CHANGES TO RENTAL LAWS IN NSW:

RENT INCREASE CAPS, NO GROUND TERMINATION, PRESCRIBED GROUNDS, NEW PET REFORMS

Dear Landlords,

We would like to share with you some proposed legislative changes that relate to rental properties.
On 15 October 2024, the Residential Tenancies Amendment Bill 2024 (RTA Bill) was introduced into Parliament.

This was passed on the 24th of October meaning that the new laws are expected to come into effect in early 2025. The RTA Bill makes significant and important changes to the rental laws in NSW.

Here are some of the proposed changes:

Termination notices:
1. No grounds termination notices for periodic agreements will be abolished and landlords will only be allowed to terminate a periodic and fixed-term tenancy on the following prescribed grounds:
- Breach of tenancy agreement
- Actual or proposed sale of the premises
- Significant renovations or repairs, demolition
- Where a tenant is no longer eligible for an affordable housing scheme, a transitional housing program or student accommodation or an employee or caretaker agreement has ended
- Where the premises is required for key worker accommodation
- Where the premises will no longer be used as rented residential premises
- Where the landlord or family will reside at the premises

2. The RTA Bill introduces “tenancy exclusion periods” where it is an offence for a landlord, who issues a termination notice on a prescribed ground, to relet a property within a designated timeframe unless they have obtained the Secretary’s approval.

3. The RTA Bill proposes changes to the termination notice periods to end fixed-term agreements:
- From 30 days to 60 days for leases shorter than six months
- From 60 days to 90 days for agreements longer than six months

4. Supporting documents or information issuing a termination notice may be required.

5. The RTA Bill contains provisions allowing tenants who are given a termination notice by a landlord, or who give a termination notice, to vacate a premises early.

Changes to the laws on pets:
1. The RTA Bill allows tenants to keep pets in rental properties with the landlord’s consent, where tenants have used an approved form for consent.

2. The landlord will have 21 days to respond to the tenant’s pet application, in writing, otherwise consent will be deemed to have been granted without conditions.

3. Landlords will only be permitted to refuse consent on certain specified grounds (including overcrowding of animals at the premises, unsuitability of the property, potential damage that would cost more to fix than the rental bond, where a landlord lives at the rental property, legal restrictions and where a tenant refuses to agree to the landlord’s reasonable conditions).

4. Consent may be granted subject to “reasonable conditions” (for example, preventing certain types of animals to be kept indoors, end of lease professional carpet cleaning (if reasonable for the type of animal and premises) and professional fumigation (for a mammal) if the animal is kept indoors, other reasonable conditions specific to the keeping of the animal at the premises, type of animal and the premises, and as prescribed by the Regulation.

5. Certain conditions are prescribed to be “unreasonable” including increasing rent or the rental bond, requiring a form of security, or a condition which is a prohibited term under the lease or prescribed by the Regulation to be unreasonable.

6. Disputes over pet consent can be taken to NCAT.

7. Provisions relating to consent to keeping an animal in a rental property will automatically form part of a residential tenancy agreement.

Other proposed changes:
1. Rent will only be able to be increased once every 12 months (regardless of the type of lease (fixed term or periodic)).

2. Tenants will need to be offered Centrepay and “approved electronic bank transfer methods” as ways to pay rent. An approved electronic bank transfer method is a free electronic transfer from the tenant to the landlord or landlord’s agent’s bank account.

3. Landlords or agents will not be able to charge prospective tenants for background checks or the preparation of a lease.

Please do not hesitate to contact your property manager should you any questions relating to the proposed changes.

Kind Regards,
Wise Property Projects Pty Limited

All information is non-exhaustive and of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.

Changes to Rental Laws

Changes to Rental Laws