No-fault evictions out as Victoria reveals new rental reforms

The largest of the reforms is the state’s move to ban “no-fault” evictions, meaning that tenants cannot be asked to vacate a property without a valid reason. Much like a similar law that just passed NSW Parliament, the list of reasons to ask a tenant to vacate is expected to include issues like breaching the lease agreement, damage to the property, or for the owner to take up occupancy.

Victoria will also move to limit the fees that can be charged to a tenant for breaking the lease – through the financial parameters of those fees are yet to be determined.

The state said that while rental providers should certainly be entitled to some compensation for lost rent when a tenant choses to break a lease, this amount should be “fair and reasonable – not something that breaks the bank”.

The current proposal will apply to fixed-term rental agreements of five years or less, with a maximum of four weeks’ rent being able to be recouped by a landlord in the case of a lease break.

Moreover, other fees often charged to renters are also being targeted in this reform package. The government will also move to ban charges for rental payments, no matter the method the tenant uses to pay.

There is currently a fee-free option required under the law, but this move will see the state mandate that all payment methods – such a rent tech apps – allow renters to pay without being charged a service fee.

The new protections are set to extend to the pre- and post-lease process, with the state looking to ban the practice of prospective tenants being asked to pay to submit to a background check if they’re applying for a property, and also laying the groundwork to require more evidence from landlords who are making rental bond claims.

Furthermore, financial penalties for landlords found to be making “dubious bond claims” are set to be introduced under the reforms.

The changes will not take effect until the necessary legislation has been passed, which is expected to roll out in stages. The first priority, according to the state, will be introducing the ban on no-fault evictions, which is set to hit the state’s Parliament before the end of the year.