Neon Change Sign

Updates Below: Tenancy Reforms, change is on the way!

Update: 4/12/2018  2019 Residential Tenancy Act: Stages & Timing

A recent update by the Real Estate Institute of NSW indicates that the reforms will be rolled out in two stages in 2019. Exact commencement dates of the new legislation hasn’t been announced as yet but will be sure to keep this updated. The below outline from the REINSW gives some approximate timing and the stages in which the changes will come into effect.

The stages ahead and timing

The anticipated approach is that the changes will be tackled in two stages:

1)      Stage 1: Domestic violence related reforms (this would include a declaration form in the schedule to the Regulations)

2)      Stage 2: Remaining reforms.

Stage 1

NSW Fair Trading are looking to commence stage 1 prior to March 2019. This means that targeted consultation will occur over the coming weeks on the declaration form which has been issued to REINSW (the rest of the domestic violence changes are reflected in the Act). REINSW Legal Counsel and the RTA Sub-Committee have held their first meeting to discuss the declaration form and its content, and REINSW will be lodging a Submission on the declaration form by 28 November 2018.

Stage 2

NSW Fair Trading are looking to implement stage 2 later next year. NSW Fair Trading have informed REINSW that formal consultation on the stage 2 reforms is not planned to occur until after March 2019.

In any case I’m assured that the REINSW will be keeping their members in the loop which I will then update here.

Thanks for following, Antonio

Update: 30/10/2018

Having attended an Information Session today held by the Real Estate Institute of NSW on the Residential Tenancies Act it appears changes are imminent.

What has arisen out of the reforms are definite changes, though alot of detail and “grey areas” are needing further clarification. The vast majority of these changes are not retrospective.

So what do we know for sure:

  • Changes to Break Lease Fee’s are set out to a one off fee dependant of the time period lapsed of a fixed term agreement
  • Changes to way in which Tenancies subject to circumstances of Domestic Violence are treated and finalised
  • Rent Increases in a Periodic Agreement limited to once in every calendar year
  • Landlords will be required to complete an information statement that confirms they are aware of their rights and obligations before a Tenancy Agreement is entered into
  • Smoke Alarm issues and repairs will be deemed an Urgent Repair
  • Landlords will have other obligations to meet as to Standards surrounding being fit for habitation an example being adequate power points in each room
  • Properties that are not separately metered for utilities incl. water can not have charges passed onto tenants; An example being that Granny flats and some duplexes will not be able to charge water usage to tenants where the meter isn’t read separately by the water board
  • A prescribed list will be drawn up to clear up what “reasonable” Alterations to a premises are, therefore allowing tenants to make set out alterations but permission must be sought in any case

So more to come on this as well and more changes as I’ve heard much discussion about reviews surrounding Rental Bonds and what will be some clarity around Mould and Responsibilities.

What I do look forward to, is a transition towards Real Estate becoming recognised as a Profession which is currently being lobbied. This could see the creation of a Real Estate specific commissioner overseeing the industry instead of Real Estate coming under the NSW Fair Trading umbrella. This set of Professional Standards is likely to come about in 2019 following on from reform and changes surrounding Real Estate Agent Licensing and changes to Continuing Professional Development which is being set out at the moment.

What will that mean, Real Estate Agents will have a much higher standard of training and licensing entry into Real Estate roles.

For the time being, all remains the same while the Residential Tenancy Acts’ new set of Regulations is drawn up.

Interesting times as always to be a Property Manager but also a Landlord or Tenant and not only is there much work to be done on these and further reforms, there is a great need for Education across the Property Management and more widely the Real Estate Sectors and this education must then be passed onto Landlords and Tenants who all have a vested interest in this space.

That’s what I plan to continue doing with both my blog and down the track newsletters, sharing valuable and relevant information. I also plan to do this one on one with my Owners and Tenants so that everyone knows where they stand and in turn add value to everyone’s experience with The Management Agency.

I appreciate you following these updates and am sure there will be much more to come!

With Thanks,
Antonio

 

Updated: 18/10/2018

Reforms Passed

Reforms to the Residential Tenancies Act have passed without amendment, according to the Real Estate Institute of New South Wales.

These major changes affect the real estate industry, landlords & tenants.

REINSW President Leanne Pilkington said the Residential Tenancies Amendment (Review) Bill 2018 has passed and REINSW is now commencing the first phase of educating the property management community.

“It is important for our profession to understand all of the changes that the new Bill includes. We will be conducting intensive Training Sessions in 17 locations across the state beginning in Sydney next Thursday 25 October and runinng to 29 November 2018.

“The second phase will follow the release of the Regulation, which are the guidelines that dictate how the act should be applied.

“REINSW with the support of the REINSW Property Management Chapter Committee and a dedicated Sub-Committee which formed in June 2015, worked tirelessly to specifically identify those areas in the current legislation requiring reform.”

Ms Pilkington said while many of our lobbying efforts have been adopted in whole or part by the Government, a lot have been ignored, such as the Government’s proposed changes to:

  • Alterations to property
  • Break fees
  • Domestic violence
  • Rent increases, and more.

The bill will now be sent to the Governor of NSW for his assent. A date for the reforms to be implemented is yet to be disclosed.

I will be attending an REINSW session covering the reforms in Late October so more details to come!

 

Original Post: 26/09/2018

The NSW Rental market is constantly changing and growing, more than 820,000 households live in a rental property and the demand continues to grow with more and more people renting and renting for a longer period of time.

Yes, we’re heavily governed by the Property Stock and Business Agents ACT (PSBA) and the Residential Tenancies Act (RTA) and we need to be considering how many people live in rented premises and rent out their properties.

