Your Guide to Understanding the Latest Minimum Standards for Rental Properties
Here’s a quick guide to the new minimum standards, designed to provide you with a clear and concise overview of the key changes, essential requirements, important considerations, and the timelines you need to be aware of.
Cooling
Rental properties must provide an efficient, functional cooling system in the main living area to help ensure renters’ comfort, especially during warmer months.
What cooling system is required?
The standard calls for an energy-efficient fixed cooling system, such as an air conditioner or heat pump, to be installed in the main living area. If it is unreasonable to install an energy-efficient system (see “What makes installation unreasonable?” below), a standard fixed cooler in good working order must be installed instead.
What makes installation unreasonable?
Certain conditions can make the installation of an energy-efficient fixed cooler unreasonable:
- High Installation Cost: If the installation cost is significantly above average.
- Existing Cooling System: If there is already a fixed cooler in good working order in the main living area.
- Owners Corporation Rules: If installation is restricted by owners corporation rules.
- Legal Compliance Costs: If other legal or local requirements make the installation prohibitively expensive.
- Ducted Evaporative Cooler: If there is an existing ducted evaporative cooler in good working order in the main living area.
Are electrical upgrades included in installation costs?
No, the costs for electrical rectification work—such as upgrading a switchboard to accommodate additional load—are not included in the installation cost of a cooling system. This ensures that electrical compliance is addressed separately without affecting the cooling installation’s eligibility for meeting the standard.
When does this standard take effect?
For rental agreements or periodic agreements entered into between 30 October 2025 and 29 October 2027, rental providers must ensure that an energy-efficient fixed cooler is installed in the main living area. From 30 October 2027 onwards, all rental properties must meet this cooling standard unless installation is deemed unreasonable.
Ceiling Insulation
Rental properties must have adequate ceiling insulation to reduce heat loss in winter and keep the property cooler in summer, enhancing energy efficiency.
What are the specific insulation requirements?
Rental properties must have ceiling insulation that:
- Has a minimum R-value of 5.0 to ensure thermal efficiency.
- Is installed after a licensed electrician has completed a safety checklist for the ceiling space and any necessary rectifications to address electrical hazards have been completed.
- Complies with relevant Australian standards (AS/NZS 4859.1 for thermal insulation materials, AS1530.1 for combustibility, and AS/NZS1530.3 for ignitability and other safety aspects).
- Is installed by a qualified installer following AS3999 standards.
Where must insulation be installed?
Insulation must be installed in the entire ceiling area of the rental premises, with some exceptions:
- Areas that already contain insulation of any type or R-value.
- External areas such as garages, outbuildings, and alfresco spaces.
- Internal ceilings like those in multi-story or apartment buildings.
- Areas where installation would be unreasonable or unsafe.
What makes it unreasonable or unsafe to install?
Installation may be deemed unreasonable or unsafe in cases such as:
- High Installation Cost: If the installation cost is significantly higher than the average.
- Shared Roof Spaces: For example, if the roof cavity is managed by an owners corporation and is not entirely owned by the rental provider.
- Owners Corporation Restrictions: If installation is prohibited by owners corporation rules.
- Compliance Costs: If other legal or local laws make installation prohibitively expensive.
- Substantial Building Work Needed: If extensive work, like removing roofing material, is necessary to install the insulation (e.g., for skillion or very low-pitched roofs).
- Health and Safety Risks: If installation poses significant risks beyond typical insulation work.
- Heritage Properties: If the rental property is heritage-listed and a permit for modification is refused under the Heritage Act 2017.
When does this standard take effect?
Starting from 30 October 2025, all rental properties in Victoria must meet a minimum ceiling insulation standard to improve energy efficiency and comfort. The requirement applies to rental agreements entered into from this date onwards, including periodic agreements created on or after 30 October 2025.
Draughtproofing
Rental properties must be sealed against excessive drafts, ensuring all doors, windows, and vents are properly sealed to maintain energy efficiency and comfort.
What is required for general areas of the rental property?
The following draughtproofing measures are required in the rental property, excluding kitchen facilities (unless certain exceptions apply):
- External Doors: All external doors must be fitted with sealing or weather-stripping products that limit airflow around the entire door perimeter without hindering normal operation.
- Unsealed Wall Vents: Any unsealed wall vents must be covered with a non-shrinking, durable sealing material to close the vent.
- Gaps and Holes: Unreasonable gaps or holes around door and window frames, construction joints, skirting, floorboards, and any wall penetrations from services and appliances must be sealed using caulking or expandable sealing products.
- Installation: All sealing products must be installed according to the manufacturer’s instructions.
What is required for kitchen areas?
In kitchen areas, the following measures are required unless specific exceptions apply:
- External Doors: All external doors in the kitchen must be fitted with weather-stripping or sealing to restrict airflow without impairing door functionality.
