Family of four moving into house carrying boxes

Faster payments & rental bonds

It can be financially stressful for tenants moving between houses if they have to wait to get their bond back. It can be particularly hard for tenants to pay their new bond prior to the release of their existing bond.

Reforms

14 day automatic bond repayment

Under this reform, either party will be able to apply to the Residential Tenancies Bond Authority (RTBA) at the end of the tenancy to have all or part of the bond released either with or without the other party’s consent.

If both parties agree, the RTBA will pay out the bond in full or in accordance with instructions from the parties as to any apportionment within 14 days.

If either party has not consented to the bond being paid out, the RTBA will notify that other party, which then has 14 days to notify the RTBA if they are disputing the claim. If not the bond will be automatically paid out.

This reform will mean that, in practice, tenants will lodge their bond form and if the landlord does not dispute the bond within 14 days, the tenant will be paid out by the RTBA.

Early release of bond

Currently, the parties to a tenancy can mutually agree to the release of the bond before a tenancy has ended and tenant can apply for the release of the bond seven days before the end of the tenancy.

To help alleviate financial stress, and to better facilitate these private agreements between exiting tenants and landlords, we will amend existing provisions in the RTA governing the return of the bond where a tenancy has not yet ended.

Tenants can seek agreement from their landlord for their bond to be released up to a month before the end of the tenancy, and the bond can be paid out as agreed up to 14 days before the end of the tenancy, rather than 7 days.

Updated bond cap & up-front rent cap for most properties

Current arrangements for the cap on maximum bonds and up-front rent are outdated and apply to less than half of all rental properties in Victoria. This means that many tenants are exposed to paying more than one month’s bond and rent in advance.

The reforms prevent bonds of more than one month’s rent for any property where rent is less than double the median weekly rent, except where the landlord has obtained an exemption.

Upfront rent will also be limited to one month’s rent for these properties.

By linking reforms to the median weekly rent – which is currently $380 - the cap on bonds and up-front rent will cover the vast majority of rental properties in Victoria into the future.

Only landlords who have obtained an exemption from VCAT will be able to require a bond of more than one month if the weekly rent is below double the median rent.

These reforms are needed to improve the affordability of the upfront costs of renting, while still allowing landlords to protect truly high-value properties.

Faster repairs reimbursement

The one of the most frequent concerns expressed by tenants requesting a repair was that urgent repairs take too long to resolve. Some repairs require immediate attention and it may not be reasonable for a tenant to wait until the landlord can resolve it.

Tenants who have paid for urgent repairs up to the authorised limit will be able to seek reimbursement from the landlord for the reasonable costs of repair within 7 days, instead of 14 days.

This will reduce the amount of time tenants are out of pocket for urgent repairs that the landlord should have covered.

A failure by the landlord to reimburse the tenant will entitle the tenant to seek a compensation order from VCAT. A breach of a compliance order would expose the landlord to being ‘blacklisted’.

The reforms require amendments to Residential Tenancies Act 1997. The process to amend the RTA is underway.