Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018

Authorised by the Chief Parliamentary Counsel Authorised Version i Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 TABLE OF PROVISIONS Section Page Part 1—Preliminary 1 1 Purpose 1 2 Commencement 2 3 Principal Act 2 Part 2—Amendments relating to tenancy agreements 3 4 Definitions 3 5 Section 6 repealed 3 6 Tenancy agreements to be in standard form 3 7 New section 26A inserted 5 8 Section 27 substituted and new section 27A inserted 5 9 Not more than 1 bond is payable in respect of continuous occupation 7 10 New sections 34A and 34B inserted 7 11 Power to enter tenancy agreements or other agreements 10 12 Regulations 10 Part 3—Amendments relating to compensation and compliance 11 13 New section 209AA inserted 11 14 Orders of Tribunal 11 Part 4—Amendments relating to termination 12 15 Creation of periodic tenancy 12 16 New section 237A inserted 13 17 End of fixed term tenancy 13 18 Notice to vacate for no specified reason 14 Part 5—Repeal of amending Act 15 19 Repeal of amending Act 15 ═════════════ Endnotes 16 1 General information 16 -- 1 of 17 -- Authorised by the Chief Parliamentary Counsel Authorised Version 1 Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018† No. 40 of 2018 [Assented to 28 August 2018] The Parliament of Victoria enacts: Part 1—Preliminary 1 Purpose The purpose of this Act is to amend the Residential Tenancies Act 1997 to provide for tenancy agreements for a fixed term of more than 5 years and to make consequential amendments. Victoria -- 2 of 17 -- Part 1—Preliminary Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 2 Authorised by the Chief Parliamentary Counsel 2 Commencement (1) Subject to subsection (2), this Act comes into operation on a day or days to be proclaimed. (2) If a provision of this Act does not come into operation before 1 February 2019, it comes into operation on that day. 3 Principal Act In this Act, the Residential Tenancies Act 1997 is called the Principal Act. -- 3 of 17 -- Part 2—Amendments relating to tenancy agreements Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 3 Authorised by the Chief Parliamentary Counsel Part 2—Amendments relating to tenancy agreements 4 Definitions (1) In section 3(1) of the Principal Act insert the following definition— "standard form tenancy agreement means— (a) in relation to a tenancy agreement for a fixed term not exceeding 5 years, the standard form prescribed for the purposes of section 26(1); (b) in relation to a tenancy agreement for a fixed term of more than 5 years, the standard form prescribed for the purposes of section 26(1A)(b)(ii);". (2) In section 3(1) of the Principal Act, in the definition of fixed term tenancy agreement, after "fixed term" insert "including, in the case of a fixed term tenancy agreement for more than 5 years, any extension of that tenancy agreement exercised in accordance with a term permitting the extension of that tenancy at the end of the fixed term". 5 Section 6 repealed Section 6 of the Principal Act is repealed. 6 Tenancy agreements to be in standard form (1) For section 26(1) of the Principal Act substitute— "(1) If a tenancy agreement for a fixed term not exceeding 5 years is in writing, it must be in the standard form tenancy agreement for a fixed term not exceeding 5 years.". -- 4 of 17 -- Part 2—Amendments relating to tenancy agreements Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 4 Authorised by the Chief Parliamentary Counsel (2) After section 26(1) of the Principal Act insert— "(1A) A tenancy agreement for a fixed term of more than 5 years— (a) must be in writing; and (b) must be— (i) in the standard form tenancy agreement for a tenancy agreement for a fixed term not exceeding 5 years; or (ii) in the standard form tenancy agreement for a tenancy agreement for a fixed term of more than 5 years.". (3) In section 26(2) of the Principal Act, after "tenancy agreement" insert "for a fixed term not exceeding 5 years". (4) After section 26(2) of the Principal Act insert— "(2A) A landlord or tenant must not prepare or authorise the preparation of a tenancy agreement for a fixed term of more than 5 years if the agreement is not either— (a) in the standard form tenancy agreement for a tenancy agreement for a fixed term not exceeding 5 years; or (b) in the standard form tenancy agreement for a tenancy agreement for a fixed term of more than 5 years. Penalty: 10 penalty units.". -- 5 of 17 -- Part 2—Amendments relating to tenancy agreements Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 5 Authorised by the Chief Parliamentary Counsel 7 New section 26A inserted After section 26 of the Principal Act insert— "26A Offence to include prescribed prohibited term in tenancy agreement for fixed term of more than 5 years (1) A landlord or tenant must not prepare or authorise the preparation of a tenancy agreement for a fixed term of more than 5 years that contains a prescribed prohibited term. Penalty: 10 penalty units. (2) If a tenancy agreement for a fixed term of more than 5 years contains a prescribed prohibited term, that term is void and unenforceable.". 