We wanted to let you know of important changes to rental laws in NSW.
On 24 October 2024, the NSW Parliament passed major reforms to residential tenancy laws through the Residential Tenancies Amendment Act 2024.
The changes include:
• requiring landlords to provide a reason to end a lease – ending ‘no grounds’ terminations for renters
• making it easier for renters to keep pets in their homes
• limiting rent increases to once per year
• prohibiting extra charges, including fees for background checks and for preparing a tenancy agreement
• ensuring renters can pay rent for free by bank transfer or Centrepay.
Changes that have already started
Two important changes commenced on 31 October 2024.
1. Background checks and other changes: Tenants must not be charged any extra charges when searching for, applying for or starting a tenancy, including fees for background checks and preparing a tenancy agreement. More information can be found on the Fair Trading website.
2. Rent increases: Rent increases can only be made once per year for all leases. Previously, only periodic leases and fixed-term leases of two years or more had this rule. It now applies to all leases. Different rules apply for fixed-term leases of two years or less that were entered into before 31 October 2024. More information can be found on the Fair Trading website.
It is your responsibility to understand how these changes apply to your business operations. Penalties will apply for noncompliance.
Changes starting in 2025
Further changes are expected to start in the first half of 2025 (dates to be confirmed).
1. End of a tenancy: Landlords will need a reason to end a tenancy for both periodic and fixed-term leases. If the landlord wishes to end a lease, evidence must be provided with a termination notice, with penalties payable by landlords who give a reason that is not genuine.
2. Notice periods for fixed-term leases: The amount of notice a renter must have before their lease ends will increase for renters in a fixed-term lease from 30 days to 60 days if the lease is 6 months or less, or 90 days if the lease is more than 6 months.
3. Keeping a pet: It will be easier for renters to have pets in their home. A renter will be able to apply to keep a pet, with the landlord only able to decline for certain reasons.
4. Payment of rent: Landlords and agents will be required to offer a free and convenient way to pay rent that is electronic and without additional fees.
New regulations are being developed
The regulations will provide additional details, including:
• supporting information required for new grounds to end a tenancy
• the application form for consent to keep a pet
• how the data will be collected about the reasons a tenancy ended.
Staying informed
We will pass along information and education from NSW Fair Trading. You can subscribe to their Property Matters newsletter to stay up to date with the progress of the changes.
Rental property water efficiency measures from 23 March 2025
For a landlord or an agent to charge a tenant for water usage, the property must meet prescribed water efficiency measures. From 23 March 2025, this will require toilets in rental properties to be dual flush with a minimum 3-star WELS rating. This is in addition to the existing water efficiency measures already required to be in place if a tenant is charged for water usage. Read more.
For more information and guidance on the changes, please visit NSW Fair Trading website or call them on 13 32 20.