A rental property must be safe, secure, reasonably clean and reasonably fit to live in. That would be the least that most would expect, but it doesn’t end there. Legislation goes much deeper into the minimum standards of rental properties and landlords and agents must adhere to them…or they may end up in hot water.

So, what are minimum standards? Minimum standards are the least permissible condition required to demonstrate a basic level of performance; in the case of rental property, this refers to liveability. It is a level of quality that is thought to be acceptable as a minimum, and below which is unacceptable. Although a rental does not need to be ‘perfect’ it does need to be safe, secure and functional.

Minimum standards and insurance

Now you may be wondering why a landlord insurance provider is concerned about minimum standards. The reason is because it can impact cover.

Anyone managing a rental property is responsible for keeping it in a reasonable state of repair and ensuring it complies with building, health and safety laws. If a landlord or property manager fails to do so, it can mean a reduced payout or denial of an insurance claim.

For example, if there was a break-in, and a vandal damaged the walls and ceilings, the repairs may not be covered if it was found that there were not working locks on the doors (which is a minimum standard in many states).

Similarly, if a storm caused damage to the roof and it was found that the roof was not structurally sound (a minimum standard in a number of jurisdictions), the claim could be impacted.

Basically, to maintain cover under an insurance policy, the policyholder must act lawfully – if they don’t, there are likely to be serious ramifications for cover.

But before there can be issues with cover, insurance needs to be obtained in the first place. And securing cover might be difficult if the rental doesn’t meet minimum standards. In general, the condition of a premises can have an impact on whether an insurer will take on the risk and offer cover. The requirement to meet minimum standards may contribute to an insurers’ assessment of the property’s risk profile.

Ultimately, a rental property must be managed in line with state and national legislation. That means it is important to meet minimum standards to ensure both tenants and the property are safe. It also helps to maintain your insurance cover.

Click here for a breakdown of minimum standards in Victoria or scroll for the insights…

Victoria

Landlords must make sure a property meets minimum standards on or before the day a renter moves in. Minimum standards apply to rental agreements from 29 March 2021.

To meet minimum standards:

• External entry doors must have functioning deadlocks or be fitted with locks that can be unlocked with a key from the outside but can be unlocked without one from the inside.
• Landlords must supply a vermin proof rubbish and recycling bin for the tenant to use.
• A working toilet must be in a separate room in the property, either by itself, or in an appropriate room like a bathroom or in a combined bathroom-laundry. It must be connected to an approved sewage or wastewater system.
• A rental property’s bathroom must have a washbasin and a shower or bath, and be connected to a reasonable supply of hot and cold water.
• The property must have a dedicated cooking and food preparation area, a working sink and a working stovetop with two or more burners. If it has an oven, this must also work.
• If the property has a laundry, it must be connected to hot and cold water.
• The property must be structurally sound and weatherproof.
• The property must be free from mould caused by, or related to, the building structure.
• As of 29 March 2023, the rental property must have a modern electrical switchboard, with circuit breakers and electrical safety switches installed. Landlords are responsible for ensuring their rental property complies with the electrical safety standard by engaging a licensed or registered electrician.
• Windows in rooms likely to be used as bedrooms or living areas must be fitted with curtains or blinds that can be closed, block light and provide privacy.
• All external windows in a rental property that can be opened must be lockable. They must also be able to be left open or closed.
• Inside rooms, corridors and hallways must have access to light to make the areas functional. NOTE: These requirements do not apply if the property is registered under the Heritage Act 2017 and has an approved exemption from the standard.
• The property must meet the appropriate ventilation requirements of the Building Code of Australia, which are different for different kinds of properties. You can search for resources in the Australian Building Codes Board resources library.
• The property must have a fixed heater (not portable) in good working order in the main living area. As of 29 March 2023, the heater must also meet energy efficiency standards.

Source: RentCover