NSW Rental Reforms Announced: What’s about to change?

Introduced to the NSW Parliament on 20 September by Minister for Better Regulation Matt Kean, the Residential Tenancies Amendment (Review) Bill 2018 is set to give more powers to tenants in New South Wales. On their introduction to the NSW Parliament, Mr Kean said that the reforms were “common-sense changes” and that they “get the balance right”. I disagree. I think the reforms are disastrous for both tenants and landlords alike.

The key changes Mr Kean highlighted include:

The ability for tenants to make minor alterations to properties.
The introduction of a new minimum standard for properties.
The ability for tenants to get rectification orders from Fair Trading for repairs.
Restricting rent increases for periodic leases to once a year.
The ability for victims of domestic violence to break a lease without incurring a penalty.

From a social responsibility point of view, the ability for domestic violence victims to break a lease penalty is a good thing. I can’t image it’s going to happen that often, but if it does, landlords are human as well, we understand that these things happen from time to time. The domestic violence termination provision is in full support of its inclusion. However, placing the onus of cost onto the investor is not appropriate.

The provision regarding minor alterations was based on subjective language and needs further clarity as well as enters blurred lines as to what an investment property is.

Under the Residential Tenancies Amendment (Review) Bill 2018, the government’s proposed changes to rental reforms in NSW include:

If the property is in a strata scheme, the landlord or landlord’s agent needs to pass on a copy of the by-laws before the tenant enters into a residential tenancy agreement.
The creation of an offense for a landlord or landlord’s agent if they pass on a completed condition report to the tenant after the signing of the residential tenancy agreement, with a maximum penalty of $2,200.
The creation of an offence for a landlord or landlord’s agent if they do not sign an acknowledgement on a residential tenancy agreement, or if a landlord’s agent fails to sign the acknowledgement of the residential tenancy agreement without a statement from the landlord in writing that the landlord has read and understood a rights and obligations information statement.
If rent is paid via cheque, receipts are allowed to be sent to the email address of the tenant.
Requirements for rent increases do not apply to fixed terms less than two years that specify when, and the amount by, the rent is increased.
Rents paid in a periodic agreement are not allowed to be raised more than once a year.
New minimum standards for properties have been introduced, which include:
- basic access to electricity and gas;
- structurally sound buildings;
- adequate natural or artificial lighting as well as ventilation; and
- adequate outlets for lighting, heating and appliances.
Liability for damage to properties caused by someone else is not imposed on a tenant, or co-tenant, if a domestic violence offence is involved with the co-tenant.
Landlords can have access to premises without the tenant’s consent to take photos or visual recordings of the interior to advertise the property for sale once in a 28-day period, as long as reasonable notice is given and must not include tenants’ possessions in photos or footage.
Only landlords can carry out repairs to smoke alarms, with the exception of certain kinds of smoke alarms, with a maximum penalty of $2,200 for failing to repair.
In matters involving a Tribunal about repairs, more consideration is given to time frames and reasonable diligence.
Tenants who require urgent repairs can get rectification orders from Fair Trading.
Landlords will not be able to unreasonably refuse minor alterations, such as picture hooks.
The termination of an employee or caretaker residential tenancy agreement cannot be earlier than 28 days after the notice to terminate was given.
The termination of other fixed-term tenancies must be on or after the end of the fixed term and no earlier than 30 days after the notice to terminate was given.
The termination of periodic tenancies must be no earlier than 90 days after the day the notice was given.
Landlords cannot give a termination notice to a tenant solely because of their failure to pay rent, water, electricity, gas or oil charges unless the charge has not been paid for at least 14 days.
In matters involving a Tribunal about the termination of a tenancy due to unpaid water charges, the termination is only valid if the landlord has requested payment from the tenant within three months of the bill’s issue.
Tenants may give a termination notice if they enter into an agreement by misleading statements that are proven to be concealing certain facts.
Tenants may give a termination notice if the property is included on the loose-fill asbestos insulation register during or before the commencement of the tenancy without informing the tenant.
Tenants or co-tenants can give a domestic violence termination notice without any penalty if they are a victim of domestic violence, which is defined as:
- The tenant or co-tenant being a victim of a domestic violence offence where the offender was declared guilty during the tenancy.
- The tenant or co-tenant has the protection of an active DVO.
- The tenant or co-tenant is protected against family violence by a domestic violence offender.
- The tenant or co-tenant has been declared by a competent person to be a victim of domestic violence.
The break fee for fixed-term agreements less than or equal to three years is dependent on the percentage of how much of the fixed term has expired:
- less than 25 per cent: 4 week’s rent;
- 25 per cent to less than 50 per cent: 3 week’s rent;
- 50 per cent to less than 75 per cent: 2 week’s rent; or
- 75 per cent to 100 per cent: 1 week’s rent;
The creation of an offence for when a landlord or a landlord’s agent lists a tenant or co-tenant’s personal information in a residential tenancy database if the tenant or co-tenant terminated a tenancy due to domestic violence, with a maximum penalty of $2,200.
The creation of an offence for database operators to charge fees for giving copies of personal information in a residential tenancy database to that person.

It is only the private landlords that are capable of providing rental property in nearly every street in Australia and have done so for many years. Some 70% of rental stock is supplied by private mum and dad type landlords who are mortgaged up.

Everybody deserves a safe and secure place to live, regardless of whether they rent or own their own home - and with 1 in 3 people in NSW renting, it is in the best interests of renters that there is an equitable balance between landlords and tenants. It is unfortunate a few bad landlords and tenants cause significant problems and media coverage for their unreasonable actions.

While the Berejiklian Government’s changes are a good step in the right direction, it is important that renters and landlords are also protected from unfair situations which make providing homes for tenants more difficult. It is essential to have balance to enable landlords to continue to provide accommodation without incurring significant economic losses or added layers of regulation.

The proposed changes to tenancy laws will improve the lives of the few tenants effected by these unsavoury conditions but consideration of making private rental more attractive must include having reasonable conditions for private landlords to enter and stay in the market. I support important tenancy reforms but we need to ensure there is an equitable approach to the private rental market that continues to expand and offer accommodation to those who may never afford to own their own home.

If you're concerned on how these reforms could effect you as a landlord or a tenant, contact me for a free consultation. You can call me on 0418 600 806 or get in contact via my website.