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NSW tenancy law changes – what they mean for you

  • September 26, 2018

Tenancy laws are a hot topic, with more than one-third of NSW residents renting. A new bill before parliament looks set to reform current tenancy legislation in NSW, in what is said to be the biggest shake-up of rental laws in more than two decades.

The reforms have been described by the government as ‘common-sense changes’, but both owners and tenants are voicing concerns about whether they’ve gone too far or not far enough.

The bill is still being debated, so nothing has changed yet but it’s important to be aware of potential upcoming changes. In general, we think that the changes are fair and appropriately balance tenant and landlord interests. Landlords will not be forced to accept pets, and will still have the power of “no grounds” evictions.

However, the changes to lease end notice periods are heavily in favour of tenants and will require much more advance planning.

Here’s our quick round-up of the reforms to help you understand your new rights and responsibilities as a property owner.

Why is the law changing?

In 2016, the Department of Fair Trading made a raft of recommendations to reform the Residential Tenancies Act 2010 to strike a better balance between the interests of tenants and landlords. After two years of review and consultation, The Residential Tenancies Amendment (Review) Bill 2018 is now in parliament.

What’s not changing?

While there has been a push to remove “no grounds” evictions, to allow pets as the default in NSW and to include kitchens and a range of other minimum standards, these haven’t been included in these reforms.

What changes will be made to tenancy laws?

The reforms introduce a new set of minimum standards to ensure properties are in a livable condition. This includes:

  • Requiring basic access to electricity and gas
  • That buildings are structurally sound
  • That properties have adequate natural or artificial lighting and ventilation
  • That there are adequate outlets for lighting, heating and appliances
  • Only landlords now have permission to fix smoke alarms, and will face fines up to $2,200 for failing to repair
  • Tenants can get rectification orders from Fair Trading

The changes also make it easier for tenants to make minor alterations, such as installing a hook to hang pictures on a wall.

Other changes to the structure of leases include:

  • Limiting rental increases for periodic leases to once a year
  • Set fees for breaking a fixed-term lease, and fixed-term leases must be terminated on or after the fixed term, and no earlier than 28 days after notice was given
  • A minimum of 90 days’ notice for termination of a periodic lease
  • No penalties for domestic violence victims who break a lease.

For a more detailed list of the changes, visit The Residential Tenancies Amendment (Review) Bill 2018.

I own a rental property – how does this affect me?

For most responsible property owners, the impact will be minimal. You may need to address some maintenance and repairs (and we can help with that). There is speculation that rental prices may need to rise as a result; but we’ll chat with you about what the right price should be.

Knowing the new termination notice periods is also really important because they can really impact you – particularly if you are thinking of getting new tenants, or selling your property. We can work with you to determine the exact lease term you should be set, based on your unique situation.

I’ve heard about changes to Airbnb – are they the same?

No, although there have been changes for Airbnb in NSW too, with new reforms passed in state parliament last month clamping down on unruly guests and allowing owners corporations to pass by-laws banning or limiting commercial holiday lets in certain circumstances.

What do I need to do?

Nothing yet, the bill is still being debated in parliament. When it is passed, you may need to do a little maintenance to either get your property tenant-ready, or fix up minor alterations when the tenants move out. At :Different, we make maintenance easy, with our clever online technology keeping you informed. We’re also working on a star rating feedback and review system for maintenance and repair so that we can ensure the standard of work remains high.

The :Different perspective

Our view is that the law should be balanced and fair. We are happy that no grounds evictions will stay in place – it’s an important right for owners. We believe that more common adoption of longer lease terms will allow tenants to have more surety. However, this needs to be coupled with stronger lease-break provisions. The weakening of lease-break provisions, particularly in a weakening rental market, is not fair to owners.

If you have any questions about what the changes might mean for you, don’t hesitate to book a call with us.

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