Guide to NSW Rental Law Changes for Property Investors

Sydney, NSW – As the property market continues to evolve, so do the laws that govern it. For property investors and landlords in New South Wales, staying ahead of these changes is not just good practice, it’s essential for success. A significant wave of reforms to the NSW rental laws is set to take effect from May 19, 2025, with some changes already in place. This guide will break down these key changes and what they mean for you.

Understanding these new regulations is crucial, not only for compliance but also for making informed investment decisions. As your trusted buyer’s agent, I’m here to help you navigate these changes, ensuring your investments are sound and your landlord practices are up-to-date.

Key Changes You Need to Know

1. Ending “No Grounds” Evictions:

Perhaps the most significant change is the end of “no grounds” evictions. Landlords will now need to provide a valid reason to end a tenancy. This aims to provide tenants with greater security and stability.

• What it means for you: You’ll need to familiarise yourself with the prescribed valid reasons for termination, such as wanting to sell the property, needing it for your own or a family member’s use, or if the tenant has breached the tenancy agreement. Proper documentation will be key.

2. New Rules for Pets:

Renters will find it easier to have a pet in their rental property. Landlords can still refuse permission, but only for specific, justifiable reasons.

• What it means for you: You’ll need to assess pet requests on a case-by-case basis. Valid reasons for refusal might include the property being unsuitable (e.g., no fence for a large dog), strata by-laws prohibiting pets, or concerns about the animal’s welfare. You must respond to a pet request within 21 days; failure to do so will mean the request is automatically approved.

3. Rent Increases Limited to Once Per Year:

This change, which came into effect on October 31, 2024, applies to all new and existing tenancies. Rent can only be increased once every 12 months.

• What it means for you: You’ll need to plan rent reviews more carefully and ensure you’re not increasing rent more frequently than allowed. This provides tenants with more predictable housing costs.

4. No More “Hidden” Fees at Tenancy Start:

Also effective from October 31, 2024, landlords can no longer charge tenants for certain upfront costs. This includes fees for background checks or preparing a tenancy agreement.

• What it means for you: These costs will now need to be absorbed as part of the landlord’s business expenses. Review your current fee structure to ensure compliance.

5. Mandatory Bank Transfer for Rent Payments:

Tenants must now be offered the option to pay their rent via bank transfer. This provides a secure and easily traceable payment method.

• What it means for you: Ensure you have a system in place to accept bank transfer payments from your tenants.

6. Changes to Notice Periods:

Notice periods for ending a tenancy are changing. For example, for a periodic lease, landlords must now give at least 90 days’ notice. For fixed-term leases, the notice period will depend on the length of the lease but will generally be longer than before.

• What it means for you: Familiarise yourself with the new notice periods to ensure you are providing tenants with the correct amount of time to find alternative accommodation.

Preparing for the Changes

As a proactive property investor or landlord, here’s what you can do to prepare:

• Review Your Tenancy Agreements: Ensure your current agreements are compliant with the new laws. Update them if necessary.
• Understand Termination Grounds: Familiarise yourself with the valid reasons for ending a tenancy and the notice periods required.
• Develop a Pet Policy: If you don’t already have one, create a clear policy regarding pets, keeping in mind the new regulations.
• Streamline Rent Collection: Ensure you can accept bank transfers and that your rent collection process is efficient and transparent.
• Stay Informed: Keep an eye on updates from NSW Fair Trading and other relevant bodies.

These changes are designed to create a fairer and more balanced rental market in NSW. While they may require some adjustments, they also provide greater clarity and certainty for both landlords and tenants.

As your dedicated buyer’s agent, I am committed to helping you navigate these changes successfully. My goal is to ensure your property investment journey is not only profitable but also compliant and stress-free. If you have any questions or need guidance on how these changes affect your specific situation, please don’t hesitate to reach out.

Disclaimer: This article provides general information only and does not constitute legal advice. It is recommended to consult with a legal professional for advice tailored to your specific circumstances.

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