If you are a landlord or a tenant, you should be aware that the new Residential Tenancies Act 2010 and its associated regulation, the Residential Tenancies Regulation 2010, commenced on 31 January 2011. The new Act represents a major reworking of the NSW residential tenancy legislation and introduces numerous changes to the 1987 Act.
KEY CHANGES
There are over 100 areas of reform in the new Act. The main issues affecting both landlords and tenants are:
- Notice period by landlord to tenant to terminate a lease (periodic tenancy) – increased from 60 days to 90 days. Once notice has been given tenants may vacate at any time (s 85)
- Notice period by landlord to tenant to terminate lease (fixed tenancy) – increased from 14 days to 30 days. Once notice has been given tenants may vacate at any time (s 84)
- Unpaid rent – a landlord must accept payment of unpaid rent from a tenant if the landlord has given a termination notice on the grounds of failure to pay rent and the tenant has not yet vacated the premises (s 89)
- Rental bonds – the maximum bond which can be requested is 4 weeks rent, regardless of whether the property is furnished or not (s 159)
- Fee-free rent payments – tenants must be given at least one method of paying the rent which does not incur additional fees, for example by a direct deposit (s 35)
- Water usage – if the tenant is to be charged for water usage, rental premises must be separately metered and equipped with water efficiency measures (s 39)
- Sale of rented premises – prior to the placement of a notice for the sale of the property 2 weeks written notice must be given to the tenant. Up to 2 inspections per week are permitted, and further access can be negotiated between the tenant and the landlord (s 53)
- Sub-letting –the landlord’s consent is still required for a tenant to bring a new co-tenant into the property (s 74)
THE EFFECT OF CHANGES ON LANDLORDS
Prior to its enactment, the Residential Tenancies Bill 2010 was labelled “the biggest attack on landlords in NSW’s history” by the Property Owners Association of NSW. However, despite most of the changes to the 1987 Act favouring the tenant, some processes have been made easier for the landlord in the new legislation. Key changes affecting landlords specifically are:
- Service of notices – hand delivery of notices directly to the tenant’s letterbox (rather than registered post) is now an acceptable form of delivery. The landlord may also now apply to the CTTT for a hearing date at the same time as serving the eviction notice (s 223)
- Top-up of rental bonds – landlords can no longer request that the bond be ‘topped up’ if the rent has increased during the course of a tenancy (s 161)
- Unclaimed goods – landlords are no longer required to advertise in relation to unclaimed goods or move and store such goods left by a tenant in residential property. However, notice that the goods will be disposed of must be given either in writing, by post or orally in person or by telephone (s 127)
- Lodgement of rental bonds – additional time has been granted to both landlords and agents to lodge bonds with the Rental Bond Board (s 162)
- Disclosure – landlords must disclose if the bank has served any repossession or foreclosure notice, or whether the property has a sales agency agreement (s 26)
THE EFFECT OF CHANGES ON TENANTS
The Tenants’ Union of NSW believes that the changes will generally improve renting laws throughout the state. Key changes to the legislation affecting tenants specifically are:
- Recovery of bank charges – tenants are now required to pay any charges relating to bounced cheques for payment of rent presented to the landlord’s bank (s 48)
- Holding fees – can only be charged once the tenant’s application has been approved. The tenant will lose the entire fee if they withdraw (s 24)
- Break fee – a fixed penalty can now be applied for a tenant who seeks to break the lease prematurely, ie. within the lease term (s 107)
- Domestic violence – victims of domestic violence will have the right to change the locks to exclude the person listed on an Apprehended Violence Order (ADVO) and to seek to take over the lease of the premises if their name is not already on the lease
- Early release without penalty – tenants are now permitted to end the fixed term agreement on any of the following grounds (s 100):
- If they accept an offer of public housing
- If they accept a place in an aged care facility
- If the landlord has notified the tenants of the intention to sell the premises and did not disclose the proposed sale before entering into the residential tenancy agreement
- A co-tenant (or former co-tenant) is prohibited by an AVO from having access to the premises
- Rights of co-tenants – disputes between co-tenants can now be brought in front of the Consumer, Trader and Tenancy Tribunal (CTTT). Co-tenants can give 21 days notice to terminate the agreement outside of the fixed term (s 101)
- Vacating premises – tenants will no longer be forced to have carpets professionally steam-cleaned when vacating premises.
- Tenant databases – more effective regulation.
LAUREN DRAGICEVICH
Law Clerk
Litigation and Dispute Resolution
