Changes to Residential Rental Laws

What are the changes?

On 24 October 2024, the NSW Parliament passed the Residential Tenancies Amendment Bill 2024, which is now the Residential Tenancies Amendment Act 2024.

This legislation aims to improve rental laws to support renters, landlords and the community. It provides clarity in relation to the renting rules in NSW which will help increase stability for renters and certainty for landlords.

The changes are as follows:

Extra Fees

A renter cannot be charged for extra costs at the start of a tenancy, including fees for background checks and preparing a tenancy agreement.

Rent Increases

Rent increases can only be made once per year for all leases. Previously, this only applied to periodic leases and fixed-term leases of two years or more.

End of a Tenancy

Landlords will now need a reason to end a tenancy for both periodic and fixed term leases.

This will include reasons such as:

1. The existing rules where the renter is at fault due to a breach of lease, damage to the property or failing to pay rent.
2. The property is being sold or offered for sale with vacant possession.
3. The property needs to be empty for significant repairs or renovations or the property will be demolished.
4. The property will no longer be used as a rental home.
5. The landlord or their family intend to move into the property.
6. The renter lives in the property as part of their employment and their employment has ended.
7. The renter is no longer eligible for an affordable or transitional housing program or the property is purpose-built student accommodation and the renter is no longer a student.
8. The property is part of a key worker housing program and needs to be used by a key worker, like a teacher, health worker or police.

If the landlord wishes to end a lease, evidence must be provided with a termination notice. If a landlord gives a reason that is not genuine, they may face monetary penalties.

Notice Periods for Leases Ending

The amount of notice a renter must have before their lease ends will increase for renters in a fixed-term lease. The notice will increase from 30 days to:

• 60 days, if the lease is six months or less; or
• 90 days, if the lease is more than six months.

There is no change to notice periods for those on periodic agreements.

This change aims to provide renters with much needed additional time to find a new home.

Keeping a Pet

The new laws will make it easier for renters to have pets in their home. A renter will be able to apply to keep a pet and the landlord will only be able to decline for certain reasons.

Once a pet request is made, landlords will need to respond within 21 days. If the landlord does not respond, the pet request will be automatically approved.

The following reasons will allow a landlord to refuse a pet if:

1. there would be too many animals at the property;
2. the property is unsuitable for the animal because of the fencing, or lack of open space, or because it would harm the animal’s welfare;
3. the animal is likely to cause more damage than the bond could repair;
4. the landlord lives at the property;
5. the animal would break other laws, local council rules, strata or community scheme by-laws, or a residential community rule; and
6. the renter did not agree to a reasonable condition for keeping the animal.

There will be limits on any conditions a landlord may place for allowing a pet. For example, a landlord will not be able ask a renter to increase the bond or the rent for allowing a pet.

Based on these reforms, strata by-laws that ban all pets are not valid and cannot be used to refuse a pet.

Payment of Rent

Property owners and agents will be required to offer a way to pay rent that is electronic and without additional fees. Renters will be able to choose a bank transfer method or payment via the Commonwealth Government’s Centrepay. A renter may choose to pay rent using other options, if both the renter and landlord agree. Renters cannot be required to use a specific service provider, such as an app, to pay their rent.

When will the changes commence?

On 31 October 2024, the changes that commenced were the prevention of extra fees at the start of a tenancy and limiting rent increases to once per year for all leases.

Other changes, mentioned above, are expected to commence in the first half of 2025. This allows renters, landlords and the community to prepare for the changes.

How will the changes be implemented and enforced?

The changes will be implemented and enforced by NSW Fair Trading. NSW Fair Trading have created a Rental Taskforce with dedicated inspectors and compliance officers who will focus on preventing and responding to breaches of rental laws.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.