What Does The NSW Tenancy Reform Mean For Landlords And Tenants?

Tenancy law reform has been introduced in NSW, with changes to rental laws affecting landlords and tenants. Here’s what you need to know.

New rental reform has just been introduced in NSW, with changes affecting the rights and responsibilities of both landlords and tenants. Here’s what you need to need to know about the proposed changes and how they affect landlords and tenants. 

What Is The Tenancy Reform In NSW?

Changes to New South Wales’s residential tenancy laws were introduced in Parliament at the end of September, following two years of consultation and lobbying from industry groups. The reform came about after a 2016 review found that the existing Residential Tenancies Act wasn’t balanced between the interests of landlords and tenants. Better Regulations Minister Matt Kean presented the amendments in Parliament, calling them 'sweeping reforms for tenants’ rights'. 

The proposed reform was met with mixed responses from the public and industry groups, with some comparing the changes to those introduced in Victoria just a few weeks before. The Victorian reform has many similarities, but arguably provides stronger protection for renters.

How Are Tenants Affected By The Tenancy Reform? 

NSW tenants can expect positive changes to their rental agreements, with amendments proposed to protect tenants and increase livability in rental properties. 

These changes include new minimum standards for accessing basic necessities like gas, electricity, ventilation and lighting, and landlords will also have to provide assurances that their properties are structurally sound. Tenants will also be given more freedom over the appearance and functionality of the home, as landlords will no longer be able to refuse minor changes such as picture hooks being added to walls. 

From a lease perspective, there are a number of changes to rent increases and breaking leases, designed to protect tenants from unreasonable fees or penalties. Tenants who break a fixed-term lease will be charged a set fee, while rent increases will be limited to once per year in periodic leases. Importantly, there will also be no penalties for domestic violence victims who break a lease.

We’ve written before about the importance of prompt maintenance in establishing good relationships between landlords and tenants, an issue that is being addressed by the reform. Tenants will now be able to get rectification orders from Fair Trading for repairs, giving them more control over required maintenance. 

How Are Landlords Affected By The Tenancy Reform?  

The new benefits provided to tenants also have an effect on the management of an investment property, so there are many changes that landlords need to familiarise themselves with. 

Key points for landlords to note are the changes to rent increases, lease terminations and evictions. In periodic tenancies, landlords will now be limited to one rent increase per year, instead of the current law that allows multiple increases. Tenants breaking their lease will now be charged a set fee, although all penalties will be voided for victims of domestic violence. 

Additionally, while no-grounds evictions have not changed, landlords will not be able to give a termination notice in the case of unpaid rent or bills, unless the payment is over 14 days late. 

Landlords should also understand the changes to maintenance and minor work completed by tenants, as these form a significant part of any tenancy. Landlords who don’t prioritise repairs may now receive a Fair Trading rectification order from their tenants, making timely maintenance even more important than it has been previously. The changes also prevent landlords from refusing minor work, such as the installation of picture hooks.  

For properties in strata schemes, landlords or their agents must also pass on a copy of the by-laws before the tenant signs the lease. 

Unsure Of Your Obligations Under The Tenancy Reform? 

Get in touch with our team of specialists today for the full details.