Changes To The Residential Tenancy Laws Landlords Must Read

By February 12, 2020Landlord Tips

On the 23rd of March 2020 amendments to the residential tenancies act 2010 will come in to effect. NSW fair trading state “The changes improve tenants’ renting experience while ensuring landlords can effectively manage their properties. The changes aim to reduce disputes over repairs and maintenance, increase protection and certainty for tenants, and clarify the rights and obligations of tenants and landlords.”

Whilst there are many amendments to the act, I have identified three changes that I believe will have the most impact to both tenants and landlords.

Changes to tenant break lease fees.

The amount a landlord can recover as a break lease fee if a tenant vacates during a fixed term agreement is going to be reduced considerably. This fee will be dependant of how much of the fixed term has expired at the time of the tenant breaking the agreement.

The break lease fees will be:

  • 4 weeks rent if less than 25% of the lease had expired (for example: within the first three months of a twelve month lease)
  • 3 weeks rent if 25% or more but less than 50% of the lease had expired (for example: after three months but prior to six months of a twelve month lease)
  • 2 weeks rent if 50% or more but less than 75% of the lease had expired (for example: after six months but prior to nine months of a twelve month lease)
  • 1 week’s rent if 75% or more of the lease had expired (for example: after nine months of a twelve month lease)

These new changes only apply to new agreement entered into on or after the 23rd of March 2020. This may also influence a landlords decision whether or not to renew a fixed term lease at the end of a tenancy. It is best to check your landlord insurance policy to check if your cover is dependant on being in a fixed term.

New smoke alarm obligations for landlords.

Although it has always been best practice for landlords to maintain smoke alarms in rental properties, from the 23rd of March 2020 it will become mandatory for all NSW landlords to have smoke alarms in working order and maintained.

To ensure smoke alarms installed in the rented property are in working order, a landlord must:

  • carry out annual checks to ensure all smoke alarms installed at the property are in working order
  • replace a removable battery in all smoke alarms in the period specified by the smoke alarm manufacturer, or otherwise annually
  • repair or replace a smoke alarm that is not working within two days of becoming aware that it is not working
  • replace a smoke alarm with a new smoke alarm within ten years from the manufactured date, or earlier if specified by the smoke alarm manufacturer.

The best way for a landlord to ensure they are meeting these obligations is to subscribe to our smoke alarm testing service. This is where an independent trades person will test the alarms annually and replace the batteries and alarms as required for a fixed  annual fee of $99.

Water efficiency measures.

Currently for a landlord to be able to pass on water usage charges to the tenant, the residential property must be separately metered and meet the water efficiency measures. The new laws include additional water efficiency measures, including that all taps and toilets on the property need to be checked at the start of a tenancy so that any leaks are fixed. Taps and toilets must also be checked whenever any other water efficiency measures are installed or repaired.

Also from the 23rd of March 2025 all toilets in rented properties must be dual flush with a minimum 3-star rating in accordance with the Commonwealth Water Efficiency Labelling and Standards (WELS) scheme. If you need to repair or replace a toilet in your rental property it would be best practice to ensure you comply with this water efficiency standard.

To read more about these legislative changes you can read more on the NSW fair trading publication to the changes to the residential tenancy laws.