Rental Market Review – The Market Declines.
Rental values and sales values have declined slightly over the past quarter. Both markets were at their all-time highs during 2024 and the Reserve Bank’s persistent throttling of consumer spending is having the desired effect across many sectors of the economy, including residential real estate.
Major Changes to the Tenancy Act in NSW – It’s now harder for Landlords
On 24 October 2024, the NSW Parliament passed changes to rental laws. Some changes were immediate and most of the others are expected to commence in early 2025.
The Immediate changes to the Act are:
- limiting rent increases to no more than once every 12 months
- prohibiting landlords from charging tenants for background checks
The most important (and relevant to our clients) of the other changes are:
- removing no-grounds evictions for residential tenancy agreements and introducing new grounds for landlords to terminate a lease
- establishing exclusion periods that restrict landlords from signing new tenancy agreements after terminating a lease, unless the Secretary of the Department of Customer Service approves an exemption for re-letting the property
- extending notice periods for terminating fixed-term leases while allowing tenants to give an ‘early exit notice’ to avoid paying double rent for an extended period
- making it easier for tenants to keep pets on rented residential premises
- providing for rent to be paid through convenient and practical methods
The most controversial change is that 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.
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.
Another important change affects the notice periods for ending a tenant’s 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.
The full details of all the changes are well documented on the NSW Government Fair Trading website.
Next Time. Why would anyone delegate the most important job in rentals to a junior? It turns out most agencies do this, including all the ‘big names’, and it does harm their clients.
