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Jun24

Changes to NSW residential tenancy laws

Amanda Quin - Thursday, February 06, 2020

 

 

Blog authored by Andrew Cannon  - contact email: aac@peacockes.com

Recent and Upcoming Changes to NSW residential tenancy laws

There were significant changes to residential tenancy laws in NSW in 2019 relating to victims of Domestic Violence.

From 23 March 2020 other changes to the residential tenancy laws regarding a number of significant matters will commence, including the newly enacted Residential Tenancies Regulation 2019 (NSW) (“2019 Regulation”). As well as amendments to the Residential Tenancies Act 2010 (NSW) (the "Act") which are set out in the Residential Tenancies Amendment (Review) Act 2018 ("Review Act").

2019 Amendments relating to domestic violence

In NSW, one of the strongest undercurrents for change to residential tenancy laws was aimed towards availing greater protections for victims of domestic violence. As such, a victim of domestic violence may obtain a declaration by a competent person which will allow victims of domestic violence to terminate their tenancy immediately and without penalty from the landlord. Tenants, who are victims of domestic violence are also able to be exempted from liability  for property damage committed by a co-tenant, which occurred during the commission of a domestic violence offence.

However pursuant to s 54 of the Act and the 2019 Regulations, who will now be held liable in an event of such property damage remains a grey area, although presumably it would be a co-tenant offender. Nevertheless it could result in a situation where the offender/co-tenant is unable to be located and therefore it may be more difficult for a landlord to hold anyone accountable for such damage.

In any case, it is recommended that landlords check their insurance coverage and ensure that they hold cover for tenant damage.

Domestic violence declaration

A victim of domestic violence who wishes to utilise their rights to terminate their lease due to the domestic violence will need to have one of the following:

* A copy of a certificate of conviction regarding the offender; or

* A copy  of a Domestic Violence Order against the Offender; or

* A relevant injunction against the offender under Section 68B or 114 of the Family Law Act; or

* A declaration by a "competent" person.

Where a victim wishes to utilise a declaration by a competent person, then the declaration needs to be completed by a medical practitioner registered under the Health Practitioner Regulation National Law (NSW). The medical practitioner will need to  have consulted the tenant/victim and if applicable, consulted with any dependent child of the tenant who is the victim of the  domestic violence.

Additional 2020 protections  - Consent from tenant required before publication of photos or visual recordings showing the tenant's possessions

From 23 March 2020, it will be an offence for a landlord or agent to publish a photograph or visual recording of the interior of the residential property, if it shows the tenant’s personal possessions  - unless written consent is first obtained from the tenant. A tenant must not unreasonably withhold consent.

This right applies to all tenants, not just victims of domestic violence.

However this change is aimed at preventing tenants from being inadvertently located by former violent partners.

New rights regarding early termination by tenant - ‘break’ fees

Pursuant to s 34 of Schedule 1 of the Review Act (which will become Section 107 of the Act) applicable to all fixed term leases for a period of 3 years or less, a tenant will be able to break their residential tenancy agreement, subject to payment of a scaled fee to the landlord. The following break fees apply in the following circumstances:

  1. If less than 25% of the fixed term had expired when the premises were abandoned – 4 weeks rent;
  2. If 25% or more but less than 50% of the fixed term has expired when the premises were abandoned – 3 weeks rent;
  3. If 50% or more but less than 75% of the fixed term had expired when the premises were abandoned – 2 weeks rent; and
  4. If 75% or more of the fixed term had expired when the premises were abandoned – 1 week’s rent.

 

New  Minimum standards

Arguably the most significant of the proposed changes includes s 10 of the Review Act (which modifies Section 52 of the Act) – ‘Landlord’s general obligations for residential premises’, which sets out 7 minimum standards for a rented property to be in a reasonable state of cleanliness and be ‘fit for habitation’. Landlords will have to ensure that a rental property is:

  1. Structurally sound;
  2. Have adequate natural light or artificial lighting in each room other than a garage or a room intended for storage;
  3. Have adequate ventilation;
  4. Are supplied with electricity or gas and have a adequate number of electricity outlet sockets or gas outlet sockets for the supply of lighting and heating to and use of appliances in the property;
  5. Have adequate plumbing and drainage;
  6. Connected to a water supply service or infrastructure for the supply of hot and cold water for drinking, washing and cleaning; and
  7. Contain bathroom facilities, including toilet and washing facilities that have privacy.

