NEW RENTAL REFORMS – 2025

As we head into the New Year, there are a raft of changes to the NSW tenancy laws that are going to affect every landlord. In this newsletter I will provide an overview of the changes and in the coming months I will follow this up with some video on each change individually. The following list of changes has been copied directly from NSW Fair Trading website, to ensure that there is no confusion around what the new laws will be.

· Summary of the changes

· Background checks

The changes make it clear that a renter cannot be charged for a background check when they’re applying for a rental property.

· Rent increases

Rent increases can only be made once per year for all leases.

Previously, only periodic leases and fixed-term leases of two years or more had this rule. The rule now applies to fixed-term leases under two years.

· End of a tenancy

Landlords will need a reason to end a tenancy for both periodic and fixed term leases.

This will include reasons such as:

The existing rules where the renter is at fault, because of a breach of lease, damage to the property, or non-payment of rent.

The property is being sold or offered for sale with vacant possession.

The property needs to be empty for significant repairs or renovations or the property will be demolished. 

The property will no longer be used as a rental home, for example, it will instead be used for a business.

The landlord or their family intend to move into the property.

The renter lives in the property as part of their employment and their employment has ended.

The renter is no longer eligible for an affordable or transitional housing program or the property is purpose-built student accommodation and the renter is no longer a student.

The property is part of a key worker housing program and needs to be used by a key worker, like a teacher, health worker or police.

If the landlord wishes to end a lease, evidence must be provided with a termination notice, with penalties payable by landlords who give a reason that is not genuine.

These changes to the way a tenancy ends will start in the first half of 2025.

· Notice periods for leases ending

The amount of notice a renter must have before their lease ends will also increase for renters in a fixed-term lease.

The notice will increase from 30 days to:

60 days, if the lease is six months or less, or

90 days, if the lease is more than six months.

There will be no change to notice periods for those on periodic agreements.

These longer notice periods will provide renters with much needed additional time to find a new home. 

These changes to notice periods will start in the first half of 2025.

· Keeping a pet

The new laws will make it easier for renters to have pets in their home. A renter will be able to apply to keep a pet, with the landlord only able to decline for certain reasons.

Landlords will need to respond to a pet request within 21 days. If they do not respond, the pet will be automatically approved.

Landlords will be able to refuse the pet if:

There would be too many animals at the property.

The property is unsuitable for the animal because of the fencing, or lack of open space, or because it would harm the animal’s welfare.

The animal is likely to cause more damage than the bond could repair.

The landlord lives at the property.

The animal would break other laws, local council rules, strata or community scheme by-laws, or a residential community rule.

The renter did not agree to a reasonable condition for keeping the animal.

There will be limits on the kinds of conditions a landlord may ask for. For example, a landlord will not be able to ask a renter to increase the bond or the rent as a condition for allowing the pet. 

It is also important to note that strata by-laws that ban all pets are not valid, and cannot be used to refuse a pet.

If a renter disagrees with a decision, they will be able to apply to the NSW Civil and Administrative Tribunal.

We will no longer be able to advertise a property as ‘No Pets’

These changes to keeping pets in rental homes will start in the first half of 2025.

· Payment of rent

Property owners and agents will be required to offer a way to pay rent that is electronic and without additional fees. Renters will be able to choose a bank transfer method or payment via the Commonwealth Government’s Centrepay.

If both the renter and landlord agree, the renter can choose to pay rent using other options.

Renters cannot be required to use a particular service provider, such as an app, to pay their rent.

These changes to how rent can be paid will start in the first half of 2025.