Under section 227, the Residential Tenancies Act must be reviewed every 5 years to determine whether or not the objectives and terms remain valid and appropriate. This current review process started back in 2015 and is now finally being debated this week in NSW Parliament.

Much is being said in the media about what is and what isn’t up for discussion.

There seems to be some certain changes in regards to:

  • The ability for tenants to make minor alterations to properties.
  • The introduction of a new minimum standard for properties.
  • The ability for tenants to get rectification orders from Fair Trading for repairs.
  • Restricting rent increases for periodic leases to once a year.
  • The ability for victims of domestic violence to break a lease without incurring a penalty.

The biggest debate stems around “No Ground Termination Notices” and the large majority of people that want to see the ability for landlords to terminate on No Grounds gone all together.

Some years back the notice period was increased from 60 Days to 90 Days and tenants are allowed to leave at any time within the notice period without giving counter notice. That took some time to register with landlords but has always worked well, it’s given tenants ample time to find a new home and the flexibility to secure it.

It’s unfortunate that issuing a Termination notice is being viewed as retaliatory where in most cases the owner genuinely needs their property back, to live in, to renovate, to sell.

All in all, there are some good changes that will help our many tenants make themselves at home and give them some certainty.

It does appear that Owners’ will be left with less certainty if tenant’s will able to break their leases with smaller penalties leaving them open to vacancy, re letting costs etc. No one seems to be all that sympathetic though.

It doesn’t seem that any changes will occur to No Grounds Notices at this Review, but who knows, the next review is only two years away!

All I know is that as an owner or tenant if you can’t keep up with all of this, you’ll soon find out how valuable your agent is because it’s on us to know! I’m waiting for the final bill to pass and will then get reading ?

Here’s a comprehensive list of what the reforms include:

Under the Residential Tenancies Amendment (Review) Bill 2018, the government’s proposed changes to rental reforms in NSW include:

  • If the property is in a strata scheme, the landlord or landlord’s agent needs to pass on a copy of the by-laws before the tenant enters into a residential tenancy agreement.
  • The creation of an offense for a landlord or landlord’s agent if they pass on a completed condition report to the tenant after the signing of the residential tenancy agreement, with a maximum penalty of $2,200.
  • The creation of an offence for a landlord or landlord’s agent if they do not sign an acknowledgement on a residential tenancy agreement, or if a landlord’s agent fails to sign the acknowledgement of the residential tenancy agreement without a statement from the landlord in writing that the landlord has read and understood a rights and obligations information statement.
  • If rent is paid via cheque, receipts are allowed to be sent to the email address of the tenant.
  • Requirements for rent increases do not apply to fixed terms less than two years that specify when, and the amount by, the rent is increased.
  • Rents paid in a periodic agreement are not allowed to be raised more than once a year.
  • New minimum standards for properties have been introduced, which include:
    • basic access to electricity and gas;
    • structurally sound buildings;
    • adequate natural or artificial lighting as well as ventilation; and
    • adequate outlets for lighting, heating and appliances.
  • Liability for damage to properties caused by someone else is not imposed on a tenant, or co-tenant, if a domestic violence offence is involved with the co-tenant.
  • Landlords can have access to premises without the tenant’s consent to take photos or visual recordings of the interior to advertise the property for sale once in a 28-day period, as long as reasonable notice is given and must not include tenants’ possessions in photos or footage.
  • Only landlords can carry out repairs to smoke alarms, with the exception of certain kinds of smoke alarms, with a maximum penalty of $2,200 for failing to repair.
  • In matters involving a Tribunal about repairs, more consideration is given to time frames and reasonable diligence.
  • Tenants who require urgent repairs can get rectification orders from Fair Trading.
  • Landlords will not be able to unreasonably refuse minor alterations, such as picture hooks.
  • The termination of an employee or caretaker residential tenancy agreement cannot be earlier than 28 days after the notice to terminate was given.
  • The termination of other fixed-term tenancies must be on or after the end of the fixed term and no earlier than 30 days after the notice to terminate was given.
  • The termination of periodic tenancies must be no earlier than 90 days after the day the notice was given.
  • Landlords cannot give a termination notice to a tenant solely because of their failure to pay rent, water, electricity, gas or oil charges unless the charge has not been paid for at least 14 days.
  • In matters involving a Tribunal about the termination of a tenancy due to unpaid water charges, the termination is only valid if the landlord has requested payment from the tenant within three months of the bill’s issue.
  • Tenants may give a termination notice if they enter into an agreement by misleading statements that are proven to be concealing certain facts.
  • Tenants may give a termination notice if the property is included on the loose-fill asbestos insulation register during or before the commencement of the tenancy without informing the tenant.
  • Te/ants or co-tenants can give a domestic violence termination notice without any penalty if they are a victim of domestic violence, which is defined as:
    • The tenant or co-tenant being a victim of a domestic violence offence where the offender was declared guilty during the tenancy.
    • The tenant or co-tenant has the protection of an active DVO.
    • The tenant or co-tenant is protected against family violence by a domestic violence offender.
    • The tenant or co-tenant has been declared by a competent person to be a victim of domestic violence.
  • The break fee for fixed-term agreements less than or equal to three years is dependent on the percentage of how much of the fixed term has expired:
    • less than 25 per cent: 4 week’s rent;
    • 25 per cent to less than 50 per cent: 3 week’s rent;
    • 50 per cent to less than 75 per cent: 2 week’s rent; or
    • 75 per cent to 100 per cent: 1 week’s rent;
  • The creation of an offence for when a landlord or a landlord’s agent lists a tenant or co-tenant’s personal information in a residential tenancy database if the tenant or co-tenant terminated a tenancy due to domestic violence, with a maximum penalty of $2,200.
  • The creation of an offence for database operators to charge fees for giving copies of personal information in a residential tenancy database to that person.
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