8 Section 27 substituted and new section 27A inserted For section 27 of the Principal Act substitute— "27 Invalid terms (1) Subject to subsection (3), a term of a tenancy agreement is invalid if it purports to exclude, restrict or modify or purports to have the effect of excluding, restricting or modifying— (a) the application to that tenancy agreement of all or any of the provisions of this Act; or (b) the exercise of a right conferred by this Act. (2) A term referred to in subsection (1) includes a term that is not set out in the tenancy agreement but is incorporated in it by another term of the tenancy agreement. -- 6 of 17 -- Part 2—Amendments relating to tenancy agreements Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 6 Authorised by the Chief Parliamentary Counsel (3) Subsection (1) does not apply to a term of a standard form tenancy agreement for a fixed term of more than 5 years that is inconsistent with, or varies the requirements of, this Part. (4) A provision in a written tenancy agreement or any other agreement that requires a party to a written tenancy agreement to bear any fees, costs or charges incurred by the other party in connection with the preparation of the tenancy agreement is invalid. 27A Additional term in fixed term tenancy agreement for more than 5 years (1) Subject to subsection (2), a tenancy agreement for a fixed term of more than 5 years may include a term agreed to by the parties to the agreement that is additional to the terms contained in the standard form tenancy agreement for that agreement. (2) A person must not include an additional term in a tenancy agreement for a fixed term of more than 5 years if the additional term— (a) excludes, restricts or modifies a provision of the standard form tenancy agreement for that agreement; or (b) purports to exclude, restrict or modify a provision of the standard form tenancy agreement for that agreement. Penalty: 10 penalty units.". -- 7 of 17 -- Part 2—Amendments relating to tenancy agreements Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 7 Authorised by the Chief Parliamentary Counsel 9 Not more than 1 bond is payable in respect of continuous occupation At the foot of section 34 of the Principal Act insert— "(2) Subsection (1) does not apply to a tenancy agreement for a fixed term of more than 5 years in the standard form tenancy agreement referred to in section 26(1A)(b)(ii).". 10 New sections 34A and 34B inserted After section 34 of the Principal Act insert— "34A Additional amount of bond proportionate with rent increase (1) This section applies to a tenancy agreement for a fixed term of more than 5 years in the standard form tenancy agreement referred to in section 26(1A)(b)(ii). (2) The landlord may require the tenant to pay an additional amount of bond, if— (a) the landlord has given 120 days written notice in a form approved by the Director to the tenant requiring an additional payment of bond; and (b) the additional payment of bond is required by the landlord after the expiry of a period of 5 years of continuous occupation by the tenant; and (c) the fixed term of the tenancy agreement— (i) is extended by a period of at least 5 years from the expiry of the first fixed term; or (ii) has an unexpired period of 5 years or more; or -- 8 of 17 -- Part 2—Amendments relating to tenancy agreements Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 8 Authorised by the Chief Parliamentary Counsel (iii) commences after a periodic tenancy; or (iv) commences after the expiry of a fixed term tenancy agreement, whether in the form prescribed for the purposes of section 26(1) or 26(1A)(b)(ii). (3) An additional amount of bond under subsection (2) is an amount determined by— (a) calculating a total amount of bond for the next 5 year period of the tenancy agreement by using the rent payable at the commencement of the next 5 year period of the tenancy agreement as a basis for that bond's calculation; and (b) subtracting the total amount of bond currently lodged with the Authority from the total amount of bond calculated under paragraph (a). Example For the first 5 year period of a