There have been some changes made to the Residential Tenancy Act NSW, so I thought that I would catch you all up on what these changes will be.  I will be doing a new blog series on these changes and how our office sees that they will affect you as an investor in the NSW market.  Whilst I am writing from the perspective of my office, I am aware that many of our landlords have properties in other locations as well, so please keep in mind that these changes are for all NSW properties.

There are major changes and I will give you the gist of what you need to know in this blog and will then do a further blog on each issue individually, to ensure that you are up to date with everything that is going on.

I was working in the world of property management when the last raft of changes went through and I cannot actually believe that happened 10 years ago!  I remember feeling like the world was going to end back then, because I thought that the changes were so huge.  This time around, as I have already been through this experience in the past, I feel like things are going to run quite smoothly and we will be able to ensure that the changes happen for you with a minimum of fuss.  Be warned though, there are changes that almost every landlord is going to have to make of some form or another.

Without further ado, let’s get into it…

1 – Property must be fit for habitation

This sets out minimum standards for being able to rent out a property and is aimed squarely at slum landlords whose properties are not maintained, or provided in a good condition.  I do not think that there will be any of our landlords who do not already meet these minimum standards for a tenancy.

2 – New smoke alarm obligations for landlords

This is where I feel that we will see the most need for change for our landlords.  The new requirement is that a landlord must have their smoke alarm tested to ensure that it is working on an annual basis.  Our office will be recommending to our landlords that they move to a compliance company to cover off on this requirement, as this is the easiest way for you to know that you are covered.  There are further items to this, but I will cover this off in a separate blog, so that you can be informed of all the requirements.

3 – Changes to the property of a ‘minor nature’

This is something that is already in the Act, but now there will be a list of the items that are considered to be in this list, firming it up and making it less guess work for Agents and Landlords.

4 – New mandatory break lease fees for fixed term agreements

Can I just tell you all that this is the change that has me most up in arms.  The changes to the break lease for fixed term tenancies means that it is easier for a tenant to break a fixed term agreement and the current 4 or 6 week fee has been abolished and have been replaced by much softer charges. Not happy Jan – on behalf of all my landlords, this one is the pits!

5 – Strengthened Disclosure Requirements

There are currently disclosure requirements for our landlords, but these changes see the obligations strengthened.  This change will include measures for new material facts to be disclosed including that a landlord must disclose if the property has been used for the manufacture of drugs – and lets be honest, none of us would want to move our family into a property that has been used for this sort of thing without our knowledge!  There are also new strata disclosure requirements as well, requiring a tenant to be provided with the strata by laws for the complex.  There will be measures written in to the new Act that provide for a tenant to break their lease with 14 days notice, if these disclosure items have not been adhered to when the tenant signs a lease.

6 – Water efficiency measures

There are already measures in place, stating that a landlord cannot charge for water unless the property has been made water efficient.  The new laws will state that for all new tenancies, a landlord will have to ensure that there are no leaking taps or toilets on the property and the water efficiency measures will need to be tested by a plumber.  This will mean that you will need to send a plumber to your property at the start of every tenancy.  The new laws also state that if a plumber is sent for a leak at the property during the tenancy, that all other taps and toilets on the property must also be checked at the same time, to ensure that there are no leaks on the premises.   This is a big change for most of our landlords, as currently our office has been checking these on your behalf and this change means that we will no longer be able to do this and the work will be given to a plumber, to ensure that you are compliant with the new laws.

There are also changes coming in with regard to dual flush toilets being a requirement, but these changes have a grace period till 2025, so our office will address these issues and give you further information on this when we provide our separate blog on the full changes to the water efficiency measures.

7 – New rectification order process

From 23 March 2020, NSW Fair Trading will have new powers to resolve disputes between tenants and landlords over repairs and maintenance and property damage. This includes the ability to issue rectification orders. The rectification order process will support tenants and landlords to resolve disputes about property repairs and damage in a tenancy by working with Fair Trading.

Landlords will be able to apply to Fair Trading to investigate whether a tenant has caused or allowed damage to the property and has refused or failed to repair, or not satisfactorily repaired, the damage without a reasonable excuse.

Tenants will be able to apply to Fair Trading to investigate whether the landlord has failed to provide and maintain the property in a reasonable state of repair.

A landlord or tenant must first make a written request to the other party to try and resolve the issue and can then apply to Fair Trading if the issue is not resolved.

Other changes…

Rent increases for periodic (continuing) leases will be limited to once every 12 months

A new definition for separately metered to reduce disputes between tenants and landlords about who pays for electricity, gas or water usage charges

Changes to make it easier for tenants to get repair orders from the NSW Civil and Administrative Tribunal

Clarifying the rules around taking photos and videos during inspections and publishing them to advertise the property for sale or re-lease, especially where the tenant’s possessions are visible

Ensuring tenants can access their own personal information held on tenancy databases, without being charged a fee

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

Keep an eye out on my page for updates on each of these items, as I will be doing a blog post for each individual change that is coming in as well as this overview.  If you have questions with regard to these changes you can go to the NSW Fair Trading website https://www.fairtrading.nsw.gov.au/about-fair-trading/legislation-and-publications/changes-to-legislation/new-residential-tenancy-laws