Residential tenancy reforms: what you need to know

by Urbane Property

Sweeping changes to rental laws that aim to improve the lives of both tenants and landlords will come into effect in NSW on March 23, 2020.

According to Fair Trading NSW, these laws will “improve tenants’ renting experience while ensuring landlords can effectively manage their properties”.

The main objectives of the news laws are to:

  • Lesser disputes over maintenance and repairs
  • Improve certainty and protections for renters
  • Clarify the rights and obligations of renters and landlords

Here are the major changes set to impact upon tenants and landlords alike.

 

Minimum standards for rental properties

The new legislation introduces seven minimum ‘habitation’ standards for rental properties. They are:

  1. A structurally sound property
  2. Adequate lighting in each room
  3. Adequate ventilation
  4. Efficient, reliable electricity or gas supply
  5. Adequate plumbing and drainage
  6. Efficient and reliable water supply
  7. Private bathroom facilities.

It is expected these standards will be in place at the start of a tenancy and throughout the tenancy, through repairs or maintenance if necessary. A new condition report will be provided by the landlord to reflect these requirements.

NSW Fair Trading now has the power to issue rectification orders for repairs and maintenance if these minimum standards are not met. If the landlord does not comply, tenants can give 14 days notice of their intention to leave.

Young couple unpacking boxes in new home
New tenants are now required to be provided with a new condition report, detailing the standard of the property.

Smoke alarm obligations

Landlords and property managers will now be required to make sure smoke alarms in rental properties are working. This includes annual checks, repairing faulty alarms within two days and regularly replacing smoke alarms.

Tenants are obligated to contact their landlord or property manager if they discover a faulty smoke alarm.

 

Tenants permitted to make minor changes

Tenants will be permitted to make changes ‘of a minor nature’ to their rented property – changes the landlord can’t unreasonably refuse. However written consent needs to be obtained from the property owner. 

These changes include installing childproof gates or other child safety devices, installing blinds and flyscreens and hanging paintings or picture frames. The full list can be found here.

We'll hang your painting right here
Tenants are now permitted to make minor changes to a property, after obtaining written consent from the owner.

Tenants are still liable for any damage they cause to a rental property, they must leave the property in the same condition as at the start of the rental agreement, with exceptions for wear and tear and remove or fix any alterations, additions or renovations made, as per the above.

 

Rent increases and break rent fees

For continuing leases, rent increases are now limited to once every 12 months. There are also new specified mandatory fees for tenants who break a lease. These are:

  • 4 weeks rent if less than 25% of the lease has expired
  • 3 weeks rent if 25-50% of the lease has expired
  • 2 weeks rent if 50-75% of the lease has expired
  • 1 week rent if more than 75% of the lease has expired.

 

Greater disclosure requirements

Landlords or property agents can’t make false or misleading statements or knowingly conceal material facts, or information, from a potential tenant before they enter a tenancy agreement.

The New tenant checklist covers everything that a landlord or agent needs to give a tenant prior to that agreement.

This includes informing the tenant if a contract for sale has been prepared for the property or if a lender is taking court action for possession of the property.

New information that needs to be disclosed to a potential tenant also covers:

  • If the premises has been used for the manufacture or cultivation of prohibited drugs in the past two years
  • Whether the property is part of a strata scheme where scheduled rectification work or major repairs will be carried out to common property during the fixed term of the agreement
  • If the building has external combustible cladding.

Again, the tenant can provide 14 days notice of their intention to end the tenancy agreement if this information has not been disclosed. The tenant can apply to the Tribunal to end the tenancy and landlords may be liable for compensation for costs incurred by the tenant in ending the agreement.

Young woman with dog lying on sofa using laptop
More information on the history of a property will be available to renters.

Protection for domestic violence victims

Tenants are now permitted to end their leases, without a penalty, if they or their dependent child has been exposed to domestic violence. A tenant will need to provide evidence of the domestic violence allegations.

A minimum notice period is not required. The termination date can be the same day as when the termination notice is given. The circumstances of the termination are required to be kept confidential.

Landlords can apply to the NSW Civil and Administrative Tribunal to dispute the termination notice. There are also provisions for the co-tenant to remain in the property or for them to be removed from the property. 

 

Conclusion

All of these changes have important ramifications for landlords, property investors, tenants and property managers and they apply to NSW properties as of March 23, 2020.

If you have any questions, or are interested in leasing your property through Urbane Property, contact us today.

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