tenancy agreement, the rent payable is $400 per week. The bond is 4 weeks rent, or $1600. For the next 5 year period of the tenancy agreement, occurring immediately after the first period, the rent payable is increased to $520 per week. The bond amount calculated by 4 weeks rent at the new amount of rent payable ($520 per week) is $2080. If a term referred to in this section is included in the tenancy agreement, the landlord would be permitted to require the tenant to pay an additional amount of bond for $480. This amount is proportionate to the increase in rent payable under the tenancy agreement. (4) The additional amount of bond referred to in subsection (3) must be paid by the tenant on or before the end of the period of notice referred to in subsection (2)(a). -- 9 of 17 -- Part 2—Amendments relating to tenancy agreements Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 9 Authorised by the Chief Parliamentary Counsel (5) The landlord must not require an additional amount of bond more than once in any 5 year period of a tenancy agreement to which this section applies. 34B Tenant may apply to VCAT to vary additional amount of bond (1) If a landlord requires an additional amount of bond under section 34A, the tenant may apply to VCAT— (a) to vary any term in the tenancy agreement that permits the landlord to require an additional amount of bond; or (b) to vary the amount of additional amount of bond to be paid. (2) VCAT may make any order that VCAT considers appropriate if satisfied that not making an order would result in severe hardship for the tenant. (3) In making an order under subsection (2), VCAT is to have regard to— (a) whether the landlord or tenant are otherwise in breach of any term of the tenancy agreement or this Act; and (b) the financial circumstances of the tenant and the landlord; and (c) the condition of the rented premises; and (d) any other matter VCAT considers to be relevant to the making of the order.". -- 10 of 17 -- Part 2—Amendments relating to tenancy agreements Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 10 Authorised by the Chief Parliamentary Counsel 11 Power to enter tenancy agreements or other agreements (1) In section 94(1) of the Principal Act, after "tenancy agreement" insert "for a fixed term not exceeding 5 years". (2) After section 94(3A) of the Principal Act insert— "(3B) A rooming house owner and a resident cannot enter into a tenancy agreement for a fixed term of more than 5 years.". 12 Regulations (1) In section 511(1)(f) of the Principal Act, after "tenancy agreement" insert "for a fixed term not exceeding 5 years". (2) After section 511(1)(f) of the Principal Act insert— "(faa) prescribing standard form tenancy agreements for tenancy agreements, or classes of tenancy agreements, for a fixed term of more than 5 years, including but not limited to the following— (i) prescribing terms which may be inconsistent with, or vary the requirements of, Part 2 (other than Division 2 of that Part); (ii) prescribing, in relation to tenancy agreements for a fixed term of more than 5 years, alternative terms which may be included in the standard form tenancy agreement or other form of tenancy agreement, or classes of tenancy agreement; (faab) prescribing prohibited terms for tenancy agreements, or classes of tenancy agreements, for a fixed term of more than 5 years;". -- 11 of 17 -- Part 3—Amendments relating to compensation and compliance Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 11 Authorised by the Chief Parliamentary Counsel Part 3—Amendments relating to compensation and compliance 13 New section 209AA inserted After section 209 of the Principal Act insert— "209AA Application for compensation or compliance order for breach of prescribed term in standard form tenancy agreement (1) Subject to subsection (2), if a party to a fixed term tenancy agreement for more than 5 years has breached a term of the tenancy agreement, the other party may apply to the Tribunal for a compensation order or a compliance order. (2) Subsection (1) does not apply to an additional term in a fixed term tenancy agreement for more than 5 years that is included in the tenancy agreement under section 27A(1).". 