- Unsealed Wall Vents: Similar to other areas, unsealed wall vents must be covered with robust, non-shrinking sealing material.
- Gaps and Holes: Any unreasonable gaps or holes around frames, construction joints, skirting, floorboards, and wall penetrations from services or appliances must be sealed with caulking or expandable products.
- Installation: As in other areas, all products must be fitted according to manufacturer instructions.
Are there exceptions to the draughtproofing requirements?
Yes, exceptions to the draughtproofing standard apply in the following cases:
For general areas:
- If a flueless space heater or open-flued gas appliance is installed.
- If the rental property is in a Class 2 building and owners corporation rules prohibit the installation of sealing or weather-stripping on external doors.
- If the property is a registered heritage place, and a permit for alterations has been denied under the Heritage Act 2017.
- If draughtproofing is deemed otherwise unreasonable.
For kitchen areas:
- If a flueless space heater or open-flued gas appliance is installed.
- If a flueless gas cooking appliance without a rangehood is installed in the kitchen.
- If the rental property is in a Class 2 building with owners corporation restrictions on draughtproofing.
- If the property is a registered heritage place with a denied permit for alterations under the Heritage Act 2017.
- If draughtproofing the kitchen area is otherwise unreasonable.
When does this standard take effect?
The draughtproofing requirement applies to all residential rental agreements entered into on or after 30 October 2025. This includes any periodic rental agreements created on or after this date.
Corded Internal Window Coverings
Rental properties must ensure that any corded internal window coverings are safe, with cords securely fastened to prevent hazardous loops that could pose a risk to tenants.
What are the requirements?
Corded internal window coverings must be installed to meet the following safety standards:
- Loose Cord Length: Any loose cord on the window covering must not form a loop of 220 mm or longer if the cord hangs lower than 1600 mm above the floor.
- Securing the Cord:
The cord must be secured with either:
- A Cord Guide: Installed at least 1600 mm above the floor unless:
- It stays firmly attached to the wall or other structure even when pulled with a force of 70 Newtons for 10 seconds.
- The cord is tightly secured or tensioned to prevent any loops of 220 mm or longer.
- A Cleat: Installed against a wall or structure at least 1600 mm above the floor.
How should the cord guide or cleat be installed?
- Safety Components: Install any specified components necessary to ensure the cord is secure and safe.
- Installation Instructions: Follow the manufacturer's instructions to make sure the cord cannot form a hazardous loop, as described in the standard above.
Water Heater
Rental properties must be equipped with an energy-efficient water heater that supplies hot water to the kitchen, bathroom, and laundry facilities.
What type of water heater is required?
An energy-efficient water heater that supplies hot water to the kitchen, laundry, and bathroom facilities must be installed unless it is unreasonable to do so.
When is it considered unreasonable to install?
It may be unreasonable to install an energy-efficient water heater in the following situations:
- Cost: The installation cost is significantly higher than the average installation cost for a similar Class 1 or Class 2 building.
- Existing Water Heater: The property already has a water heater in good working order.
- Owners Corporation Rules: Installation is prohibited by owners corporation rules.
- Legal or Local Restrictions: Compliance with other laws or local regulations makes installation costs prohibitive.
- Centralised System: The property’s hot water is supplied by a centralised system.
- Temporary Heater: A temporary water heater is installed and used for no more than 60 days.
Why Do These New Standards Matter?
Victoria’s rental properties have long faced challenges in meeting energy efficiency and safety expectations, which have a direct impact on renters. Recent data highlights that many rental homes fall short in areas that matter most:
- Energy Inefficiency: Over 85% of rental properties have the lowest thermal rating during hot weather, and 75% rank low during cold weather, meaning higher energy bills and greater discomfort for renters.
- Health and Wellbeing Risks: Inefficient appliances and poor thermal performance can lead to significant health risks. Renters often struggle with inadequate heating or cooling, leading to respiratory issues, cardiovascular strain, and even severe heat-related conditions. There are also negative effects on renters' mental health, productivity, and comfort, as they try to manage costs against living conditions.
- Environmental Concerns: With inefficient systems and appliances, these properties contribute to greenhouse gas emissions, which could be significantly reduced through more energy-conscious upgrades.
- Safety Hazards: Loose blind cords are a direct safety risk, leading to avoidable injuries and even fatalities. In recent years, blind cord-related accidents have led to hospitalisations and prompted calls for stricter safety standards.
These new standards represent a practical step forward in ensuring safe, comfortable, and efficient living conditions. By setting requirements for improved insulation, energy-efficient systems, draughtproofing, and blind cord safety anchors, Victoria is creating a better future for renters and bringing rental properties up to modern living standards.
Let Us Help You Navigate the Changes and Keep Your Properties Compliant
Schedule a consultation with our experts today for personalised guidance on the new minimum standards. We'll help you navigate the changes, provide clear steps for moving forward, and ensure your properties stay fully compliant.