New tenancy laws allow renters to break leases with a week’s notice
TENANTS will be able to break leases for no reason by paying as little as one weeks’ rent under controversial new changes to NSW rental laws. And landlords aren’t happy.
NSW
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TENANTS will be able to break leases for no reason by paying as little as one week’s rent under controversial new changes to NSW rental laws.
In legislation which is due to pass NSW Parliament early next week, landlords will also have to forfeit a lease if a tenant can get a letter from a GP saying they are the victim of domestic violence.
The NSW Property Owners Association says the new laws inject too much regulation into the mainstream rental market and will force landlords into Airbnb-style rentals where returns are more certain.
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Tenants’ groups say the laws don’t go far enough.
“Under these new laws tenants can break a lease with very little repercussions,” NSWPOA president John Gilmovich said of the changes, which represent the biggest change to rental laws in two decades.
“If tenant decides they don’t like the place and pays minimal compensation, where does that leave the landlord?
“As a landlord, why would I bother signing a long-term rental agreement when I can go to the less regulated area of short-term letting?”
Mr Gilmovich believes rents will rise as a result of the changes, which will also force landlords to adhere to minimum standards for lights, electrical outlets and structural integrity.
Under the current regime tenants who break a lease pay either a maximum of six weeks’ rent or the sum total of a landlord’s costs in finding another tenant.
In some cases tenants can pay well in excess of six weeks’ rent if the abandoned rental property remains vacant for months.
Under the new laws, tenants who break leases pay a sliding scale of compensation; four weeks’ rent if broken in the first quarter of the lease, up to only one weeks’ rent in the final quarter.
The government is also being attacked the NSW Tenants’ Union for maintaining that landlords do not need any reason to break a lease.
The union is pushing for “reasonable grounds” evictions, which could include when the landlord wants the property for themselves or a family member; when substantial repairs or renovations need to happen; or when the property has become unsafe.
“We think the government is being held back by a belief that landlords will not support them in these changes — perhaps because many in government are landlords themselves,” NSW TU senior policy officer Leo Patterson Ross said.
“But we also think there will be many landlords who recognise that the change from ‘no grounds’ to reasonable grounds is sensible, balanced and modern.”
Better Regulation Minister Matt Kean said “our centrist policy gets the balance right”.
“Under these common sense changes, renting families will be able to make minor alternations such as installing a picture hook to hang their family photos and will benefit from a new set of minimum standards to ensure properties are in a liveable condition,” Mr Kean said.