Understanding NSW Tenancy Agreement Changes and Break Lease NSW

Wondering how the changes to the Residential Tenancies Amendment (Review) Act 2018 and the Residential Tenancies Regulation 2019 might affect you as a landlord or tenant? Not even aware they exist? Luckily, it’s our job to keep up to date on changes in legislation and how they impact you.

To save your valuable time, we’ve summed up the main changes below.

New smoke alarm obligations

This is the big one. Landlords and property managers will now need to ensure smoke alarms in rental properties are in working order, and failure to do this will result in massive penalties.

Annual checks, replacing batteries and repairing broken smoke alarms promptly all need to occur. They’ve also extended the provision to enter the property without consent if it’s to inspect the need to repair or replace a smoke alarm. Proper notice still needs to be given, of course.

Separate trust accounts and single licensee in charge

Property managers must now have separate rental and sales trust accounts. Licensees will need to ensure money is paid into the appropriate accounts and will be the only one able to approve trust account transactions.

Minimum rental standards

In order to be considered fit for living, rental properties must meet some minimum standards. It’s common sense, but things like proper ventilation, connection to water and electricity and adequate lighting must be ensured. It probably goes without saying, but the building itself must be structurally sound.

Minor alterations and renovations

Tenants everywhere will rejoice as they can now make their own minor additions or renovations with written consent from the landlord.

The landlord cannot unreasonably withhold consent if the alteration, fixture or addition is one from the prescribed list in the new regulation. These include things like:

• Installing safety devices for children, such as window safety devices, gate latches, securing furniture to a wall and securing curtain or blind cords
• Hanging photos or artwork
• Planting vegetables or small shrubs (provided existing plants don’t need to be moved)
• Installing or replacing curtains and flyscreens
• Changing taps or showerheads for the elderly

Of course, any electrical or plumbing work will still need to be completed by a licensed professional.

Rent increases and break lease fees

Rent increase changes boil down to no more than one hike per year unless on a fixed-term lease less than two years (then, you can specify when and how much rent is increased). Break lease fees will now be determined by how long is left on your lease, and as a result will be more favourable to a tenant.

Protection for domestic violence victims

This one has been in effect from February 2019. Victims of domestic violence are able to terminate their tenancy immediately and without penalty. Landlords and their agents are not allowed to list the victim on a tenancy database if the tenancy is terminated for this reason.

Added transparency

Before signing an agreement, tenants will need to be provided with all the right information. This includes ‘material facts’ such as any major repairs to be carried out, or if the property was recently used to manufacture prohibited drugs.

An important one for sales and social media, landlords or property managers will now have to obtain prior written consent before publishing photos or video recordings of the premises. This includes photos of the inside of the property where it may show the tenant’s personal items.

Water efficiency measures

In good news for the environment, water efficiency measures mean all taps and toilets need to be checked for leaks and repaired at the start of a lease. By 23 March 2025, all toilets in rental properties will need to be dual flush with a minimum 3-star rating, which is something to consider if replacing toilets in the near future.

The property will have to be separately metered with water efficiency measures in place if the landlord wants to pass on water usage charges to the tenant.

New form or agreement and condition report

The standard form of agreement has been updated to include all the new laws and amendments.

Condition reports have been improved too. Tenants can now receive them electronically, and there’s a penalty for landlords or agents who don’t provide a completed condition report at the start of the tenancy.

We hope you found this summary useful. It’s our job to be across major law changes like these, so please reach out if you’d like to have a chat about the new regulations.