Tenant selection processes in the spotlight as tenancy laws are tightened


The start of the year is always a time of both opportunity and challenge in Melbourne’s residential letting scene. But 2018 will be different because the Andrews government has unveiled a raft of proposed changes to tenancy laws.

The summer months are usually a crunch period for property investors with tenanted properties because large numbers of tenants vacate their homes, which can push out vacancy rates and give some tenants greater negotiating power in setting rents.

Fortunately, any imbalance is offset by the traditional spike in people looking for new rental accommodation in January, February and March.

Finding reliable and quality tenants is always a top-of-mind issue. But under the proposed new state legislation and tenancy laws, due to come into force in 2018, landlords could face a more challenging legal landscape in dealing with tenants and it’s all but certain to make the use of arms-length professional property management services more crucial than ever.

The legal changes follow a lengthy review of the Residential Tenancies Act. It is proposed that landlords be restricted to increasing rent once every year instead of every six months.

Landlords will also need to give a reason to end a tenancy. The government proposes scrapping the 120-day “no specified reason” notice to vacate, and intends to make it no longer possible to unreasonably refuse a tenant’s request to keep pets or make minor modifications, such as installing air-conditioning or picture hooks.

The laws around pets in rental properties are changing.

Grant Gifford, the head of Nelson Alexander’s property management operations in Fitzroy and Carlton, says the company’s property managers are fully up to speed with the proposed new laws and are well able to assist landlords to understand their obligations.

He says the tenancy law overhaul includes a number of fair and reasonable initiatives, such as a proposal to shorten the length of time for tenants to be refunded when they are compelled to use their own money to pay for urgent repairs.

“There is a bit of good and bad in the proposed new laws for both landlords and tenants,” Mr Gifford says

“More than one in four Victorians now rent a home and they expect to be treated respectfully and professionally by an agent who knows all the ins and outs of tenancy law.

As the rental supply frees up, selecting the right tenant becomes more critical and difficult.

Landlords who elect to use a professional real estate agency to rent and manage their house or apartment almost always have a better opportunity to attract quality tenants and the best financial returns

“Because Nelson Alexander manages more than 15,000 properties in Melbourne, we are able to assist tenants who need to move out of one property and into another,” Mr Gifford notes. “This has big advantages for our landlord partners: the vacancy period for a property is potentially considerably less because you don’t need to go out into the wider market and look for tenant off the street.”

Nelson Alexander property managers are vigilant about keeping up to date with market rents. They continually review rents and tenancies on all rental properties as part of the service they provide to landlords.

Managers also conduct regular and routine inspections every six months of the properties under their care.

The company will not enter into a tenancy agreement with anyone who doesn’t meet Nelson Alexander’s stringent criteria and always selects a tenant in consultation with each landlord.

Between December and February, people tend to move interstate or across the city to start new jobs. University and other higher-education students are also on the hunt for accommodation at this time of the year, while families who rent often pull up stumps and shift house to be close to schools and work locations.

As the rental supply frees up, selecting the right tenant becomes more critical and difficult.

If you would like to discuss your real estate needs on a no-obligation basis, please contact any Nelson Alexander office.

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