Residential Tenancy Act 2011

Renting laws are changing


The Residential Tenancies Act 2010 was passed by

Parliament in June 2010. The Act and its associated

Regulation will commence on 31 January 2011. Until

then, the existing laws continue to apply.

 

Main objectives

The Act aims to:

? fairly balance the rights and obligations of tenants

and landlords

? modernise and update the law in line with current

practices

? reduce the level of disputes, by providing greater

clarity and certainty in the legislation.

NSW Fair Trading has examined the tenancy laws

in place in other States and Territories to identify

best practice approaches that have been successful

elsewhere, and these have been adopted in the Act in a

range of different areas.

 

Key changes

The new laws will deliver important protection for tenants

and landlords when they commence on 31 January 2011.

Some of the key improvements are as follows.

 

Tenants get more time to move out

If a tenant is no longer under a fixed term agreement

and the landlord wants the tenant to move out ‘without

grounds’, the notice period increases from 60 to 90 days.

If notice is given by a landlord just before the end of the

lease, the notice period increases from 14 to 30 days.

 

Certainty for landlords

If a tenant no longer on a lease does not move out

after being given a ‘no grounds’ notice to vacate, the

Consumer, Trader and Tenancy Tribunal must terminate

the agreement and return possession of the property to

the landlord. The only exception to this is if the tenant

can show that the notice was retaliatory.

 

Mechanism to save tenancies

If a tenant catches up on overdue rent, or follows a

repayment plan agreed with the landlord, termination

action will be cancelled. This will not apply if the tenant is

shown to have frequently failed to pay their rent on time.

 

Faster rent arrears eviction process

Landlords will be able to cut 2 weeks from the eviction

process by applying to the Tribunal for orders at the

same time as giving a termination notice to the tenant.

 

Alterations

A tenant will still need their landlord's written approval if

they want to make a minor change to the premises, such

as installing child safety locks on windows. Landlords

will need to be reasonable, but will be able to say no if

the tenant wants to paint the premises, make structural

changes or do something that would be difficult to

remove.

 

Rental bonds

The maximum amount of rental bond that can be

charged will be 4 weeks rent, regardless of whether or

not the place is furnished. Landlords will not be allowed

to request or receive any bond ‘top–ups’ during the

course of a tenancy. The time period for landlords and

agents to lodge bonds has been extended.

 

New process for goods left behind

Procedures for landlords and agents dealing with

goods left behind when a tenant vacates have been

streamlined. Rubbish and perishable items will be able to

be disposed of immediately.

 

Fee–free rent payments

Under the new law, every tenant must be given at least

one fee–free way to pay their rent. At the same time,

tenants will be required to pay the landlord’s costs if a

cheque for rent bounces or if a direct debit payment is

dishonoured.

 

Water efficiency

Rented premises must be water efficient if tenants of

separately metered premises are to pay for water usage.

 

Letterbox service of notices

There will be an additional option for serving notices – by

hand delivery to a person's letterbox.

 

Holding fees

Holding fees will only be able to be charged once a

tenancy application has been approved. If the tenant

pulls out after paying a holding fee they will lose the

whole fee rather than a pro–rata amount.

 

 

 

Improved disclosure

Before a lease is signed, prospective tenants will be

required to be told certain things, such as if the landlord

has drawn up a contract to sell the property or if a

bank or other lender has started court action to recover

possession of the premises.

 

Optional lease ‘break fee’

Landlords will have the option of including a fixed penalty

in the lease (a break fee), in the event that a tenant

breaks a lease before the end of the fixed term period.

Where there is no such penalty in the lease, the tenant

will still be liable to compensate the landlord for any loss.

 

Additional grounds for eviction

Landlords will be able to apply to the Tribunal to end

a tenancy if the tenant uses the premises for an illegal

purpose or if they threaten, abuse, intimidate or harass

the landlord or agent.

 

Breaking a lease early

Tenants will be able to end a fixed–term lease in certain

situations, such as when they accept an offer of public

housing or need to move to a nursing home.

 

Sale of rented premises

Selling agents must make reasonable efforts to agree

with tenants on the days and times the premises will be

available for inspection. Two inspection periods each

week will be allowed, and the parties can negotiate if

more access is required.

 

Sub–letting

If a tenant wants to sub–let part of the premises or

bring in an extra co–tenant, they will still need the

landlord’s written approval first and landlords will need

to be reasonable when considering such requests. It

will be reasonable to refuse if the person is listed on a

tenancy database or if an extra person would result in

overcrowding.

 

Rights of co–tenants

Some disputes between co–tenants in shared

households will be able to be taken to the Tribunal. Once

a fixed–term lease ends, a co–tenant can give 21 days

notice to end their contract with the landlord. This will

bring an end to their liability for future rent, damage etc.