As a property investor or a tenant, staying informed about changes in rental laws is crucial to ensuring your rental experience continues to thrive and remain compliant. The NSW Parliament has recently passed several important amendments to the Residential Tenancies Act, with many of these changes expected to come into effect in the first half of 2025. These updates aim to improve the rental experience for both tenants and landlords, with a focus on fairness, transparency, and stability in the rental market.
At The Property Collab, we are closely monitoring these legislative changes to ensure you are fully prepared and positioned to make informed decisions for your investment properties. In this blog post, we’ll provide an overview of the key changes, what they mean for you as a property owner, and how you can adapt to ensure continued success and compliance.
1. Removal of “No Grounds” Termination Notices
One of the most significant changes is the removal of “no grounds” termination notices. Under the new legislation, landlords will be required to provide a valid reason when ending a tenancy, whether it’s for a fixed-term or periodic lease. Reasons for ending a tenancy will include situations such as the property being sold, required for major renovations, or if the landlord intends to move into the property.
What does this mean for you?
If you need to end a tenancy, you will need to provide supporting evidence for your decision and ensure that the reason complies with the new requirements. The changes aim to create more stability for renters, but they also mean landlords need to be more strategic and transparent when ending tenancies.
2. Extended Notice Periods for Fixed-Term Leases
For tenants on fixed-term leases, notice periods will also be extended. Previously, landlords could provide 30 days’ notice to end a fixed-term lease; this will now increase to:
- 60 days for leases of six months or less
- 90 days for leases longer than six months
This change ensures that tenants have more time to find suitable accommodation and plan their next steps.
What does this mean for you?
As a landlord, this means you’ll need to provide a longer notice period before a tenant moves out. While this may give tenants more time, it also allows for greater planning and management on your end, helping to minimise vacancies and ensure your property continues to generate a return.
3. Simplified Pet Approval Process
The new legislation will make it easier for renters to keep pets in rental properties. Renters will be able to request permission for a pet, and landlords will only be able to decline requests for specific, justified reasons. If landlords do not respond within 21 days, the pet request will automatically be approved.
What does this mean for you?
While the approval process is now more structured, landlords can still refuse pets if they believe it will cause undue damage or if the property is unsuitable for an animal. As a landlord, it’s important to be aware of the conditions under which you can refuse a pet and ensure that you’re responding promptly to tenant requests to avoid automatic approval.
4. Rent Increases Limited to Once Per Year
Rent increases will now be limited to once per year for all leases, including both fixed-term and periodic agreements. Previously, this rule applied only to periodic leases or fixed-term leases of two years or more.
What does this mean for you?
This change means that you will no longer be able to raise the rent multiple times within a year. It’s essential to plan and account for future rent increases in a more strategic manner, ensuring they align with market conditions while maintaining tenant satisfaction.
5. Rental Property Water Efficiency Standards
Starting in March 2025, rental properties will be required to meet certain water efficiency standards to charge tenants for water usage. This includes ensuring toilets have a minimum 3-star WELS rating and are dual-flush. This is in addition to existing water efficiency measures.
What does this mean for you?
If you’re charging tenants for water usage, you will need to ensure your property meets these new efficiency standards. This is a great opportunity to consider upgrading older fixtures to improve water efficiency, reduce costs, and comply with the new regulations.
6. Additional Fee Restrictions
The new laws also restrict landlords and property managers from charging extra fees at the start of a tenancy, including fees for background checks and preparing a tenancy agreement.
What does this mean for you?
While this change may impact some of the upfront costs associated with leasing your property if managed outside of our agency, this is not something that will affect The Property Collab clients as we do not charge any of our tenants for these kinds of expenses. Overall it will simplify the leasing process and help make it more transparent for both landlords and tenants.
7. Changes to Rent Payment Methods
Rent payments must now be able to be made via electronic transfer or Centrepay, without additional fees. This ensures tenants have access to a simple and cost-effective way to pay rent. If both the tenant and landlord agree, other payment methods can be used.
What does this mean for you?
We currently provide all of our tenants with a free rental payment method including BPAY or Direct Transfer, they are also able to make payments via credit card should that be their preference. These changes will not impact clients of The Property Collab as we have provided our tenants with free rental payment methods for years.
How Can You Prepare?
These upcoming changes to rental laws in NSW provide a clear roadmap for greater fairness and consistency in the rental market. While these updates may require some adjustments in how you manage your investment properties, they also present an opportunity to enhance the relationship with your tenants and improve the overall tenant experience.
At The Property Collab, we are dedicated to helping property investors like you navigate these changes seamlessly. Whether you need assistance with understanding the new legislation, adjusting your lease agreements, or ensuring compliance with water efficiency standards, we are here to support you every step of the way.
Let Us Help You Stay Ahead of the Curve
Are you ready to ensure your investment properties are fully compliant and positioned to benefit from the upcoming changes to rental laws? At The Property Collab, we specialise in providing expert property management services with a focus on maximising your return on investment and minimising risks.
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Stay Informed
We’ll continue to monitor these legislative changes closely and provide updates as they come into effect. Stay tuned to our blog for more insights and tips to keep your investment property in top shape.
At The Property Collab, we are committed to helping you maximise your property investment while ensuring full compliance with evolving legislation. Let’s work together to ensure your property remains profitable and protected in 2025 and beyond.