Blink Property
Some are calling it a “historic win for renters.” After years of pressure from housing advocates, the Residential Tenancies Amendment Bill 2024 has made it through the NSW parliament, passing into law some changes aimed at protecting tenants.
But not everyone is convinced, with plenty of renters saying the changes are either ineffective, or too late. Meanwhile, investor groups fear that reforms that restrict landlords, rather than incentivise investment, will lead to investors exiting the market and taking further rental supply out of play.
Let’s break down the key changes.
The legislation will mean the end of “no grounds” evictions. Under the new rules, landlords will now be required to provide a legitimate reason to end a tenancy. Valid grounds for ending a tenancy now include breach of lease terms, intent to sell, major renovations or demolition, personal use of the property by the landlord or their family, and circumstances where the property will no longer be available as a rental. In many cases, landlords will need to provide evidence, with some situations also subject to a re-letting exclusion period.
To put it simply, the rules are an attempt to stop landlords evicting tenants simply to increase their asking rent, which will therefore mean more security and certainty for renters who will know they can’t be suddenly shunted for no apparent reason.
It sounds positive, but there is some scepticism, including from the Tenants’ Union of NSW, who believe some landlords may attempt to bend the rules by claiming they need to sell, before later pulling the property off the market and re-letting. Their other concern is that a landlord may avoid repairs or maintenance, only to then claim major renovations are needed and evict the tenant that way.
Under the changes, renters now have the right to request permission to keep pets, but landlords can still deny these requests for certain, approved reasons. If a landlord doesn’t respond within 21 days to the request, permission is granted automatically. In cases where a renter disagrees with a landlord’s refusal, they can appeal to the Tribunal.
However, the Tenants’ Union argued that it shouldn’t be up to tenants to challenge refusals at the Tribunal, which can be a long, arduous process in a market where they may need to move quickly to secure a home for their animal.
For tenants with pets applying for a rental in a competitive market like the current one, it would still be easy for landlords to accept a different applicant, without needing to expressly refuse an applicant because of their pet.
A headline aspect of the bill from a politician’s perspective is that landlords will now be restricted to one rent increase per year. This would put a stop to those on 6 month leases being slugged twice a year or to protect tenants whose initial leases have ended and are now on a rolling rental agreement.
Most tenants are on 12 month leases, which means they are already in a position where their landlord can only raise rent at the end of each lease.
The other factor is that most of the serious rent raising has already been done in NSW. Consecutive years of 20% plus increases in the state’s asking rents have seen to that. Now, it’s a case of too little, too late as the market appears to have peaked. A recent study by PropTrack showed 60% of Sydney suburbs had now seen rental decreases in the past quarter.
On top of the rental increase cap, the government has also banned background check fees and ensured free, accessible payment options for renters, which gives some financial and administrative relief to people trying to find a rental.
Property investors who have had a bad experience with tenants would know how hard it can be to evict people regardless, let alone now that the legislation will favour tenants in many more cases.
Some investors may feel they shouldn’t be the ones getting clamped down on, especially by a government they believe has created the rental crisis in the first place by failing to deliver enough housing for people to live in.
If landlords decide to sell their properties and leave the market, those assets will in some cases be bought by owner occupiers, which will mean even less supply of available homes for tenants. This could tighten vacancy rates further and lead to fresh hikes to asking rents.
