In a recent article for Your Investment Property magazine, Anne Crarey, Little Real Estate's Executive General Manager - Property Service, discussed the new rental standards introduced in Victoria. While these updates aim to improve living conditions for tenants, many property owners are understandably concerned about the costs involved. According to Victoria’s Energy Minister, upgrading a rental property to meet all the new standards could cost around $5,000 if done in one go.

Although full details of the new regulations are still being clarified, here’s a breakdown of what landlords need to know:

Insulation Requirements

Rental properties must have proper ceiling insulation and draught-proofing, such as weather seals on external doors. There’s still uncertainty about how these requirements will be applied to apartments.

Energy Efficiency Upgrades

One of the key changes focuses on energy efficiency. Landlords must replace old hot water and heating systems with energy-efficient electric appliances when they reach the end of their life. In addition, properties must have air conditioning systems with a minimum 3-star cooling rating in the main living area. Other requirements include the installation of blind cord anchors and 4-star water-efficient showerheads.

Landlords are expected to make these upgrades either at the start of a new lease or when appliances need replacing. To ease the financial burden, the Victorian Energy Upgrades (VEU) program offers incentives to replace outdated gas appliances with more efficient electric alternatives.

Act Now to Avoid Penalties

With penalties starting in October 2025, landlords are encouraged to begin making the necessary upgrades as soon as possible. However, many Victorian property investors remain unaware of their obligations, including those from the previous rental reforms introduced in 2021. These earlier changes sought to improve basic living conditions in rental properties, and non-compliance can lead to significant fines—up to $57,000 for companies and $11,000 for individuals.

Key Requirements for Landlords

Anne outlines several key areas landlords should focus on to ensure their properties comply with the new standards before being brought to market:

1. Energy-Efficient Heating: Properties must have a fixed, energy-efficient heater in the main living area, supporting both cost savings for tenants and environmental sustainability.
2. Mould and Damp Prevention: Rental properties must be free from mould and damp caused by structural issues. Addressing these problems early not only meets legal requirements but also lowers future maintenance costs.
3. Ventilation: Adequate airflow is required in all habitable rooms, including bathrooms and laundries. Installing exhaust fans in wet areas will help prevent moisture buildup and improve overall tenant comfort.
4. Window Security and Privacy: Bedrooms and living rooms must have curtains or blinds for privacy, while external windows need functioning latches for added security.
5. Secure Entry Doors: All external doors must have functioning deadlocks or locks that can be unlocked from the inside without a key, ensuring both safety and security for tenants.
6. Bathroom and Kitchen Compliance: Bathrooms should have a washbasin, while showers need to be fitted with water-efficient showerheads. Kitchens must have at least a stove with two burners, and both rooms must have access to hot and cold water.
7. Structural Integrity: Properties must be structurally sound and weatherproof, ensuring tenant safety and long-term durability.
8. Toilets: Fully functional toilets are a must to avoid common tenant complaints.
9. Waste Management: Landlords are responsible for providing both rubbish and recycling bins to ensure tenants can easily manage their waste.

By addressing these areas early, landlords can not only avoid penalties but also enhance the value and appeal of their rental properties.

Read the full article here.