NSW Tenancy Law Changes 2024: What Landlords Need to Know About the New Reforms
As a landlord in New South Wales, staying on top of legislative changes is crucial to managing your investment effectively. The Residential Tenancies Amendment Act 2024 (NSW), which came into effect on 31 October 2024, brings several key reforms that will impact how you manage your rental property. Here’s what you need to know about the changes ahead.
Reforms Already in Effect (Since 31 Oct 2024)
Rent Increases Limited to Once Per Year
Rent can only be raised once every 12 months and the first rent increase is only allowed after the tenant has been in the property for 12 months. This applies to both fixed-term and periodic leases and includes situations where a new agreement is made with at least one of the original tenants remaining.
No More Fees for Tenant Background Checks
Tenants or prospective tenants can no longer be charged for background checks or lease preparation fees.
Rental Bonds Now Overseen by the NSW Rental Commissioner
The NSW Rental Commissioner has been added to the Rental Bonds Board, an independent body responsible for holding rental bonds.
Further Changes Implemented on 13 Dec 2024
Fixed-Term Rent Increase Provisions Removed
Section 42 of the Residential Tenancies Act 2010 (NSW) used to outline the rules for rent increases in fixed-term agreements. However, this provision is no longer needed because the rent increase rules in Section 41 of the Residential Tenancies Act now apply to both fixed-term and periodic leases.
As a result, Section 42 has been repealed. That said, due to transitional provisions in the Amendment Act, Section 42 will still apply to fixed-term leases under 2 years that were signed before 13 December 2024.
Savings and Transitional Provisions
These provisions outline how changes in the Amendment Act will be gradually introduced into the Residential Tenancies Act. They cover areas like rent payment methods, rent increases, pets, and specific termination notices (including no-ground termination notices).
For example, they explain whether these new rules will apply only to tenancy agreements made after the provisions come into effect, or if they will also affect existing tenancies that were in place before the changes.
Upcoming Reforms (Effective Date to Be Announced)
Changes to Lease Termination Rules
“No grounds” termination notices will be abolished for periodic leases and fixed-term agreements. Moving forward, landlords will only be able to terminate a lease for specific prescribed reasons, including:
| The tenant has breached the tenancy agreement
| The property is being sold or is proposed to be sold
| Significant renovations or repairs are needed
| The property is being demolished
| The tenant no longer qualifies for an affordable or transitional housing program, or student accommodation, or if an employee or caretaker agreement ends
| The property is required for key worker accommodation (e.g., for a teacher, police officer, etc.)
| The property will no longer be used as rented residential accommodation for at least 12 months
| The landlord or a family member (“relevant person”) will live in the property for at least 6 months
Supporting documents may be required when issuing a termination notice, and notice periods will vary based on the type of lease.
Stricter Tenancy Exclusion Periods
For certain termination grounds, re-letting the property within a designated timeframe without approval will be an offence. For instance, if a property is vacated due to a proposed sale, it cannot be re-let within six months without approval from the Secretary to ensure reasons given for termination are genuine.
Tenant Rights to Early Termination
| If a tenant gives a termination notice, they may vacate before the set termination date but must still pay rent until that date.
| If a landlord issues a termination notice, tenants in a periodic lease can leave early and only pay rent up to their departure date.
| For fixed-term leases (except for terminations due to breach or frustration), tenants can request an earlier end date, with a minimum of 14 days’ notice.
Pet Reforms: What Landlords Need to Know
Tenants now have more rights regarding pets. If they apply for permission to keep a pet, landlords must respond in writing within 21 days. If no response is given, permission is automatically granted. Landlords can only refuse for specific reasons, such as the number of animals being too high or the property being unsuitable for pets. If a tenant disagrees with the refusal, they can take the matter to NCAT.
Importantly, pet consent lasts for the duration of the pet’s lifetime while the tenant lives in the property, even if ownership of the property changes. Additionally, rental properties can no longer be advertised as “no pets.”
Changes to Rent Payment Methods
Landlords must offer tenants at least one of the following rent payment options:
| Centrepay
| An approved electronic bank transfer (a free transfer directly from the tenant’s account to the landlord’s or agent’s account)
Landlords cannot require tenants to use third-party payment providers (such as apps that charge fees), though both parties can agree to an alternative method if preferred.
Termination Data Collection
From 1 July 2025 (or earlier if announced), landlords and agents may be required to report the reason for a lease termination, along with supporting evidence, to the Secretary. A summary of this data will be published annually.
How Dimosons Real Estate Can Help with the NSW Tenancy Law Changes
These reforms mark a significant shift in rental regulations, and as a landlord, it’s crucial to stay compliant to avoid legal complications. At Dimosons Real Estate, we’re committed to guiding you through these changes and ensuring your rental property is managed smoothly under the new laws.
If you have any questions about how these reforms affect your rental property or need assistance updating your lease agreements, contact our team Today. We’re here to help make the transition as seamless as possible!
Stay informed, stay compliant, and let Dimosons Real Estate take the stress out of property management.
Helpful links
Visit the links below for more info on leasing in NSW:
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