With the introduction of electrical safety checks in Victoria in recent years, without a doubt, one of the biggest issues investors have faced in our local areas is the upgrading of switchboards.
The latest requirement involves a migration to use modern-style electrical switchboards, which have circuit breakers and electrical safety switches included. Electrical safety switches are correctly known as residual current devices (RCD, RCCB, or RCBO).
This initiative is all about safety and preventing potential electrical fires and Rental providers are responsible for ensuring their rental property complies with the electrical safety standard by engaging a licensed or registered electrician.
A recent report stated that one in five rental properties in Victoria was not up to electrical switchboard standards when the new legislation was announced, leading to thousands of Rental Providers spending millions of dollars to upgrade their investment properties.
If your rented premises has a circuit breaker type switchboard
The rented premises can meet the new minimum standard if the electrician adds circuit breaker components to the power outlets and lighting circuits, without the need to add to or modify the circuit protection to other circuits (such as fixed cooking equipment, hot water units, or air-conditioning circuits).
The circuit breaker components include:
• an overcurrent circuit breaker and a residual current device (RCDs), or
• an overcurrent circuit breaker and residual current operated circuit-breakers without integral overcurrent protection (RCCBs), or
• a residual current operated circuit-breaker with integral overcurrent protection (RCBOs).
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If your rented premises does not have a circuit breaker type switchboard
Some properties do not have circuit breaker-type switchboards, such as older properties that have a panel and fuse board or a federal fuse board.
With these older type of fuse boards, an electrician may not have the option of adding circuit breaker components (such as RCDs, RCCBs or RCBOs) and may have to replace the entire switchboard to ensure the rented premises meets the electrical safety standard. In this case, circuit breaker components will be required for all the circuits at the switchboard, including fixed cooking equipment, hot water units, and air-conditioning circuits.
Penalties for Non-Compliance
If a rental property does not meet the minimum standard, the renter has the right to end their lease agreement before they move in. If they are already in the home and the switchboard is outdated, they can request an urgent repair, which must be done immediately.
While there isn’t a body responsible for auditing rental properties, renters can apply to VCAT if nobody responds to the request for repair, which will bring the home to the attention of authorising bodies.
The formal consequences of not being compliant with the new residential tenancy legislation include:
- Being named and shamed on a public register/rental provider database, which lists providers who have breached their duty under the Residential Tenancies Act 1997
- Monetary fines.
If a rental provider does not adhere to the above conditions, they may incur penalty units issued by Consumer Affairs Victoria for breaching the Residential Tenancies Act (RTA). The current cost is $184.92 per penalty unit. The sections which relate to the above conditions, Section 30D and Section 35, carry potential penalties of 60 and 25 penalty units respectively. This means if a landlord is in breach of both sections the total possible fine is $15,718.20.
Extra Work For Property Managers
The updated rental tenancy legislations which have been gradually introduced since early 2021 have put property managers and rental property providers under a lot of pressure.
For investors, there has been no choice but to put money towards upgrades on things like security locks, heaters, and now electrical switchboards.
Over the past two or three years, property managers have faced the additional workload of keeping their investor clients informed, working with renters to gain access to properties so upgrades can be made, and finding providers to get the work done. This has added to their costs as well as their to-do lists.
Property managers now face the decision of dropping non-compliant properties from their rent roll, even if it means losing revenue. If rental property owners are not willing to comply, they will find it more and more difficult to find an agent that will be willing to take on the risk of managing non-compliant premises.
If you have any questions regarding safety compliance at your rental property, please contact the Neilson Partners Property Management team who will be more than happy to assist.
