Changes to NSW Residential Tenancies Act – Effective 31 January 2011

No doubt all property managers are aware that the NSW Residential Tenancies Act 2010 will become law on 31st January 2011 however do all property owners know this?

In summary the main changes to the Act are:

• Notice period by landlord to tenant to terminate lease – increased to 90 days from 60 days (that is the owner/property manager must now provide 3 months notice to terminate a lease). Tenants may vacate at any time once notice has be given without the need to provide further notice.
• Notice period by landlord to tenant to terminate lease (at end of fixed period) – increased to 30 days from 14 days. That is, the owner/property manager must serve notice one month prior to the expiry of the fixed term. In a worst case scenario, the lease goes from being 6 months to 9 months if you fail to end the lease at the appropriate time.
• Rental Bonds – maximum bond which can be requested is 4 weeks rent regardless of whether the property is furnished or not.
• Lodgement of Rental Bonds – additional time has now been granted to both owners and agents to lodge bonds with the Rental Bond Board.
• Top-up of Rental Bonds – owners can no longer request that the bond be 'topped up' if the rent has increased during the course of a tenancy.
• Fee-Free rent payments – tenants must be given at least one method of paying the rent which does not incur additional fees eg direct deposit.
• Recovery of Bank Charges – tenants are now required to pay any charges relating to bounced cheques presented to the owner's bank for payment of rent.
• Water Usage – rental premises must be separately metered and have water efficient appliances (ie tapware) if the tenant is to be charged for water usage. That's fine for individual properties, however many apartments do not have separate metering and many owners will miss out on recouping water consumption.
• Service of Notices – hand delivery of notices to the tenant's letterbox is now an acceptable method of delivery of notices. This will save 3-4 days in the service of notices by mail.
• Holding Fees – these deposits can only be charged once the tenant's application has been approved. If the tenant withdraws, they will lose the entire fee.
• Disclosure – owners/agents must disclose whether the property has a sales agency agreement or if the bank has served any reposession/foreclosure notices.
• Break fee – a fixed penalty can now be applied for a tenant who seeks to break the lease prematurely ie within the lease term. This is optional to document, if it is not documented then a set break fee applies on a tiered scale.
• Early Release without penalty – tenants are now permitted to end the fixed term if they accept an offer of public housing or move to a nursing home.
• Sale of Rented Premises – two weeks notice must be given to the tenant prior to the placement of a notice for the sale of the property. Up to two inspections per week are permitted and further access can be negotiated.
• Sub-letting – tenants will still require the owners consent to bring a new co-tenant into the property.
• Domestic Violence – victims of domestic violence will have the right to change the locks to keep out the person listed on an AVO and to seek to take over the lease of the premises is their name is not already on the lease.
• Rights of co-tenants – disputes between co-tenants can now be brought in front of the Rental Tribunal. Co-tenants can give 21 days notice to terminate the agreement outside of the fixed term. Operationally, this may mean that all persons listed on the tenancy agreement will need to give notice to terminate the lease.

What have you/your property manager done in preparation for these changes?