September 24, 2018

Special Feature | Changes To NSW Rental Legislation

After a five year statutory review by the Department of Fair Trading, The NSW Better Regulations Minister Matt Kean has handed down some dramatic amendments to the Residential Tenancies Act (NSW) 2010.

Changes of the major kind include:

  • Limiting rent increases on periodic (month to month) leases to once per year;
  • No break lease penalties for Domestic Violence Victims who break a lease; and
  • A prescribed break-lease fee for fixed-term tenants who terminate a lease early.

Some of the more fine-toothed changes, that appear to give the tenants ‘more rights’ are actually things that promote desirable attitudes in tenants, with a bit of common-sense applied.

Things like allowing people to make minor alterations, like picture hooks so that tenants can hang a family photo. Ideally, the type of tenant that wants to take some guardianship of the home and treat it with pride and respect are exactly the types of tenants that most landlords are looking for.

In our Monthly Market Spotlight, Leasing Consultant Sophie Moir says, “I think one of the upshots of the disruption has been an increased understanding of the value of steady long-term tenants. The tenants we are seeing want a sense of ‘home’ which means that they are looking for longer leases, which we would consider to be 12 months or more.”

“Like all consumers,” says Moir, “they expect value for money, in terms of the rental price and market conditions. What I have also learned is that the tenants who are seeking to make a rental property in their home, look for signs of owners who are willing to maintain their property. Houseproud tenants almost always gravitate to the well-maintained properties of house-proud landlords.”

Some tenant advocates and lobby groups were hoping that the reforms would remove the ability for landlords to issue a “without grounds” termination of a lease. The “without grounds” capability allows for a termination at the end of a fixed term tenancy, without providing a reason, so long as minimum notice periods apply. For a periodic tenancy, the termination could come at any time (due to the month-to-month nature of the lease,) so long as the notice periods are applied.

From a tenant’s perspective – the without grounds termination can feel unjust, even retaliatory and there are many complaints from the broader tenant marketplace that these terminations have followed requests for maintenance. From a landlord or property manager’s perspective, the without grounds termination retains the underlying right of ownership should the landlord wish to place alternative tenants, sell the property or move in.

The discord around the without grounds termination was a cornerstone of Labour’s election promises in NSW, but it is, for now not included in the amendments.

At Byron Bay First National we are committed to providing Landlords and tenants with their options under legislation and pride ourselves on the skilled application of common sense in negotiating win-win outcomes.

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