Further, the Review Act provides a definition that deems when a residential premises is “structurally sound”.

“Structurally sound”

Pursuant to section 10 of the Review Act (which modifies Section 52 of the Act), “structurally sound” is a defined term whereby a residential premises is only considered structurally sound if the floors, ceilings, walls, supporting structures (including foundations) doors, windows, roof, stairs, balconies, balustrades and railings are:

  • in a reasonable state of repair;
  • with respect to the floors, ceilings, walls and supporting structures – are not subject to significant dampness; and
  • with respect to roof, ceilings and windows – do not allow any water penetration into the property; and
  • are not liable to collapse because they are rotted or otherwise defective.

Smoke alarms

All NSW landlords will also have to ensure all smoke alarms installed are in working order and carry out repairs as a matter of urgency or face a penalty by way of a fine if they fail to comply. A tenant who repairs or replaces a smoke alarm (including replacing its battery) will also be entitled to a reimbursement of the costs under the new amendments (but only where the Landlord did not act with reasonable diligence to repair or replace the smoke alarm).

Landlords must also:

  • Carry out annual checks to ensure smoke alarms are in working order;
  • Repair or replace a smoke alarm that is not working within 2 business days of becoming aware that it is not working;
  • Replace an existing smoke alarm with a new smoke alarm within 10 years from the manufactured date or earlier; and
  • Replace a removable battery in all smoke alarms by the period specified by the smoke alarm manufacturer or otherwise annually.

Modification for strata premises: Pursuant to cl 30 (b) of the 2019 Regulations, it may be possible for a landlord to not be liable to replace or repair smoke alarms, but only where  the strata scheme is responsible for the repair and maintenance of smoke alarms in a residential premises and only if the landlord has advised the tenant in writing that the owners corporation are liable for such repair/replacement.

Changes of ‘a minor nature’

The new regulations include a list of alterations, additions or renovations that are considered to be of ‘a minor nature’ in which it would be unreasonable for a landlord to withhold consent, including changes that are required to be carried out by a licenced tradesperson. However, the tenant must still ask for consent first (but the landlord cannot unreasonably withhold consent, except that no alterations, additions or renovations shall be carried out by tenants on properties on the loose-fill asbestos register and/or of a heritage item).

Pursuant to the 2019 Regulation, the following are all considered kinds of alterations of a ‘minor nature’:

  • Securing furniture to a wall of a premise if it is necessary for the safe use of the furniture;
  • Fitting a childproof lock to an exterior gate of a single dwelling;
  • Installing fly screens on windows;
  • Installing / replacing internal windows coverings;
  • Installing child safety gates on the premises;
  • Installing window safety devices for child safety;
  • Installing hand-held shower heads or lower style taps for the purpose of assisting elderly or disabled people;
  • Installing or replacing hooks, nails or screws for hanging paintings and other items;
  • Installing or replacing a carriage service for connecting a phone line or accessing the internet;
  • Planting vegetables, flowers, herbs or shrubs if existing plants do not need to be removed and for shrubs, will not grow taller than 2 metres;
  • Installing wireless removable outdoor security cameras; and
  • Making a modification that does not penetrate a surface or permanently modify a surface, fixture or the structure of the premises.

Rent increases 

Pursuant to section 9 of  Schedule 1 of the Review Act (which amends Section 41 of the Act), rent payable under a periodic lease agreement may not be increased more than once in a 12 month period.

 

Rectification orders

 

Under Division 5A of the Review Act, broader powers are given to Fair Trading NSW regarding the investigation of damage to premises. These broader powers include the ability of Fair Trading NSW to issue rectification orders for both tenants and landlords, as well as assist both tenants and landlords engaged in a rectification order process to resolve disputes (if any) about repairs and damage to a rented residential property.

Similarly, by way of respective applications made by either a landlord or a tenant, Fair Trading NSW investigators will have dual powers to investigate whether a landlord has failed in their duties, pursuant to the Residential Tenancy Act and Review Act, to provide and maintain the property in a reasonable state of repair and ‘fit for habitation’.

