Key information
- The NSW Parliament passed changes to rental laws on 24 October 2024.
- Some smaller changes have started. Most changes are expected to start in early 2025.
- You can stay up to date with the progress of the changes by signing up for the NSW Fair Trading Property Matters newsletter.
What is changing?
On 24 October 2024 the NSW Parliament passed the Residential Tenancies Amendment Bill 2024. The legislation is now the Residential Tenancies Amendment Act 2024 (the Act).
The Act delivers on the NSW Government’s commitment to improve rental laws to support renters, landlords and the community. It sets up better renting rules that will help give more stability for renters and certainty for landlords.
The changes include:
- ending ‘no grounds’ terminations for renters
- making it easier for renters to keep pets
- limiting rent increases to once per year
- clarifying that renters cannot be asked to pay for background checks
- ensuring renters can pay rent by bank transfer or Centrepay.
Jump to Summary of the changes for more information in each change
Why are rental laws changing?
The proposed changes to rental laws will progress the NSW Government's election commitments to make renting in NSW fairer and to provide more protections for renters.
These reforms follow extensive public consultation through the NSW Government’s Have Your Say platform in 2023 and targeted consultation with renters, landlords, tenant advocates, real estate and industry stakeholders.
When will the changes start?
Not all of the changes will start at the same time.
Some changes started on 31 October 2024. These include:
- only one rent increase per year
- no fees for background checks.
Other reforms, including changes to require a reason to end a lease (ending no grounds terminations) and making it easier for renters to keep pets, are expected to commence in the first half of 2025, once supporting regulations are developed. This gives renters, landlords and the sector some time to prepare for the changes.
How will the changes be implemented and enforced?
Changes will be enforced by NSW Fair Trading. A new Rental Taskforce has been created within Fair Trading with dedicated inspectors and compliance officers who will focus on preventing and responding to breaches of rental laws.
Summary of the changes
Background checks
The changes make it clear that a renter cannot be charged for a background check when they’re applying for a rental property.
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. The rule now applies to fixed-term leases under two years.
End of a tenancy
Landlords will need a reason to end a tenancy for both periodic and fixed term leases.
This will include reasons such as:
- The existing rules where the renter is at fault, because of a breach of lease, damage to the property, or non-payment of rent.
- The property is being sold or offered for sale with vacant possession.
- The property needs to be empty for significant repairs or renovations or the property will be demolished.
- The property will no longer be used as a rental home, for example, it will instead be used for a business.
- The landlord or their family intend to move into the property.
- The renter lives in the property as part of their employment and their employment has ended.
- The renter is no longer eligible for an affordable or transitional housing program or the property is purpose-built student accommodation and the renter is no longer a student.
- The property is part of a key worker housing program and needs to be used by a key worker, like a teacher, health worker or police.
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.
These changes to the way a tenancy ends will start in the first half of 2025.
Notice periods for leases ending
The amount of notice a renter must have before their lease ends will also increase for renters in a fixed-term lease.
The notice will increase from 30 days to:
- 60 days, if the lease is six months or less, or
- 90 days, if the lease is more than six months.
There will be no change to notice periods for those on periodic agreements.
These longer notice periods will provide renters with much needed additional time to find a new home.
These changes to notice periods will start in the first half of 2025.
Keeping a pet
The new laws will make it 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.
Landlords will need to respond to a pet request within 21 days. If they do not respond, the pet will be automatically approved.
Landlords will be able to refuse the pet if:
- There would be too many animals at the property.
- The property is unsuitable for the animal because of the fencing, or lack of open space, or because it would harm the animal’s welfare.
- The animal is likely to cause more damage than the bond could repair.
- The landlord lives at the property.
- The animal would break other laws, local council rules, strata or community scheme by-laws, or a residential community rule.
- The renter did not agree to a reasonable condition for keeping the animal.
There will be limits on the kinds of conditions a landlord may ask for. For example, a landlord will not be able to ask a renter to increase the bond or the rent as a condition for allowing the pet.
It is also important to note that strata by-laws that ban all pets are not valid, and cannot be used to refuse a pet.
If a renter disagrees with a decision, they will be able to apply to the NSW Civil and Administrative Tribunal.
These changes to keeping pets in rental homes will start in the first half of 2025.
Payment of rent
Property owners and agents will be required to offer a way to pay rent that is electronic and without additional fees. Renters will be able to choose a bank transfer method or payment via the Commonwealth Government’s Centrepay.
If both the renter and landlord agree, the renter can choose to pay rent using other options.
Renters cannot be required to use a particular service provider, such as an app, to pay their rent.
These changes to how rent can be paid will start in the first half of 2025.
Stay up to date with the changes
Further information will be made available on nsw.gov.au including:
- details on the changes to rental laws
- when the laws start
- how the laws will be implemented and enforced.
For the latest updates, sign up to the NSW Fair Trading Property Matters newsletter.