14 Orders of Tribunal After section 212(1) of the Principal Act insert— "(1A) In the case of an application under section 209AA, if the Tribunal is satisfied that the term of the tenancy agreement was breached the Tribunal may make any or all of the following orders— (a) the party in breach must remedy the breach as specified in the order; (b) the party in breach must pay compensation as specified in the order; (c) the party in breach must refrain from committing a similar breach.". -- 12 of 17 -- Part 4—Amendments relating to termination Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 12 Authorised by the Chief Parliamentary Counsel Part 4—Amendments relating to termination 15 Creation of periodic tenancy (1) For section 230(1)(b) of the Principal Act substitute— "(b) the tenant under that agreement continues in occupation of the rented premises— (i) otherwise than as a tenant under a fixed term tenancy agreement; or (ii) in the case of a fixed term tenancy agreement for more than 5 years, otherwise than in accordance with a term in the agreement permitting the extension of the term of that tenancy at the end of the fixed term.". (2) In section 230(3) of the Principal Act, after "subsection (2)," insert "in the case of a tenancy agreement for a fixed term not exceeding 5 years,". (3) After section 230(3) of the Principal Act insert— "(3A) Except as provided in subsection (2), in the case of a tenancy agreement for a fixed term of more than 5 years, the periodic tenancy agreement is on the same terms, so far as applicable, as the terms of a standard form tenancy agreement for a fixed term not exceeding 5 years.". -- 13 of 17 -- Part 4—Amendments relating to termination Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 13 Authorised by the Chief Parliamentary Counsel 16 New section 237A inserted After section 237 of the Principal Act insert— "237A Tenancy agreement for a fixed term of more than 5 years does not comply with standard form (1) This section applies if a tenancy agreement for a fixed term of more than 5 years does not comply with section 26(1A). (2) Despite any term of the tenancy agreement to the contrary, the tenant may give the landlord a notice of intention to vacate the rented premises. (3) The notice under subsection (2) must specify a termination date that is not less than 28 days after the date on which the notice is given.". 17 End of fixed term tenancy For section 261(3) of the Principal Act substitute— "(3) The notice must be given— (a) in the case of a fixed term tenancy agreement for more than 5 years, not less than— (i) the prescribed period before the end of the fixed term; or (ii) if no period has been prescribed under paragraph (i), 90 days before the end of the fixed term; or (b) in the case of a fixed term tenancy agreement for 6 months or more (but not exceeding 5 years), not less than 90 days before the end of the fixed term; or -- 14 of 17 -- Part 4—Amendments relating to termination Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 14 Authorised by the Chief Parliamentary Counsel (c) in the case of a fixed term tenancy agreement for less than 6 months, not less than 60 days before the end of the fixed term.". 18 Notice to vacate for no specified reason For section 263(2) of the Principal Act substitute— "(2) The notice must specify a termination date that is— (a) in the case of a tenancy agreement for a fixed term of more than 5 years, not less than— (i) the prescribed period; or (ii) if no period is prescribed under subparagraph (i), 120 days after the date on which the notice is given; or (b) in the case of a periodic tenancy agreement referred to in section 230(3A), not less than— (i) the prescribed period; or (ii) if no period is prescribed under subparagraph (i), 120 days after the date on which the notice is given; or (c) for any other tenancy agreement, not less than 120 days after the date on which the notice is given.". -- 15 of 17 -- Part 5—Repeal of amending Act Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 15 Authorised by the Chief Parliamentary Counsel Part 5—Repeal of amending Act 19 Repeal of amending Act This Act is repealed on 1 February 2020. Note The repeal of this Act does not affect the continuing operation of the amendments made by it (see section 15(1) of the Interpretation of Legislation Act 1984). ═════════════ -- 16 of 17 -- Endnotes Residential Tenancies Amendment (Long-term Tenancy Agreements) Act 2018 No. 40 of 2018 16 Authorised by the Chief Parliamentary Counsel Endnotes 1 General information See www.legislation.vic.gov.au for Victorian Bills, Acts and current authorised versions of legislation and up-to-date legislative information. † Minister's second reading speech— Legislative Assembly: 23 August 2017 Legislative Council: 7 September 2017 The long title for the Bill for this Act was "A Bill for an Act to amend the Residential Tenancies Act 1997 to provide for tenancy agreements for a fixed term of more than 5 years, to make consequential amendments and for other purposes." -- 17 of 17 --