New South Wales is the latest state to introduce reforms that make it easier for tenants to rent with pets.
While the changes have been welcomed by many renters, some landlords and agents are expressing concern about the potential impact on their investment properties.
Australians love their pets.
Data from Animal Medicines Australia found 69 per cent of households are home to one or more pets – that is an estimated 28.7 million pets in around 6.9 million homes.
And of those who do not already have a pet, half wish they did! Australia is also a nation of renters, with the ABS noting that 31 per cent of households (around three million) are rentals and 26 per cent of those are private rentals (rental properties that are owned and managed by private individuals or private companies, as opposed to being managed by government or social housing providers).
So, it stands to reason that there is a need for rental accommodation that allows pets.
Benefits of allowing pets in rentals
Instead of begrudgingly agreeing to allow a pet at their investment property, landlords could go properly pet-friendly by making the premises more suitable for pets.
For example, by having hard flooring instead of carpets, having window and door treatments that are less likely to be chewed or clawed and installing pet doors and barriers.
Benefits of offering a pet-friendly rental may include:
- Expanded tenant pool and increased income – there is high demand for pet-friendly rentals, so there is an increased prospective tenant pool. This allows the landlord and agent to be very selective in the tenant chosen. Tenants may also be willing to pay a higher rent for properties that are more suitable for pets.
- Lower vacancies and tenant turnover – pet-friendly properties are often highly sought-after and rent quickly, reducing time and costs associated with advertising and the rental sitting vacant. Tenants with pets may often be willing to enter longer leases too, providing a steady income for landlords (and time savings for agents).
- Happy tenants and better upkeep – the physical and mental health benefits of pet ownership are well documented, and having happy tenants can make for better relationships with landlord and agent. Tenants who feel ‘at home’ are also more likely to look after the property and may be willing to make improvements (to cater for their pets) at their own expense.
Beyond the ‘business’ aspects of going pet-friendly, there is also the fact that allowing pets means tenants are spared the stress of having to give up beloved companions for the sake of securing a place to live.
A leading cause of animals being surrendered to shelters is an inability to find accommodation that allows them to stay with their owner.
Allowing pets also reduces the risk of tenants keeping them at the property in secret and the issues this can cause.
If pets are permitted, there is greater control, including the possibility of requiring a pet résumé so there are no surprises about those residing at the rental.
Renting with pets – new laws
In recent years state and territory governments have amended tenancy legislation to make it easier for people to rent with pets.
The ACT was the first (November 2019), followed by the NT (January 2021), Victoria (March 2021), Queensland (October 2022), SA (1 July 2024) and WA (29 July 2024).
Tasmania has amended the legislation which, at the time of writing, had passed the House of Assembly and was awaiting approval in the Upper House.
New South Wales is the latest jurisdiction to make the move.
On 19 May 2025, new laws came into effect which has made it easier for tenants to have pets – up to four – in rental accommodation.
Under the amended law, tenants still need permission to keep a pet at the premises (assistance animals excepted), but landlords cannot reasonably refuse the application.
Refusal is only permitted for a limited number of specific reasons such as it being a request for an unreasonable number of animals, the fencing not being appropriate, there not being enough open space, the animal not being able to be kept humanely, or due to owner-occupation or council restrictions.
Risk of damage
Another valid ground for refusal – and an aspect of pets in rentals that many landlords and property managers are concerned about – relates to the animal being expected to cause excessive damage.
To use this reason to refuse approval, the landlord must believe it is highly probable that the pet will cause more damage to the property than the amount of the rental bond.
To help evaluate whether damage is highly probable, landlords must consider characteristics of the property and pets, and action by the tenant to mitigate the risk.
Tenants can challenge refusals.
Reasonable conditions can be attached to approval (again, tenants can challenge these), but it should be noted that requiring a pet bond is not permitted (WA is the only jurisdiction where pet bonds are legal).
Landlords have 21 days to respond to the request (which needs to be made on an approved application form). If they fail to respond, approval without any conditions is automatic.
The new law has been the subject of a lot a chatter among landlords and agents.
REINSW, among others in the industry, has raised concerns about the implications for landlords and tenants in respect to the erosion of an owner’s rights and whether the new rules will actually make renting more difficult.
Although the law has only just come into effect, there is already talk of a landlord exodus and of the prospect of ‘pet bidding’ becoming a thing.
Pet bidding is where tenants effectively negotiate away their right to apply to have a pet in return for the landlord looking more favourably on their rental application.
Pet damage and insurance
EBM RentCover is also fielding lots of queries about insurance in the context of the requirement to allow pets.
Of course, tenants are responsible for any damage that they, their children, their guests, or their pets cause at the rental.
None of the state or territory legislation absolves the tenant of this responsibility as part of their right to have a pet.
In fact, many of the laws make it clear that the tenant is responsible for rectifying any damage that their pet has caused (beyond fair wear and tear).
But, as you know, tenants do not always do the right thing.
And sometimes they do not make good on their responsibility to repair damage they have caused.
This is where landlord insurance usually steps in.
I say ‘usually’ as most landlord insurance policies cover one or more types of tenant-related damage (accidental, malicious, and intentional).
But, when it comes to damage caused by pets, not all landlord insurers provide cover.
Quite a few do not.
And some that do have onerous conditions on cover or offer low coverage limits.
EBM RentCover provides cover for damage caused by pets (domestic animals only) in our RentCover Ultra, RentCover Platinum and RentCover ShortTerm policies.
We offer up to $70,000 in cover (without any sub-limits) and do not impose any onerous conditions (while the pet needs to be owned by the tenant, it does not need to be named on the lease; and the property just needs to be inspected within six months of the commencement of the initial lease, and then at least annually thereafter).
With the right landlord insurance, owners and agents can be confident that if a tenant does not fix any damage that their pet has caused, there is a financial safety net in place (subject to the terms of conditions of cover, of course!).
With this security, landlords may not only be able to rest easier when required to allow pets into their investment property, but may even embrace the idea and go pet-friendly?
If you have questions about pet damage cover in any EBM RentCover landlord insurance policy, reach out to your Relationship Manager. If you are not partnered with us already, be sure to get in touch.
