The Residential Tenancies Amendment Act 2024 has ushered in a significant transformation of rental laws across New South Wales. Passed in October 2024, the reforms aim to strengthen tenants' rights, enhance transparency, and improve rental standards. These updates bring NSW in closer alignment with tenancy legislation in other Australian states such as Victoria, Queensland, and South Australia.
The majority of these changes are set to come into effect from 19 May 2025, with additional measures being rolled out later in the year. Whether you're a property investor, owner, or renter, it's important to understand how these reforms will impact your rights and responsibilities.
Let's explore the key changes in more detail.
1. Ending of 'No-Grounds' Evictions
One of the most significant reforms is the abolition of 'no-grounds' evictions. From 19 May 2025, landlords will no longer be able to end a tenancy without providing a valid reason—regardless of whether the lease is fixed-term or periodic.
Permissible Reasons to End a Tenancy Now Include:
- Breach of agreement – such as failure to pay rent or property damage.
- Sale of the property – particularly if the new owner requires vacant possession.
- Landlord or family member moving in – with a minimum six-month occupancy requirement.
- Major renovations or demolition – where it is not feasible for the tenant to remain.
- End of affordable housing scheme – if the property was part of a government initiative that has ceased.
Key Requirements:
- Landlords must provide evidence supporting the reason for termination.
- If evicting for renovations, re-letting restrictions apply: the property cannot be leased again within six months without prior approval.
- Penalties for non-compliance can reach up to 650 penalty units.
Impact on Landlords and Tenants:
- Landlords must revise their termination processes and ensure all notices are legally justified and supported by documentation.
- Tenants gain increased security, protecting them from sudden and unexplained lease terminations.
2. Rent Increases Capped to Once Per Year
To reduce rental volatility, the reforms introduce a cap on rent increases, limiting them to once every 12 months—regardless of the lease type.
What Landlords Need to Know:
- Applies to both fixed-term and periodic leases.
- The rule is retrospective—even renewing a lease doesn't reset the 12-month clock.
- Any rent increase must be clearly communicated and comply with standard notice periods.
Benefits for Tenants:
- Ensures greater predictability and affordability.
- Protects renters from sudden spikes in rent, offering more financial stability.
3. New Pet Application Process
The updated legislation makes it easier for tenants to keep pets, promoting more pet-inclusive rentals across the state.
New Rules for Pet Ownership:
- Tenants can submit a standard pet request form.
- Landlords must respond within 21 days.
- If no response is provided within that period, the request is automatically approved.
Valid Grounds for Refusal:
- The property is unsuitable (e.g. no secure fencing, small space).
- It breaches strata by-laws or council regulations.
- The landlord lives on-site and has personal objections.
- There is a legitimate concern about unreasonable damage that would exceed the rental bond.
Landlords Cannot:
- Charge extra rent or bonds for pets.
- Reject a pet application without clear, lawful justification.
If a tenant believes a refusal is unfair, they can escalate the matter to the NSW Civil and Administrative Tribunal (NCAT) for review.
4. Fee-Free Rent Payment Options
To reduce hidden costs for tenants, landlords must now offer at least one fee-free electronic rent payment method, such as a direct bank transfer or Centrepay.
Key Points:
- Tenants cannot be charged additional fees for paying rent electronically.
- Payment systems must be easy to access and use, ensuring rent is not withheld due to restrictive payment processes.
This change helps streamline the rental process while eliminating unnecessary financial burdens on tenants.
5. Further Reforms Coming in Late 2025
The NSW Government has also flagged several additional reforms expected to be introduced later in 2025, including:
Portable Bond Scheme
- Tenants will be able to transfer their rental bond directly between properties, streamlining the move-in/move-out process.
Enhanced Privacy Protections
- New rules will place stronger limits on how landlords and agents collect, store, and use tenant data, aiming to improve data privacy and reduce risk of misuse.
What This Means for Property Owners and Tenants
For Landlords:
- Stay compliant: Review all termination practices, lease documentation, and communication procedures to ensure alignment with the new laws.
- Update internal policies: Especially around pets, eviction notices, and rent increases.
- Seek support: Professional property managers can help navigate compliance and reduce risk.
For Tenants:
- Know your rights: Especially regarding evictions, rent increases, and pet ownership.
- Follow proper channels: Use official request forms and keep documentation.
- Seek help when needed: NSW Fair Trading and tenancy advocates can offer guidance.
Final Thoughts
With most of the changes due to commence on 19 May 2025, now is the time to prepare. Whether you're an investor with multiple properties or renting your first home, being informed is the key to staying compliant and protecting your interests.
If you're a property owner, investor, or tenant, it's crucial to understand these new laws and how they impact your rental agreements.
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