As a property investor it is important to stay abreast of changes to rental laws. Whilst your property manager will be across these, being aware of such laws can help you to ensure you (1) select the best possible investment, (2) manage your property appropriately, and (3) ensure optimum rent.
If you like to invest in different states, understanding the different laws in each state and what this could mean to you in terms of costs, is also important.
Overview of changes
On 24 October 2024, the NSW Parliament passed major reforms to residential tenancy laws through the Residential Tenancies Amendment Act 2024.
The changes include:
- requiring landlords to provide a reason to end a lease – ending ‘no grounds’ terminations for renters
- making it easier for renters to keep pets in their homes
- limiting rent increases to once per year
- prohibiting extra charges, including fees for background checks and for preparing a tenancy agreement
- ensuring renters can pay rent for free by bank transfer or Centrepay.
Changes that have already started
Two important changes commenced on 31 October 2024.
| Rental laws | Key changes |
| Background checks and other charges | Tenants must not be charged any extra charges when searching for, applying for or starting a tenancy, including fees for background checks and preparing a tenancy agreement. More information can be found on the Fair Trading website. |
| Rent increases | Rent increases can only be made once per year for all leases. Previously, only periodic leases and fixed-term leases of two years or more had this rule. It now applies to all leases. Different rules apply for fixed-term leases of two years or less that were entered into before 31 October 2024. More information can be found on the Fair Trading website. |
It is your responsibility to understand how these changes apply to your business operations. Penalties will apply for noncompliance.
Changes starting in 2025
Further changes are expected to start in the first half of 2025 (dates to be confirmed).
| Rental laws | Key changes |
| End of a tenancy | Landlords will need a reason to end a tenancy for both periodic and fixed-term leases. If the landlord wishes to end a lease, evidence must be provided with a termination notice, with penalties payable by landlords who give a reason that is not genuine. |
| Notice periods for fixed-term leases | The amount of notice a renter must have before their lease ends will increase for renters in a fixed-term lease from 30 days to 60 days if the lease is 6 months or less, or 90 days if the lease is more than 6 months. |
| Keeping a pet | It will be easier for renters to have pets in their home. A renter will be able to apply to keep a pet, with the landlord only able to decline for certain reasons. |
| Payment of rent | Landlords and agents will be required to offer a free and convenient way to pay rent that is electronic and without additional fees. |
No grounds eviction and how good investors can mitigate this risk
New regulations are being developed by Government
- supporting information required for new grounds to end a tenancy
- the application form for consent to keep a pet
- how the data will be collected about the reasons a tenancy ended.
