely.
Banning all forms of rental bidding – again there’s an enforcement aspect here but trying to legislate against a free market is restricting the market forces from applying – and I’ve already identified ways to circumvent this without giving it much thought at all so again I see flaws.
A Portable Bond Scheme – while the theory of this sounds good, the execution again raises questions with me.
Every property manager I know would face liability action from their landlord clients if they allowed a tenant into a property without the payment of a bond prior to being given possession, so I’m very interested to see the mechanics of this, particularly in the situation where there is a dispute around the retention of the former bond for things such as cleaning, damage or outstanding rent. If government really suggesting that every tenancy flows so smoothly that these matters are never at issue, because if they are, then they really don’t need the new dispute resolution service…
Maybe instead of a portable bond scheme government should institute a short-term loan scheme, they could fund it from the savings they’d make by resourcing VCAT or DSCV properly rather than establishing an entire new body for rental disputes. Then the risk for paying bonds would transfer to government rather than placing more landlords at risk of further loss.
Continuing Professional Development for Property Managers, OC Managers, Conveyancers – absolutely! Please!
This is something that industry has been advocating for for a very long time.
I still see Property Managers (although only a handful) who do not yet have a good grasp of the legislation or its application so a CPD program linked to a continuation of the licencing process would be a great step in improving the professionalism of the sector and the standard of service to all stakeholders.
Again though, more detail please…
Standardisation of rental applications and data protection – again a good move, there are a variety of online and manual rental applications and each asks for different information albeit slightly but completing them is a confusing process and some standardisation is much needed – again though, there is a lot more detail required here from government as these forms are provided through national services rather than being administered by individual agencies, as is the storage of personal information and data so much more work needs to be done before this can be implemented.
The Rental Stress support package; another great move in our current climate. While there are a vast number of organisations who can assist renters in rental stress, these can be difficult to access and a publicly funded service is going to ease the distress of a large number of renters who face trouble meeting their commitments under the lease, however means testing would be a key requirement for this to be successful and not go the way of some many other similar schemes.
As I said at the beginning of this article, none of these initiatives addresses the key problem we’re facing, that of supply. And none of these initiatives is effective without the right supporting framework so they’re at least 18 months away – the supply problem is here, now.