NSW Tenancy Law Changes

Our property management department today sent out the following letter to the landlords on our database.

Dear Landlord,

As you are probably aware, the Residential Tenancy Act has been updated this year, and these new regulations will come into force on 31st January 2011. The main changes that are likely to affect you are detailed below:

- Notice periods
o If your tenant is on a fixed term tenancy, which is about to expire, the notice period is going to increase from 14 to 30 days (plus postage time) before the end of the lease.
o If your fixed term has expired, and your tenant is on a continuing tenancy, the notice period to have them vacate increases from 60 to 90 days (plus postage time).
o In both instances, the tenant can now vacate before the date on their termination notice, without giving the landlord any return notice.
o If the tenant gives notice, the amount of notice required will not change
o The notice period for breaches (such as non payment of rent) will not increase.
o If you terminate the tenancy due to non-payment of rent, and the tenant pays the arrears in full, you can no longer proceed with the termination process (unless we can prove the tenant is repeatedly late with rent)
- Water usage
o You will only be allowed to charge tenants for water usage if your property is deemed to be “water efficient”
§ All shower heads must have a maximum flow rate of 9 litres per minute (and have a 3 star water efficiency rating)
§ All cold water taps and single mixer taps for kitchen sinks and bathroom hand basins must have a maximum flow rate of 9 litres per minute (and have a 3 star water efficiency rating)
§ There must be no leaking taps at the commencement of the tenancy or when water efficiency measures are installed (whichever is later)
o You have until January 31st 2012 to bring your property up to standard
o If you pay Sydney Water directly, you must invoice the tenant within 3 months of issue of the bill
o You must give the tenant 21 days notice to pay
- Tribunal
o If you have given your tenant notice to vacate, without any errors in said notice, and they haven’t vacated, the tribunal must now proceed with an eviction order. The exception to this, is if the tenant can prove that the landlord only issued the termination notice as retaliation.
o If your tenant has been issued a termination notice for non-payment of rent, you no longer have to wait until after the termination notice has expired before applying to the tribunal for an eviction order
- Holding Fees
o We can no longer ask for a holding fee/deposit unless an application has been approved
o If you change your mind, you may not rent the property to someone else for the following 7 days
o If the tenant changes their mind, they now lose the full deposit, not a pro-rated amount
- Break Lease Fees
o Currently, we advise tenants that they are liable for rent until a new tenant moves in, and a pro-rated amount for the lease fee and tenancy fee
o Under the new legislation, the default clause (for fixed terms of more than 3 years) is now 6 weeks rent (if the tenancy is less than halfway through the fixed term) or 4 weeks rent (if the tenancy is more than halfway through the fixed term)
o This new clause is optional, and may be profitable for landlords whose properties relet quickly. If your property is hard to rent, it might be better to stick with our current special condition
o Tenants (or their legal personal representative) can break a lease without penalty if they are going into a nursing home, obtain public housing, or dies
- Selling
o If, prior to the commencement of a new tenancy, you decide that you will put the property on the market for sale during said tenancy, you must notify the ingoing tenant beforehand
o The tenant must allow access for sales inspections twice a week
o You must give the tenant at least 14 days written notice before the first sales inspection
o You must give the tenant 48 hours notice for subsequent inspections
- Other
o We can now issue termination notices directly to the tenant’s letter box, and this will save you the 4 days postage time
o It is no longer the tenant’s responsibility to maintain the smoke alarms during the tenancy
o If your property is let to more than one tenant, and one of the co-tenants wants to move out during a continuing tenancy, the co-tenant can now give 21 days notice to vacate
o The tenant no longer has to pay a portion ($15) of the tenancy preparation fee (total cost $33, your share $18)
o It is now illegal to include a carpet cleaning clause (unless there is a pet condition which includes a carpet cleaning clause)

The changes come into effect on the 31st January 2011. If you would like further information, please see Fair Trading’s email and link below. If you have any questions, please contact us and we would be happy to discuss this further with you. Thank you kindly.