Information Statement for landlords

Pursuant to section 7 of Schedule 1 of the Review Act (to become Section 31A of the Act) a new requirement for landlords from 23 March 2020 is the necessity to acknowledge reading an information statement before entering all new residential tenancies agreements. Under that section, a landlord must not enter into a residential tenancy agreement unless the landlord or landlord’s agent has signed an acknowledgment on the approved form of the residential tenancy agreement that they have read and understood the information which sets out the landlord’s rights and obligations under the residential tenancy legislation in NSW.

Condition Reports

The amendments also see stronger compliance and enforcement of condition reports, which have also been updated in a new, approved form applicable from 23 March 2020. The new, approved form for condition reports reflect the 7 minimum standards to be introduced as well as the new laws regarding smoke alarm compliance for landlords.

Pursuant to section 4 of Schedule 1 of the Review Act (to become Section 29 of the Act), the amendment requires that the landlord or the landlord’s agent before or at the time of signing the residential tenancy agreement, give the tenant 2 copies of the condition report; or one electronic copy. Additionally, failure by a landlord or a landlord’s agent will now result in a penalty being potentially enforced. The new form also requires that once provided by a landlord or a landlord’s agent, that the tenant must return 1 copy of the completed condition report to the landlord or the landlord’s agent within 7 days after taking possession of the property and is to keep the other copy or a completed electronic copy.

Any photos or video recordings taken at the time of inspection are to be verified and dated and should be attached to the condition report to be retained. However, any attachments of photographs/video recordings will not be treated as a substitute for accurate written descriptions of the condition of the property.

Information Disclosure by landlord

Presently, under Section 26 of the Act, prior to the tenant entering into a lease, the landlord/agent must give a Tenant Information Statement to the tenant and disclose if the property is for sale or if the landlord has prepared a sale contract and must also disclose if there is any action being taken by a mortgagee to repossess the property.

In addition a landlord/agent must not make any false statements or false representations about the property or make false promises or mislead or deceive anyone as an inducement to them to enter into the lease and the landlord must not knowingly conceal a material fact.

The new amendments will extend this disclosure requirement, such that if the property is part of a strata scheme, then the landlord/agent must provide to the tenant a copy of the by-laws of the scheme prior to the lease being signed and must also advise the tenant of a strata renewal committee has been established.

In addition the 2019 Regulation includes the following as material facts:

 

  • The residential premises have been previously subject to flooding or bushfire within the last 5 years;
  • The residential premises are subject to significant health or safety risks;
  • The residential premises are listed on the Loose Fill Asbestos register;
  • A person has been convicted of a serious indictable offence involving violent conduct that took place at the residential premises in the last 5 years;
  • A person has been convicted of an offence under the Drug Misuse and Trafficking Act 1985 that took place at the residential premises within the last 2 years; and
  • The landlord has been notified by the council or NSW Police that the residential premises has been used for the manufacture or cultivation of any prohibited drug or prohibited plant within the meaning of the Drug Misuse and Trafficking Act 1985 within the last 2 years.
  • The council waste services are different to those that are generally applicable in that area;
  • The tenant will not be able to obtain a residential parking permit (if in an area where paid parking is usually only permitted);
  • The existence of a driveway/walkway that the tenant must share with other persons;
  • Where a strata scheme, that there are scheduled rectification work or major repairs to be carried out on the common property;
  • If there have been any notices issued or DA's lodged regarding combustible external cladding.

 

Under section 28 of Schedule 1 of the Review Act (to become Section 98A of the Act), a tenant may terminate a residential tenancy agreement by giving 14 days’ notice, if the landlord has failed to disclose information required to be provided to the tenant pursuant to Section 26 of the Act.

However, it may be possible for a landlord to revoke the termination notice if the landlord makes an application to the Tribunal prior to the termination date and if the Tribunal is satisfied in the circumstances that the tenancy should continue.

Changes - long term leases

The new residential tenancy laws in NSW include mandatory terms that cannot be modified, excluded or otherwise contracted out of by either a landlord or a tenant for fixed term tenancy agreements for 20 years or more.