Next month, the new residential tenancy laws will take effect in New South Wales, and landlords would do well to take note. 

For instance, landlords must provide a rented property in a reasonable state of cleanliness that is ‘fit for habitation’. The changes introduce seven minimum standards which clarify the meaning of ‘fit for habitation’ and they require an investor to provide: 

• A structurally sound property
• Adequate natural or artificial lighting in each room, except storage rooms or garages
• Adequate ventilation
• Electricity or gas and enough electricity or gas outlets for lighting, heating and appliances
• Adequate plumbing and drainage
• A connection to a water supply service or infrastructure for the supply of hot and cold water for drinking, washing and cleaning
• Bathroom facilities, including toilet and washing facilities, which allow user privacy.

Moreover, it’s not merely enough to provide a toilet under the new regime. If you replace the toilet after 23 March 2020, the new throne must have a dual flush system. Indeed, from 23 March 2025, all toilets in rented properties must be dual flush. 

For a landlord to pass on water usage charges, the property must be separately metered and provide water efficiency measures such as dual flush toilets and taps, which provide water flow at a rate of no more than 9 litres a minute when applicable. Also, the water charges must not exceed the amount payable by the landlord (according to the water supplier’s bill or other evidence).

Fixtures and fittings 

Tenants are currently allowed to install fixtures or make alterations, additions or renovations if they have the landlord’s written consent, or if the residential tenancy agreement permits it. The tenant must pay for the additional fixtures they install or for any alteration, renovation or addition to the property unless the landlord agrees otherwise. If the tenant’s request for a fixture or modification, addition or improvement is minor, then the landlord can’t veto the application. To remove some level of complexity, the new regulations stipulate the fixtures, alterations, additions or renovations which it would be unreasonable for a landlord to deny.

The new regulation also specifies which of the changes a landlord may require a qualified tradesperson to carry out. This change is an important point to consider because faulty workmanship may impact your landlord insurance cover.

New mandatory set break fees for fixed-term agreements

Compulsory fees will apply when a tenant breaks early from a fixed-term contract of three years or less. This change applies to agreements made from 23 March 2020 onwards. The break fees are:

• Four weeks rent if less than 25% of the lease expires
• Three weeks rent if 25% or more but less than 50% of the lease expires
• Two weeks rent if 50% or more but less than 75% of the lease expires
• One week’s rent if 75% or more of the lease expires.

This is a significant change as previously, tenants who broke a lease had to pay much larger break costs and landlords had more financial protection.

New paperwork and disclosure 

The new standard tenancy agreements will reflect the rights and obligations between landlords and tenants under the new laws. The changes aim to increase transparency about the rights and obligations of tenants and landlords and the information relevant to the rented property.

Likewise, a landlord or property manager must not make false or misleading statements or knowingly conceal specific material facts from a prospective tenant before they sign an agreement. For example, if there was a drug bust or murder on the property, this information must be disclosed. 

For more information about the changes to the residential tenancy laws, talk to your Raine & Horne Property Manager or check out the NSW Office of Fair Trading’s website.