NSW – Parliament passes the Residential Tenancies Amendment Bill 2024

NSW – Parliament passes the Residential Tenancies Amendment Bill 2024

The Residential Tenancies Amendment Bill 2024 (the “Amendment Bill”) has been passed in the Parliament on 24 October 2024 and is awaiting assent. The Amendment Bill will make several changes to the Residential Tenancies Act 2010 (the “Act”).  The changes are expected to come into effect in early 2025. The Regulations are yet to be released which will contain further detail.

Key changes include:

1. Ending “no-grounds evictions” provisions

A termination notice issued by the landlord must set out the ground for termination. This will bring an end to the “no grounds” evictions where the landlord may terminate an agreement as long as the notice requirement has been complied with.

In terms of the grounds for termination available to landlords, the current legislation allows termination on the basis of a sale of the premises, a breach of tenancy agreement by the tenant, or the non-payment of rent or charges. The Amendment Bill introduces new grounds for termination, including a potential sale, significant renovations, repairs or demolition, tenants no longer being eligible to rent the premises (because of ineligibility to participate in affordable housing scheme, transitional housing program, or ineligibility to reside in premises reserved for student accommodation or for employee or caretaker) and certain changes in the use of the premises such that it is no longer available to be rented (for instance, the premises being required for key worker accommodation, the premises no longer being used as rented residential premises, or the premises being used as the residence of the landlord or family).

The landlord or agent may be penalised if the ground is not genuine, or if they provide false or misleading supporting documents with the termination notice. Furthermore, if a termination notice is issued and the tenancy terminated, but the reason to terminate did not ensue, the landlord may not be able to enter into a new tenancy agreement within a specified tenancy exclusion period without approval of the Commissioner of Fair Trading. For instance, if the landlord terminated the tenancy on the ground of a proposed sale, the landlord is barred from entering into a new agreement within 6 months of the termination date, unless the Commissioner gives approval.

2. Allowing tenants to keep pets with landlord’s consent

A new division will allow tenants to keep animals with landlord’s consent. Upon the application, the landlord must provide a response within 21 days, stating:

• whether the consent is given or refused;
• if consent is given, whether it is subject to conditions and what are the conditions;
• if consent is refused, what is the ground of refusal and why the landlord considers the ground applies.

If the landlord does not provide a response, consent is deemed to be given without conditions.

Where the landlord gives consent with conditions, the conditions must be reasonable, such as requiring the carpet to be professionally cleaned or fumigated. A condition increasing rent or rental bond is an unreasonable condition.

Where the landlord refuses consent, the applicable grounds of refusal include an unreasonable number of animals being kept at the premises, the premises being unsuitable for animals, a likelihood to cause damage to the premises, landlord residing at the premises, a contravention of law or rules and tenants not agreeing to a reasonable condition.

If the tenant believes the condition is unreasonable, or the ground of refusal is inapplicable, they can bring the dispute to NCAT and seek an order to keep pets.

These provisions will be standard terms of residential agreements.

3. Rent increases are allowed once each year for all leases

The current legislative scheme restricts rent increases to once a year with a 60-day notice, except for fixed-term leases of less than 2 years. The Amendment Bill will restrict rent increases to once a year for all kinds of leases, no matter the duration of the term

4. Other amendments to benefit tenants and potential tenants

Under the Act, the landlord and agent must provide the tenant with a method to pay rent that does not incur charges. The Amendment Act further prescribes payment methods that can be offered to tenants, and allows tenants to make selection within any prescribed payment methods.

The Amendment Bill also disallows the costs incurred from background checks to be charged to prospective tenants.

— Coco Chen

© Bugden Allen Group Legal Pty Ltd.All information contained in this article is of a general nature only and you should obtain specific legal advice in relation to any property-related affairs on any of the topics mentioned.