On 10 June the NSW Parliament adopted the biggest change to the State’s residential tenancies law in more than 20 years. Passage of the Residential Tenancies Act 2010 completed a review process initiated five years ago by the then Minister for Fair Trading, John Hatzistergos. Community comment was first sought on an Options Paper that was released in July 2005, followed by a Discussion Paper released by Minister Burney in September 2007, and a draft Bill released by Minister Judge in November 2009.

More than 2,000 submissions were received from individual tenants, landlords, agents, and key interest groups, including NCOSS, in the three rounds of public consultation held during the course of the review. According to the Minister for Fair Trading, Virginia Judge, the new legislation “delivers fairness, balance and social justice to hundreds of thousands of NSW families, whether they are tenants or residential property owners.”

The new Act has not been proclaimed and is thus not yet law. It will come into effect after the necessary supporting regulations have been made. It is hoped this will occur later in the year.

What are the main reforms in the Act?

According to NSW Fair Trading, the key changes in the Act are as follows:

• ‘No grounds’ termination notices: The Act increases the notice given to tenants who are no longer in a fixed term lease from 60 days to 90 days. It also gives landlords certainty of recovering possession through the Tribunal where a tenant does not move out in accordance with a ‘no grounds’ notice.
• Rent arrears evictions: The Act will shorten the time it takes for a landlord to get their application heard by the Tribunal where the tenant is behind in rent. It also gives a guarantee to tenants that their tenancy can continue if their rent arrears are paid or if they follow an agreed repayment plan. However, this guarantee will not apply if the tenant is shown to have frequently failed to pay their rent on time.
• Alterations: The Act gives tenants greater flexibility to add fixtures or make minor alterations at their own expense, provided they obtain the landlord’s consent. Landlords will be able to reasonably refuse such requests, for example, if it involves painting the premises or structural changes.
• Rent payments: The Act will require all tenants be given at least one free and easy option to pay their rent.
• Security of tenure: The Act includes measures to encourage more long-term leases and gives greater protection against eviction for tenants who have lived in the same premises for over twenty years.
• Tenancy databases: The Act limits the type of information that can be listed in a tenancy database and the period of time such information can be kept. It also gives the Tribunal broad powers to resolve disputes about listings.
• Sub-letting: The Act gives tenants greater flexibility to sub-let part of the premises or bring in an extra co-tenant, provided they obtain the landlord’s consent. Landlords will, however, be able to refuse such requests.
• Water efficiency: The Act will require rented premises to be water efficient if tenants of separately metered premises are to pay for water.
• Co-tenant disputes: The Act introduces new measures to resolve disputes between co-tenants or shared households. Victims of domestic violence living in a rented property will have the right to change the locks and seek to take over the tenancy if their name is not already on the lease.
• Goods left behind: The Act will streamline procedures for landlords when dealing with goods left behind when a tenant vacates and introduces more practical methods to help tenants retrieve their goods and personal papers.
• Pre-tenancy: The Act will permit holding fees to be charged only after an application for a tenancy has been approved. It prohibits certain terms from being added to a lease and requires the disclosure of material facts, such as if the landlord has drawn up a contract to sell the property or if a mortgagee has taken court action to recover possession.
• Breaking a lease early: The Act will enable tenants to break a lease early without penalty in certain situations, such as when they accept an offer of public housing or move to a nursing home. The Act also introduces an optional ‘break fee’, fixing the penalty payable in other cases where a tenant breaks a lease early. Where there is no break fee term in the lease the tenant would be liable to compensate the landlord for any loss.
• Sale of rented premises: The Act requires the tenant to be told before a rental property is placed on the market. It obliges the selling agent to make reasonable efforts to agree with the tenant on the days and times the premises will be available for inspection.
• Security and safety: The Act gives guidance as to what is meant by rental properties needing to be ‘reasonably secure’.

For further information, or to register to receive the draft Regulations when they are released: Fair Trading website

What are the main concerns?

The Tenants’ Union of NSW (TU) believes the new Act will generally improve renting laws in NSW but has expressed particular disappointment that landlords will still be able to give ‘no grounds’ termination notices.

The TU’s submission on the draft 2009 Bill and a series of papers on key tenancy law issues is available online:
www.tenants.org.au/publish/tenancy-law-reform

Options to improve the circumstances of boarders and lodgers, who are excluded from the provisions of the Act, are detailed in the NCOSS state election platform Vote 1 Fairness in NSW and will be addressed in more detail in a forthcoming paper by the Tenants’ Union.

This article originally published in July NCOSS News