December 2, 2020

The real cost to property owners for non-compliance

New residential tenancy laws come into effect in early 2021. Residential rental providers who aren’t compliant face extensive consequences.

From functioning deadlocks on external doors to energy efficiency requirements, the changes required by the Residential Tenancies Amendment Act of 2018 will come into effect in 2021. 

There are more than 130 updates to the law being introduced. Investment property owners must comply with every one of them. 

According to Engage Victoria, “Those who cut corners or who do not prioritise compliance with their obligations will find themselves facing increased monetary penalties and other punitive action.” (

It is a lot of work to ensure compliance but failure to do so can result in the following:

  1. Financial penalties

The fine for non compliance with minimum standards can be close to $10,000.  

There are hefty penalties for the owners of rental properties who fail to take care of things like ensuring a property is free from mould or damp caused by building structure or even neglecting to provide each renter with a free set of keys or security device.

Property owners need to be certain their properties are compliant. This means they need to review and understand the legislation themselves, or they require the help of a property expert to review the legislation and implement all the necessary changes. 

  1. Public blacklisting

Owners and their managing agents can be blacklisted.

Failure to meet the new minimum standards  means rental providers (landlords) and their managing agents will be listed on an online register if:

• VCAT finds they have failed to meet certain obligations under the new legislation

• They are convicted of an offence under the RTA.

A ‘blacklisting’ can apply for three years. Details including the rental provider’s name, the address of the rented premises and the business name and address of the rental provider’s agent (if they have one) will be published on the Victorian Consumer Affairs website.. 

  1. Void insurance

Insurers hold the right to void insurance policies.

Rental properties are insured to protect both owners and renters. However, if poorly serviced or unsafe appliances are found to have caused injury or damage, insurance may be void. This could result in the property owner bearing the brunt of the resulting costs.

  1. Loss of rental payments + compensation to the Renter

Possible loss of income plus compensation payouts

Under reform 40, if a property does not comply with the prescribed rental minimum standards, the renter can terminate a residential rental agreement before they move in, or they can move in and request compliance as an urgent repair.

If the residential rental provider fails to bring property up to standard following the urgent repair request, VCAT can order the rental payment to be redirected into the Rent Special Account. The money can then be repaid to the renter as compensation. 

  1. Reputation damage

Potential long term setbacks

As mentioned by Engage Victoria, it is expected more people will be long term renters in the future. This is great news for those who have invested in a property portfolio. However, if word gets out you have failed to meet the standards set by the industry you do risk losing your existing renters and failing to secure quality long term renters moving forward. 

How to avoid the financial costs of non compliance

A compliance audit expert will help

Property owners are playing a long term game, investing in property to grow their wealth over time. If the property isn’t compliant, any financial gain can be eroded very quickly. 

To confirm your rental property is compliant with new regulations, the easiest thing to do is engage the services of a professional. This industry expert can conduct a compliance audit and share templates and checklists to ensure every box is ticked. 

A compliance audit expert will help protect your rental property assets against the financial costs of non compliance. Get in touch to find out more. 

Disclaimer: This article is for marketing purposes only and was correct at the time of publication. We endeavour to ensure all information is as current as possible. We strongly recommend you do your own research in regard to any details of the new legislation.