NSW Rental Law Reforms: What Landlords Need to Know
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If you own an investment property in NSW, you would likely be aware of the state government’s latest changes to rental laws. With the rollout beginning late last year, they may have already begun to affect the way you manage your property.
The aim of these reforms is to provide renters with greater stability while offering landlords more certainty in their property management processes.
But what exactly does this mean for you?
What are the key changes to NSW laws?
To help you navigate this transition, we’ve broken down the key updates and how they may impact your responsibilities as a landlord.
The Residential Tenancies Amendment Act 2024, passed on 24th October 2024, introduces several large-scale reforms to the rental market. The state government took a gradual approach to the rollout, with some changes taking effect on 31st October last year and others taking affect on 19th May this year.
Here’s what’s new:
- No-grounds evictions banned – Landlords now need to provide a valid reason to end a tenancy.
- Rent increases limited to once per year – This applies to all leases, including fixed-term and periodic agreements.
- Changes to pet policies – Renters will be granted more leniency regarding pet ownership, with landlords required to provide valid reasons for refusal.
- Upfront fees prohibited – That means no more charges for background checks or tenancy agreements.
- New payment rules – Renters must have access to a fee-free electronic payment option such as bank transfer or Centrepay.
Let’s take a closer look at each reform.
1. No more no-grounds evictions
Previously, landlords could terminate a tenancy without needing to provide a reason. However, under the new laws, landlords must now meet specific criteria, such as:
The property is being sold with vacant possession.
Major repairs, renovations or demolition are required.
The landlord or a family member intends to move in.
The tenant has breached lease terms (e.g. non-payment of rent or property damage).
The property will no longer be used as a rental.
So, if you intend to issue a termination notice, you’ll now need to provide supporting evidence of at least one of the circumstances above, and penalties apply for false claims. Want to learn more about this reform in particular? Check out our article all about it.
When does this start? Within the first half of 2025, with no date officially announced.
2. Rent increases limited to once per year
Prior to these reforms, there were already some restrictions to rent increases in place. But now, this rule applies across the board. No matter the kind of lease, you can only raise your rent price once every 12 months.
When did this start? 31st October, 2024.
3. Pet-friendly policy
Renters will now have the right to request a pet, and landlords must respond to their request within 21 days. If no response is given, the pet is automatically approved.
If you want to refuse a tenant’s pet request, you’ll need a valid reason, such as:
The property is unsuitable (e.g. lack of fencing, impact on the animal’s welfare, etc.).
The pet would cause excessive damage beyond what the bond could cover.
The property has legal or council restrictions on pets.
Importantly, landlords cannot demand a higher bond or rent price to accommodate a pet.
When does this start? 19th May this year.
4. Upfront fees banned
Landlords and agents can no longer charge extra fees at the beginning of a tenancy. This includes fees for background checks or preparing the tenancy agreement.
When did this start? 31st October, 2024.
5. Rent Payment Options
Landlords must now offer their tenants at least one fee-free electronic payment option, such as bank transfer or Centrepay. Renters cannot be forced to use third-party payment platforms that charge fees unless they choose to do so.
When does this start? No date officially announced.
What should I do now?
With these changes continuing to roll out over the coming months, now is a good time for you to review your tenancy agreements, rent increase plans and pet policies to ensure compliance and avoid any penalties. It’s also vital that you keep an eye out for launch dates for each of the reforms yet to take effect, including the ban on no-grounds lease terminations.
At Shead Property, we’re here to help you navigate these reforms and keep your investment thriving under any conditions. If you have any questions or need expert property management advice, get in touch with our team today.
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