NSW Rental Law Changes: A Step Towards Fairness or a Strain for Landlords?
On 24 October 2024, the NSW Parliament passed the Residential Tenancies Amendment Act 2024. This amendment aims to sweep and reshape the rental landscape. Of these changes, some are effective immediately with the remainder expected to fully roll out by mid-2025, promising greater protections for renters while raising questions about their impact on landlords and the housing market.
What’s Changed?
Deposits and Fees
Limitations have been introduced on what a landlord can accept as a deposit and restricts some fees.
– Deposits are only for the purposes of the rental bond, holding deposit or rent
– Renters can no longer be charged for background checks.
These changes aim to address affordability concerns and prevent unnecessary application costs.
Rent Increases Part 1
A uniform cap limiting rent increases to once per 12 months across all lease types, extending a rule previously applicable to only some leases. This does not currently allow for increases during a fixed-term period.
What’s Changing?
Rent Increases Part 2
When part 2 comes into effect it will allow landlords to increase rent during a fixed-term, but only if adhering to the once per 12-month rule.
Ending Tenancies
Landlords can no longer terminate a lease without a valid reason. Legitimate grounds include property sales, renovations, or personal use. Evidence is required, with significant penalties for false claims.
Notice Periods
Fixed-term leases will require extended notice periods:
– 60 days for leases up to six months.
– 90 days for leases exceeding six months.
Periodic leases will require a minimum of 90 days.
Pet Ownership
Renters can apply to keep pets, with landlords required to respond within 21 days. Refusals must be based on specific, reasonable grounds. Automatic approval applies if landlords fail to respond.
Rent Payments
Renters must be offered fee-free, electronic payment options like bank transfers or Centrepay, preventing forced use of paid alternatives.
The Vision: Fairness and Stability for Renters
The NSW Government is tackling housing fairness with these changes. By capping rent increases and extending notice periods, renters get more stability, which is a big deal in today’s competitive market. Getting rid of “no grounds” evictions also helps tenants feel more secure in their homes.
The updates on pets and background checks show a move toward making renting more inclusive and affordable, acknowledging the hurdles renters face. At the same time, landlords’ concerns aren’t ignored. They still need valid reasons and evidence for ending leases or refusing pets.
The Challenges: Are Landlords Overburdened?
Landlords still have some protections, but these changes add more responsibilities. Longer notice periods and stricter rules for ending leases might make it harder for them to manage properties flexibly.
Plus, not being able to charge extra bonds for pets or adjust rent as often could make some owners think twice about renting out their properties, which might shrink housing options.
NSW Fair Trading’s new Rental Taskforce will play a big role in making sure the rules are followed. The challenge will be finding a balance that keeps things fair without putting too much pressure on landlords.
Balancing Rights: A Win-Win or Market Tension?
For renters, these changes are definitely a win. They bring more financial stability and legal protection. But for landlords, it’s a bit of a mixed bag. While the reforms push for more transparency, they also come with extra responsibilities. It’s still unclear how all this will affect housing supply and affordability in the long run.
In the end, these changes are a big move toward a fairer rental market, but their success will depend on how well they’re put into action and how well the needs of both renters and landlords are balanced.