As of March 23rd 2020, changes to current NSW residential tenancy laws came into effect. But what exactly do the new Tenancy laws mean for NSW landlords? Whether you’re a landlord or a tenant, understanding how the recent changes will affect you is important.
Changes to the NSW Residential Tenancies Regulation 2019 and the NSW Residential Tenancies Amendment Act 2018 will have an impact on rental increases, breaking leases and tenancy termination.
Here is a summary of all the main changes landlords and tenants should be aware of, regardless of whether you use a property manager or not.
Changes to NSW Rent Increases
Rent increases are limited to one increase during every 12 month period for ongoing periodic agreements. If the agreement is fixed-term and for less than two years, landlords no longer need to provide 60 days written notice. However, any increase must be set out in the agreement for the written notice waiver to be valid.
Changes to Fixed Utility Providers
Landlords or property managers are prohibited from including terms that make it mandatory for tenants to use specific utility providers if the landlord is not restricted to using any one provider. This change applies to all residential tenancy agreements dated from March 23rd 2020 onwards. Tenants are free to choose any provider they deem fit and cannot be forced to take on the landlords ‘preferred’ utility providers.
Tenant Breaking Fixed Term Tenancy Agreement
Tenants are well within their rights to break their lease early, with a fixed breaking fee reflecting the total length of the fixed-term lease that has expired. This will take effect on all leases signed after March 23rd 2020.
- Tenants will pay a break fee equivalent to one week’s rent for fixed-term agreements that have satisfied 75% or more of their lease duration.
- Tenants will pay a break fee equivalent to two week’s rent for fixed-term agreements that have satisfied at least 50% of the lease duration but less than 75% of it.
- Tenants will pay a break fee equivalent to three week’s rent for fixed-term agreements that have satisfied at least 25% of the lease duration but less than 50% of it.
- Tenants will pay a break fee equivalent to four week’s rent for fixed-term agreements that have satisfied less than 25% of the lease duration.
Tenant Making Minor Alterations to Premises
Tenants are able to make minor renovations, additions and alterations if the residential tenancy agreement permits it or they have the landlord’s written consent. Should the tenant make a request, the landlord or property manager cannot withhold consent unreasonably.
Unless the landlord or property manager agrees otherwise, any additions, renovations, alterations or fixture installations must be paid for by the tenant. For properties that are listed as heritage items or on the loose-fill asbestos insulation register, the changes to tenancy laws do not apply.
The following list of minor additions, renovations, alterations and fixture installations still require the tenant to get written permission from the landlord or property manager.
However, if the property is not exempted due to being a heritage item or on the loose-fill asbestos insulation register, placing conditions on consent or refusing consent to the tenant will be seen as unreasonable.
Minor Additions, Renovations, Alterations & Fixtures
- Installing window safety devices, such as window locks to improve the safety of children residing in the property.
- Installing child safety gates within the property, such as on doorways and stairs.
- Attaching child-proof latches to outdoor gates of single dwellings.
- Affixing furniture to non-tiled walls for safety purposes.
- Affixing fly screen to windows on the property.
- Applying shatter-resistant film to glass doors and windows.
- Replacing or installing internal window coverings such as removable blinds and curtains and installing cord guides and cleats.
- Installing lever-style taps and handheld showerheads for disabled or elderly occupants.
- Planting shrubs, herbs, flowers and vegetables in the garden if existing vegetation does not need to be removed and they don’t grow more than two meters tall.
- Inserting or replacing screws, nails and hooks for hanging picture frames, paintings and similar items.
- Installing removable wireless security cameras outdoors.
- Installing cable internet connections or phone lines.
The landlord or property manager can request that the installation of phone lines, internet connections, lever-style taps and hand-held showerheads be carried out by a qualified person.
Tenant Damage and Modifications
Except for fair wear and tear, tenants are responsible for leaving the property in the same condition as they found it when their residential tenancy agreement started. This includes ensuring any renovations, additions or alterations are removed at the end of the lease. They are also responsible for repairing any damage caused to the property.
Any fixtures the tenant has installed can also be removed if they wish to do so. However, should any damage occur as a result of removing fixtures, the tenant is obligated to either repair or compensate the landlord. Any fixtures that have been paid for by the landlord cannot be removed by the tenant.
Should the tenant fail to make any repairs or any repairs are not made to a satisfactory standard, landlords can seek compensation by applying to the NSW Civil and Administrative Tribunal. This is especially true should the landlord or property manager face hardship in letting the premises to future tenants due to the nature of disrepair or damage.
Landlord Smoke Alarm Responsibility
Landlords and property managers must ensure that smoke alarms are installed and in good working order. Failure to do so will result in penalties. Landlords must:
- Perform annual smoke alarm checks and verify that they are working correctly.
- Replace removable batteries either annually or as per the smoke alarm manufacturer instructions.
- Replace or repair smoke alarms that are not working within two days of becoming aware of the fact.
- Replace smoke alarms with new ones within 10 years of the date of manufacture; or earlier if specified by the manufacturer.
If a tenant becomes aware of a smoke alarm that needs replacement or repair, they need to immediately notify the property manager or landlord. This includes the need to replace a battery. Should the tenant replace the battery themselves, they must notify the property manager or landlord upon completion.
When it comes to replacing or repairing smoke alarms, tenants can only do so if the landlord or property manager fails to repair or replace the smoke alarm within two days of being notified. Tenants should be reimbursed for the cost of replacement or repair when providing appropriate evidence.
*Note – social housing tenants are not covered by these provisions.
Landlord or Property Manager Information Disclosure
Property managers and landlords must not conceal material facts or make misleading or false statements to prospective tenants before they sign a tenancy agreement.
Before any agreement is signed, the landlord or property manager must also tell the tenant of any prepared sales contracts, intentions of selling the property, or if any court action is being taken to repossess the property.
The complete list of material facts can be found here. The new material facts that have been added include:
- Landlord or property manager disclosing whether the property has been used to grow or manufacture prohibited drugs in the past two years.
- Landlord or property manager disclosing whether the building has been issued a fire safety or building product the rectification order for external combustible cladding.
- Landlords or property managers must disclose whether the property is part of a strata scheme with scheduled major repairs or rectification work to be done on the common property during the fixed-term agreement.
Seven Standards of Fit for Habitation
To be able to legally rent out a property to tenants, landlords and property managers must ensure the property is fit for habitation. Over the years, the ambiguous nature of these requirements has often led to disputes.
To help clear up any ambiguity and clarify what fit for habitation is considered to be, the following habitation requirements have been introduced. it’s important to note that all rental properties must meet these minimum requirements as of March 23rd 2020.
- The property must be structurally sound.
- The property must have adequate ventilation.
- The property must have adequate drainage and plumbing.
- The property must contain private bathroom facilities, including bathing and toilet facilities.
- The rental property must have adequate artificial or natural lighting in all rooms except for garages and storage rooms.
- There must be a connected water supply service or infrastructure for the supply of cold and hot water for cleaning, washing and drinking.
- Must have a gas and electric supply with adequate gas or electricity outlets for appliances, heating and lighting.
Make the Change – Get Leased
Keeping on top of current rental property laws, regulations and codes of practice can be challenging for many landlords. If you have any questions regarding the recent changes to NSW rental laws and are considering letting your property, contact Leased today.
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The content of this blog post is for reference use only. For a full list of changes to NSW property rental laws, please check the NSW fair trading website for more.