Planning ahead for a rental hot water failure after March 2027

From 1 March 2027, when a rental's hot water system permanently fails and can't be repaired, the rental provider must replace it with an energy-efficient electric hot water system. A failed gas system can't be replaced with another gas system. The Victorian Government's guidance for rental providers points to a heat pump water heater as the replacement.

A working unit can stay. The problem is timing. A hot water appliance that has stopped is on the urgent repairs list, and urgent repairs must be done immediately. If the first time you think about a heat pump is the morning the renter has no hot water, every decision gets made in a hurry.

First, the location. A heat pump needs fresh air, room for its cold exhaust to get away, a level base, a drain for condensation and access for servicing. It hums while it runs, so a spot under a bedroom window, the renter's or a neighbour's, isn't ideal. A wall-hung gas continuous-flow unit leaves no base, so a pad may be needed on the ground.

Second, the switchboard. A gas water heater has no circuit of its own, so a heat pump replacing it usually needs a new dedicated circuit, safety switch protection and an isolator. Energy Safe Victoria's guidance says every final sub-circuit in a home, hot water included, needs RCD protection. With panel-and-fuse or federal fuse boards, the whole board may need replacing, with circuit breaker protection on every circuit.

Third, the size. A heat pump stores hot water in a tank, so it has to cover the property's busiest stretch. A three-bedroom family home and a one-bedroom unit need very different tanks, and sizing for the likely household avoids complaints about running out.

For a gas unit that is clearly old, rusting at the base or has needed repairs, replacing it during a vacancy is often the calmer choice. Nobody is left without hot water, any switchboard work can have the power off for as long as it needs, and you choose the unit rather than taking whatever is available that day.

For a younger unit, prepare instead. Have an electrician confirm the board can take the circuit, do any board work at the next vacancy, and note the agreed spot and tank size on the property file. Some landlords have the circuit and isolator run to the future position ahead of time, so a failure becomes a straightforward changeover.

A hot water changeover involves several trades. A licensed gasfitter caps the gas to the old unit, and a licensed plumber removes it and connects the water to the new one. The circuit, isolator and any switchboard work are done by a licensed electrician, and the electrical side ends with a Certificate of Electrical Safety.

If the main switchboard has to be replaced, power can't go back on until a Licensed Electrical Inspector has inspected the work. That's another reason to do board work before the hot water fails, rather than on the same visit as an urgent changeover.

A short record makes the urgent call easier for your agent and whoever responds. It also shows, property by property, which units are oldest and where the money is likely to be needed first.

Review it with the heating at the same time. The heating rule works the same way: from 1 March 2027, a fixed heater that fails beyond repair must be replaced with efficient fixed electric heating, so one switchboard assessment can cover both.