New Rental Laws – What the Impact is on Landlords
The rental landscape in New South Wales (NSW) has just undergone a major overhaul, with new laws aimed at creating a fairer and more balanced market. While these changes offer greater protections for tenants, they also bring new responsibilities and challenges for landlords.
Whether you’re a seasoned property investor or just starting out, it’s essential to understand how these reforms will affect your rights and obligations as a landlord. Failing to do so could result in costly fines, disputes, or legal challenges.
Here are the key changes to rental laws and how it will affect you.
1. Landlords will be required to provide a valid reason for ending a tenancy for both periodic and fixed-term leases.
Acceptable reasons will include:
- Existing regulations where the renter is at fault, such as a lease breach, property damage, or unpaid rent
- The property is being sold or listed for sale with vacant possession
- The property must be vacant for major repairs, renovations, or demolition
- The property will no longer be rented out, as it will be used for a different purpose, such as a business
- The landlord or their family plan to move into the property
- The renter’s tenancy is tied to their employment, and that employment has ended
- The renter is no longer eligible for affordable or transitional housing, or the property is student accommodation and the renter is no longer a student
- The property is designated for key worker housing and needs to be available for a key worker, such as a teacher, health worker, or police officer.
Landlords must provide evidence supporting the reason with the termination notice.
The changes are expected to take effect in the first half of 2025.
Penalties would apply if the reason provided is not genuine. If you have advised, you are selling or completing work etc, you will not be able to market the property for lease for 6-12 months (Still to be confirmed).
2. Extended notice period for end of lease
The required notice period for renters in a fixed-term lease before their lease ends is set to increase.
The notice period will extend from 30 days to:
• 60 days for leases of six months or less
• 90 days for leases longer than six months.
There will be no changes to the notice periods for renters on periodic agreements.
These extended notice periods will give renters more time to secure a new home.
3. Pets in the picture
The new laws recognise the increasing demand for pet-friendly accommodations. Landlords can no longer unreasonably refuse tenants with pets, shifting the responsibility toward accommodating four-legged companions.
What this means for landlords: While this will likely broaden the tenant pool, landlords, understandably have concerns around property damage. You may need to adjust your screening processes and perhaps introduce pet agreements.
4. Cracking down on rent increases
With rising living costs, the government is responding with new regulations designed to keep rental prices in check. One of the most significant changes is the new restriction on rent increases. Under the updated laws, landlords can only increase rent once every 12 months (previously, it was allowed every 6 months). This provides tenants with more stability and predictability around rental costs.
What this means for landlords: If you usually raise your rent every six months, you’ll need to adjust your expectations. The new legislation also says any proposed increase must be backed by market evidence to show that the increase is in line with comparable properties in the area.
5. Background checks
There are unfortunately some unscrupulous agents around, and the changes make it clear that a renter cannot be charged for a background check when they’re applying for a rental property.
What this means for landlords: If you don’t do so already,you will need to factor in the cost of background checks into your budgeting when screening potential tenants.
6. No additional fees to pay rent
Renters must be offered a way to pay rent that is electronic and without additional fees, and will be able to choose a bank transfer method or payment via the Commonwealth Government’s Centrepay.
The renter can choose to pay rent using other options if both the renter and landlord agree.
Renters cannot be required to use a particular service provider, such as an app, to pay their rent. (NB These changes to how rent can be paid will start in the first half of 2025.)
What this means for landlords: You will not be able to charge additional fees for the method in which a tenant pays their rent. Negotiation is key when looking at other options of rent payment.
For more details on the changes, visit the official NSW Fair Trading website here.
Why you need an agent who knows the law
With these new regulations in place, it’s clear that rental property management is becoming more complex. For landlords, this means navigating a maze of legal obligations, and this is where we come in.
As members of The Real Estate Institute of New South Wales (REINSW), the peak industry body for real estate agents and property professionals in NSW we do all the training to ensure we are up-to-date with the latest legislation; this means rental agreements, inspections, rent increases, and evictions follow the current laws.
This minimises the risk of legal disputes or penalties that could arise from non-compliance.
Rent increases are now subject to stricter rules, and we are here to help navigate these changes without breaching regulations. We work hard to build a professional working relationship with tenants, so we can negotiate fair rental terms, and ensure any increases are supported by market evidence.
If you have any concerns about these new regulations, or would like know more get in touch. Call us on 02 4954 8833, send us an email to mail@apnewcastle.com.au or visit us in person in our Cardiff office.
As well as managing your property, we’re here to give you information to help you make informed decisions. We want you to get the best from your asset, and our experienced team, headed up by our award-winning property manager Kellie Andriessen can help.