NSW Government looking to continue to reform residential tenancies law

The NSW Government is getting set to continue the overhaul of the current Residential Tenancies Regulation, with the aim of improving the renting experience in NSW.

The proposed amendments are set to have a major impact on the way both sales agents and property managers interact with current tenants.

As a little history, in October 2018, the NSW Parliament passed the Residential Tenancies Amendment Act 2018, which introduced a range of reforms to help both tenants and landlords.

The changes were some of the first major amendments the industry had seen in almost two decades. Most of the reforms in the Amendment Act have not yet started as regulations but need to be developed to support the reforms relating to domestic violence started on 28 February 2019.

Fair Trading NSW notes as prices of property, particularly in Sydney have continued to balloon to the point that median house prices are now around the $1 million mark, future generations will be increasingly forced to rent.

“The Government is keen to ensure that tenants have a fair and equitable arrangement with their landlords to improve the experience and give them added security,” they state.

“At the same time, the regulations will have plenty of scope to help protect landlords from the impact of illegal activity and the impact of domestic violence.”

Some of the key points the next round of changes will focus on will be making it easier for tenants to make certain minor alterations, and requiring landlords or their agents to inform prospective tenants of any drug crimes to do with the rented property. There will also be requirements clarifying how and when a landlord must carry out a repair to a smoke alarm, and when tenants may replace a battery in a smoke alarm.

The main points from the new regulations are:

● Expanding the list of material facts that landlords or their agents must not knowingly conceal from a prospective tenant to include drug crimes

● Prescribing the manner and the period for landlords to carry out repairs to a smoke alarm, and prescribing the conditions under which a tenant may replace a battery in a smoke alarm

● Establishing a list of minor alterations that a tenant can carry out, where it would be unreasonable for a landlord to withhold consent, and specifying which alterations may be carried out by a qualified person

● Providing mandatory terms that cannot be modified or excluded from fixed-term tenancy agreements of 20 years or more

● Increasing the limit on the monetary jurisdiction of the NSW Civil and Administrative Tribunal

● Providing an option for a 5-year fixed term in the standard form of agreement to encourage landlords and tenants to consider longer-term leases

● Updating the standard form of residential tenancy agreement and condition report

● Expanding the list of offences under the Act for which penalty notices may be issued and increasing the penalty amount that may be imposed

● Simplifying clauses to make it easier to read and to improve consistency.

The Department is seeking feedback on the proposed Regulation and the timing for implementing the new laws. Consultation will be open from 5 July 2019 to 2 August 2019.

The Regulation is expected to be finalised and published on the NSW legislation website in September 2019.

It is proposed that the remaining provisions in the Amendment Act and the new Regulation will start on 2 December 2019, to give landlords and tenants sufficient time before the new laws start. Minimum standards for rented properties are likely to start 6 months later so that landlords have enough time to prepare.

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.