Changes to Rental Laws in NSW

Rent increase caps, no ground termination, prescribed grounds, new pet reforms.

On 15 October 2024, the Residential Tenancies Amendment Bill 2024 (RTA Bill) was introduced into Parliament. On 24 October 2024, the Residential Tenancies Amendment Bill 2024 (RTA Bill) was passed by both houses of the NSW Parliament.

The Bill is currently awaiting assent (ie. consideration by the Governor), and we anticipate consequential amendments to the Residential Tenancies Regulations. The RTA Bill brings significant changes to rental laws in NSW.

Here are the high-level changes you need to know about:

Termination notices:

No grounds termination notices for periodic agreements will be abolished and landlords will only be allowed to terminate a periodic and fixed term tenancy on prescribed grounds. The grounds prescribed in the RTA Bill are:

• breach of tenancy agreement
• actual or proposed sale of the premises
• significant renovations or repairs
• demolition
• the premises is required for key worker accommodation
• the premises will no longer be used as rented residential premises
• the landlord or family will reside at the premises

The RTA Bill introduces “tenancy exclusion periods” where it is an offence for a landlord, who issues a termination notice on a prescribed ground, to re-let a property within a designated timeframe unless they have obtained the Secretary’s approval. The RTA Bill makes changes to the termination notice periods.

The Residential Tenancies Regulation 2019 (NSW) (Regulation) may require the landlord to give supporting documents or information when they issue a termination notice.

The RTA Bill contains provisions allowing tenants who are given a termination notice by a landlord, or who give a termination notice, to vacate a premises early.

Changes to the laws on pets:

If passed, the RTA Bill allows tenants to keep pets in rental properties with the landlord’s consent, where tenants have used an approved form for consent.

The landlord will have 21 days to respond to the tenant’s pet application, in writing, otherwise consent will be deemed to have been granted without conditions.

Landlords will only be permitted to refuse consent on certain specified grounds (including overcrowding of animals at the premises, unsuitability of the property, potential damage that would cost more to fix than the rental bond, where a landlord lives at the rental property, legal restrictions and where a tenant refuses to agree to the landlord’s reasonable conditions).

Consent may be granted subject to “reasonable conditions” (for example, preventing certain types of animals to be kept indoors, end of lease professional carpet cleaning (if reasonable for the type of animal and premises), and professional fumigation (for a mammal) if the animal is kept indoors, other reasonable conditions specific to the keeping of the animal at the premises, type of animal and the premises, and as prescribed by the Regulation.

Certain conditions are prescribed to be “unreasonable”, including increasing rent or the rental bond, requiring a form of security, or a condition which is a prohibited term under the lease or prescribed by the Regulation to be unreasonable. Disputes over pet consent can be taken to NCAT.

Provisions relating to consent to keeping an animal in a rental property will automatically form part of a residential tenancy agreement.

Other proposed changes:

Rent will only be able to be increased once every 12 months regardless of the type of lease (fixed term or periodic).

In addition to the proposed changes mentioned above the following are amendments that were subsequently agreed in Parliament that we thought you should be aware of:

• Changes to the laws on pets:

A property cannot be advertised as ‘no pets’

It is a term of every residential tenancy agreement that a consent to a pet is effective while the tenant resides in the premises for the lifetime of the animal even if there are changes to the landlord, landlord’s agent or residential tenancy agreement.

• Other proposed changes:

The Secretary must collect data on the grounds used by landlords to give termination notices, including the evidence given by landlords. Each year, a summary of the data collected must be published on the Department’s website.

When will the reforms take effect?

Some rent reforms will commence on the date of assent, others will commence on 1 July 2025 or a date yet to be proclaimed.

Rest assured, we will keep you updated on when the reforms commence as the RTA Bill progresses.

Source: REI NSW