So you might have heard… there have recently been some amendments to the rental legislation in NSW – The Residential Tenancies Amendment (Review) Bill 2018.
The aim for these changes was to give more power to tenants, with the ability to break leases with lighter penalties, make minor alterations to properties, restrict rental increases and the ability for victims of domestic violence break lease without penalty.
Everyone at Property North Agency has just undergone training with the Real Estate Institute of NSW to find out more about these changes, how they will affect tenancies and landlords alike.
We have listed the main changes below and what they might mean to you.
Main Areas of change:
– Sliding Scale Break Fees
– Protections for domestic violence
– Tenant alterations to the property
– Limited Rent Increases
For landlords, this may be the most significant change in the Bill.
Currently, there are two options for break lease fees:
1) Fixed Fee – 6 weeks rent if in the first half of the lease or 4 weeks rent in the second half of the lease.
2) Mitigation of Loss – this means the tenant has to cover the cost of advertising, letting fee and rent until another tenant is found.
Once the amendment is implemented this will no longer be the case. There will be a set, sliding scale break lease fee structure:
For fixed term agreements less than 3 years:
• 4 weeks rent if broken in the first ¼ of the lease period
• 3 weeks rent if broken over the first ¼ but under ½ of the lease period
• 2 Weeks rent if broken over the first ½ but under the ¾ of the lease period
• 1-week rent if broken in the ¾ of the lease period
This now puts the owner at greater risk of loss when the lease is broken.
Protections for domestic violence:
Tenants who need to escape a violent partner will be able to terminate their tenancy immediately and without penalty in circumstances of domestic violence.
Tenants who are victims or a co-tenant who is not the perpetrator will not be held accountable for property damage that occurred during a domestic violence incident.
Landlords and their agents will also be prohibited from listing a victim of domestic violence on a tenancy database if they terminated their tenancy in circumstances of domestic violence.
Tenant Alterations to Property:
Based on subjective language not a lot of information has been given on this area, but we will have a clear understanding when the Regulations are released during implementation – It looks like tenants will have the right to hang picture hooks and screw into walls etc. We will update you on this once it becomes clear and the regulations are set in early 2019.
Scheduled rent increases can now be installed into a fixed term agreement with no limit to the number of increases, but these must be set out in the agreement prior to signing.
The real change will be for periodic leases (also known as continuation lease). Rent may only be increased once in a 12 month period.