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Understanding the Latest Changes to NSW Tenancy Laws

Recent updates to New South Wales rental laws have been introduced under the Residential Tenancy Amendment Act to formalise the rights and responsibilities of both landlords and tenants. As a property owner, it’s important to understand how these changes may affect your investment and how we can help you navigate them effectively. 

These updates, while introducing additional responsibilities for landlords, also create opportunities to reinforce lease agreements and maintain the value of your investment. Below, we’ve summarised the key amendments and what they mean for landlords.

Key Changes to the Residential Tenancy Amendment Act:

Ending ‘No Ground’ Terminations

One of the more notable changes is the removal of ‘no grounds’ terminations. Previously, landlords could end a periodic tenancy without providing a specific reason. Under the updated rules, landlords must now provide a clear, valid reason for ending a lease, whether it’s a periodic or fixed-term agreement. Acceptable grounds include:

  • The property is being sold or offered for sale with vacant possession.
  • The property requires significant repairs or renovations.
  • A family member intends to move in.

While this introduces new parameters for ending a lease, it also brings a level of clarity and consistency to the process for landlords. By providing specific grounds for termination, the updated rules aim to ensure transparency in managing lease agreements.


Pet Ownership Rules

Relaxed rules regarding pets mean landlords can no longer issue a blanket refusal to pet applications. Instead, landlords can only decline pet requests for specific, reasonable grounds such as:

  • The property is unsuitable for the pet (e.g., lack of fencing or space).
  • The pet would exceed the number of allowable animals.
  • The pet is likely to cause damage beyond what the bond could cover.

Importantly, landlords cannot charge higher rent or require larger bonds solely due to pets. This change, taking effect in early 2025, highlights the importance of clear, well-documented lease conditions to protect your asset.


Clarifying Background Check Costs

The legislation now confirms that renters cannot be charged for background checks during the application process. These costs are to be covered by landlords or property managers. While this adds clarity to the process, it’s another reason why working with an experienced property manager is key to streamlining tenancy applications.


Fee-Free Rent Payment Options

Renters must now have access to fee-free methods of paying rent, including bank transfers or Centrepay. These options ensure tenants can manage their payments efficiently, while landlords still receive funds securely.


Water Efficiency Standards – Dual Flush Toilets

From March 23, 2025, if landlords want to pass on water usage charges to the tenant, they  will be required to meet water efficiency standards by installing dual flush toilets (minimum three-star rating) in rental properties. If you’re planning renovations or property upgrades, we recommend considering these requirements now to ensure compliance without last-minute costs.

We have carefully investigated this requirement for all our landlords and will make direct contact with you if this change affects your property.


Limiting Rent Increases to Once Per Year

The existing rule limiting rent increases to once every 12 months continues to apply to periodic and fixed term lease agreements. This offers tenants greater cost predictability but reinforces the importance of conducting annual market reviews to ensure your property’s rent remains competitive and inline with the market to achieve the best outcome from your investment.


Minor Alterations by Tenants

The updated laws allow tenants to request certain minor, non-structural modifications to the property. These changes can include:

  • Securing furniture for safety.
  • Installing childproof latches, safety gates, or window devices.
  • Hanging pictures or adding small garden plants.

While tenants must cover the costs unless otherwise agreed, landlords can still ensure that any alterations meet reasonable conditions and are reversible at the end of the tenancy.


Looking Ahead

The upcoming changes to New South Wales tenancy laws reflect the need for clearer, more structured guidelines in the rental market. While some of these updates introduce new obligations for landlords, they also provide opportunities to strengthen lease agreements and protect property value.

At Flemings, we’re here to support you in understanding and managing these changes. Our team can help ensure your property complies with the new regulations while safeguarding your investment and keeping tenants satisfied.

If you have any questions or need assistance preparing for these changes, feel free to reach out to us or contact your local Property Manager for more information.

Stay tuned for more updates as the implementation of these laws progresses!