This change will be the one of the biggest reforms to the rental market in a decade and will help to ensure we get the balance right between renters and homeowners.
We have a housing crisis in NSW. In fact, housing is the largest single cost of living issue facing the people of NSW.
More people are renting than ever before, with around 33 per cent of the NSW population renting, an increase of 17.6 per cent since 2016.
However, the current rental market in NSW is the toughest that renters have seen for decades with historically low vacancy rates, median rent prices increasing by around 7 per cent over the last 12 months, and a system that leaves them vulnerable to eviction at any time.
These changes bring NSW into line with other states including the ACT, South Australia and Victoria who have legislated their own model to end no grounds evictions.
Ending no grounds evictions
Under the existing law, the owner of a rental property can choose to end a residential periodic lease at any time for any reason or no reason at all.
This creates insecurity and financial pressure for renters whose lives can be upended at any time.
Under our proposed reforms, homeowners will now need a reason to end a tenancy for both periodic and fixed term leases.
These will include commonsense and reasonable 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.
- Where the property is being sold or offered for sale with vacant possession.
- Where significant repairs or renovations make inhabiting the property too difficult or it will be demolished. If a homeowner seeks to renovate or repair a home, it cannot be relisted for a period of at least 4 weeks.
- If the property will no longer be used as a rental home, i.e a change of use.
- Where the owner or their family intend to move into the property.
- If the renter is no longer eligible for an affordable housing program or if the property is purpose-built student accommodation and the renter is no longer a student.
If the homeowner wishes to end a lease, evidence must be provided with a termination notice, with penalties payable by homeowners providing non-genuine reasons.
For those on fixed term agreements of less than 6 months, the termination notice period to tenants will be increased from 30 days to 60 days. For fixed term agreements of more than 6 months, the termination notice period will be increased from 60 days to 90 days.
There will be no change to notice periods for those on periodic agreements.
The package follows a comprehensive consultation process with more than 16,000 submissions and survey responses received from the general public and multiple sector based roundtables.
The Minns Labor Government will now begin stakeholder engagement on these reforms and will aim to introduce new legislation in the September sittings of Parliament to end no grounds and provide more security and stability for renters.
The new reforms are set to begin early next year, subject to this consultation.
Premier Chris Minns said:
“Bad tenants will still be able to be evicted. We don’t want homeowners to have to put up with bad behaviour.”
“But anyone who rents in NSW knows just how anxious and challenging renting can be at the moment. We’ve all seen the lines on a Saturday morning with hundreds of people waiting to inspect new properties.
“We believe this reform gets the balance right, but importantly, this will give both homeowners and renters more certainty, more peace of mind, so they can build a home and a life on surer ground.”
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said:
“Around a third of the people in NSW rent and they deserve secure and fair housing.
"Getting this model right has been a long journey but the overwhelming message from the community has been that people rent a home, not just a house.
“There’s no national consistency on these rules, so we’ve been careful to design a package that works for the NSW market.”
Minister for Housing and Homelessness, Minister for Youth Rose Jackson said:
“Creating a fairer rental system in NSW is crucial to rebuilding our housing system.”
“For too long renters have faced an unprecedented amount of uncertainty - making it harder to secure jobs, start families and develop community links.
“Renters who do the right thing - pay their rent, look after the house - should not have to be in a constant limbo with the possibility of an eviction for no reason just around the corner.
“They deserve more security and ending no grounds evictions is an important first step.”
NSW Rental Commissioner Trina Jones said:
“Putting together this package has required bringing together renters, owners, agents, advocates, and industry leaders to make renting fairer in NSW.
“The commitment to ending no grounds evictions is a major step in a broader effort to create a fair, quality, and affordable rental market where both tenants and landlords are treated with respect and fairness.
“It's about striking a balance that upholds the rights and responsibilities of all involved.”
