Important NSW Legislation Changes
NSW Residential Tenancy reforms are taking place and these changes WILL affect you and the management of your investment property.
As such, we have taken the time to:
- Understand these changes to ensure we meet the new requirements whilst managing your property.
- Create a brief overview below of the changes that we feel will impact you / us the most.
- Provide you with a link to where you can find out more information.
- Explain how we will be adjusting our systems and processes to meet these requirements.
These changes ARE taking place and will be rolled out on the 23rd of March, 2020.
Please take the time to read the following information carefully.
New Smoke Alarm obligations for Landlords
To ensure smoke alarms installed in a rented premises are in working order, a Landlord must:
- Carry out annual checks to ensure all smoke alarms are in working order.
- Replace a removable battery in all smoke alarms in the period specified by the smoke alarm manufacturer or otherwise annually.
- Repair or replace smoke alarms that are not working within 2 days of becoming aware that they are not working.
- Replace a smoke alarm with a new alarm within 10 years of the manufactured date, or otherwise as specified by the manufacturer.
Changes of a ‘minor nature’
If a tenant’s request for a fixture, addition, alteration or renovation is of a ‘minor nature’ then the Landlord must not unreasonably withhold consent (works at tenant expense).
The new regulation includes a list of works that are deemed to be of a ‘minor nature’ and also indicates works that can be requested to be carried out by a qualified person.
Even if the alteration is included in the list, the tenant is still required to seek approval from the Landlord before conducting the works, however, the Landlord must not unreasonably refuse for the work to take place.
Existing requirements on liability for damage and removing any alterations, renovations, additions or fixtures still applies. At the end of a tenancy, the tenant is responsible for leaving the property in the same condition as at the start of the tenancy, apart from fair wear and tear.
New mandatory set break fees for fixed term agreements
Mandatory set break fees will apply to all new fixed agreements of three years or less that are entered into after 23 March 2020. The fees are as follows:
- 4 weeks rent if less than 25% of the agreement has expired
- 3 weeks rent if 25% or more but less than 50% of the agreement has expired
- 2 weeks rent if 50% or more but less than 75% of the agreement has expired
- 1 weeks rent if 75% or more of the agreement has expired
New Material Facts
In addition to the current material facts list, a Landlord or Agent will need to disclose if the property:
- Has been used for the manufacture or cultivation of a prohibited drug or prohibited plant in the last 2 years.
- Is in a strata scheme where scheduled rectification work or major repairs will be carried out to common property during the fixed term of the agreement.
- Is part of a building to which a: notice of intention to issue a fire safety order, or a fire safety order, has been issued requiring rectification of the building for external combustible cladding, or notice of intention to issue a building product rectification order, or a building product rectification order, has been issued requiring rectification of the building for external combustible cladding, or development application or complying certificate application has been lodged for rectification of the building for external combustible cladding.
New Information for Tenants of a Strata Scheme
Before a tenancy agreement is signed, a landlord or agent will need to give a tenant a copy of the strata scheme’s by-laws. They will also need to inform the tenant if a strata renewal committee is currently established for the scheme.
From 23 March 2020, a tenant will be able to end their tenancy agreement by giving at least 14 days’ notice if the Landlord or Agent fails to comply with any of the information disclosure obligations.
Water efficiency measures
For a landlord to be able to pass on water usage charges to the tenant, the residential property must be:
- Separately metered
- Meet the water efficiency measures
- The charges must not exceed the amount payable by the Landlord
The new laws include additional water efficiency measures, including that all taps and toilets on the property need to be checked at the start of a tenancy so that any leaks are fixed. Taps and toilets must also be checked whenever any other water efficiency measures are installed, repaired or upgraded and any leaks fixed.
This requirement applies to existing and new tenancy agreements from 23 March 2020.
From 23 March 2025, all toilets in rented properties must be dual flush with a minimum 3-star rating in accordance with the Commonwealth Water Efficiency Labelling and Standards (WELS) scheme.
- The condition report has been updated to reflect the new laws, including the minimum standards and smoke alarm requirements.
- A condition report can now be provided to tenants electronically.
- A penalty will be imposed if the landlord or agent does not provide a tenant with two hard copies or one electronic copy of the completed property condition report at the start of the tenancy.
- Other notable changes
- Rent increases for periodic tenancies will be limited to once every 12 months.
- A new definition for separately metered to reduce disputes between tenants and landlords about who pays for electricity, gas or water usage charges.
- Changes to make it easier for tenants to get repair orders from the NSW Civil and Administrative Tribunal.
- Clarifying the rules around taking photos and videos during inspections and publishing them to advertise the property for sale or re-lease, especially where the tenant’s possessions are visible.
- Ensuring tenants can access their own personal information held on tenancy databases, without being charged a fee.
Where can you find out more?
PRD is committed to ensuring compliance for you, your tenants and our firm and we appreciate that these reforms will affect the way in which your property is effectively managed by our team.
We understand that we have provided you with significant information both above and via the link, so should you have any queries after reviewing each of these areas, we do welcome your contact with our office.