The new residential tenancy laws came into play Monday 23 March 2020.

In this second article of our 2-part series, we take a further look at what has changed and highlight some key areas of interest within the sections. To see all the changes, visit the NSW Fair Trading website*.

New information to be disclosed to prospective strata tenants

From 23 March 2020, before a tenancy agreement is signed, a landlord or agent needs to give a tenant a copy of the strata scheme’s by-laws. They also need to inform the tenant if a strata renewal committee is currently established for the scheme. These changes provide greater protection for prospective strata tenants and are additional requirements to the general disclosure obligations.

Remedies for tenants for breaches to information disclosure requirements

From 23 March 2020, a tenant is able to end their tenancy agreement by giving at least 14 days’ notice if the landlord or agent fails to comply with any of the information disclosure obligations. A tenant can also apply to the Tribunal for an order to end the tenancy. The Tribunal also has the discretion to order the landlord to compensate the tenant for any costs incurred as a result of ending the tenancy agreement.

Additional water efficiency measures

For a landlord to be able to pass on water usage charges to the tenant, the residential property must be separately metered, meet the water efficiency measures, and the charges must not exceed the amount payable by the landlord (according to the water supplier’s bill or other evidence).

The changes provide additional water efficiency measures, including that all taps and toilets on the property need to be checked at the start of a tenancy so that any leaks are fixed. Taps and toilets must also be checked whenever any other water efficiency measures are installed, repaired or upgraded and any leaks fixed. This requirement applies to existing and new tenancy agreements from 23 March 2020.

Landlords must also indicate the following:

• All shower heads have a maximum flow rate of 9 litres per minute
• All internal cold water taps and single mixer taps in kitchen sinks or bathroom hand basins have a maximum flow rate of 9 litres per minute
• Date the premise was last checked to ensure compliancy with the water efficiency measures

From 23 March 2025, all toilets in rented properties must be dual flush with a minimum 3-star rating in accordance with the Commonwealth Water Efficiency Labelling and Standards (WELS) scheme.

Landlords who intend to replace or upgrade existing toilets in their property should consider installing dual flush toilets with a minimum 3-star WELS rating to meet the water efficiency requirements by 23 March 2025.

New rectification order process

NSW Fair Trading now has powers to resolve disputes between tenants and landlords over repairs and maintenance and property damage. This includes the ability to issue rectification orders. The rectification order process supports tenants and landlords to resolve disputes about property repairs and damage in a tenancy by working with Fair Trading.

Landlords can apply to Fair Trading to investigate whether a tenant has caused or allowed damage to the property and has refused or failed to repair, or not satisfactorily repaired, the damage without a reasonable excuse.

Tenants can apply to Fair Trading to investigate whether the landlord has failed to provide and maintain the property in a reasonable state of repair.

A landlord or tenant must first make a written request to the other party to try and resolve the issue and can then apply to Fair Trading through the complaints and dispute resolution process if the issue is not resolved.

New standard form of agreement

The REI standard form of agreement has been updated to reflect the rights and obligations between landlords and tenants under the new laws. The changes also aim to increase transparency between landlords and tenants about their rights and obligations and information relevant to the rented property. It must be used from the 23rd March 2020 onwards.

In addition to the name of the landlord, the new standard form agreement requires the contact details of the landlord, such as an email address and contact number. Other changes include:

• an option for a 5-year fixed term to encourage landlords and tenants to consider longer fixed-term agreements
• a checkbox for landlords to indicate whether electricity or gas is supplied to the property from an embedded network
• an option to allow landlords and tenants to opt into receiving or sending notices and other documents by email
• new terms requiring the landlord to advise the tenant in writing within 14 days of becoming aware of the fact that the property:
  • is subject to a significant health or safety risk and the nature of the risk
  • is part of a building where a development application or complying development certificate application for rectification has been lodged regarding external combustible cladding
  • is part of a building where a fire safety order or a building product rectification order (or a notice of intention to issue one of these orders) has been issued regarding external combustible cladding
• a new term for landlords to allow a tradesperson to enter the property to carry out maintenance or repairs needed to avoid health or safety risks to any person, or to avoid a risk that water, utilities or other services may be disconnected.

New condition report

The REI condition report has been updated to reflect the new laws, including the minimum standards and smoke alarm requirements, and must be used from the 23rd March 2020 onwards.

Minimum standards include (in the form of check boxes):

• Are the premises structurally sound?
• Does the premises have adequate:
  • Natural or artificial lighting in each room
  • Ventilation
  • Electricity outlet sockets or gas outlet sockets for the supply of lighting and heating to the premises and for the use of appliances
  • Plumbing and drainage
• Are the premises
  • Supplied with electricity
  • Supplied with gas
  • Connected to a water service that is able to supply hot and cold water for drinking and ablution and cleaning activities
• Does the premises contain bathroom facilities including toilet and washing facilities that allow for privacy for the user?

Other changes include:

• allowing a condition report to be provided to tenants electronically
• introducing a penalty if a landlord or agent does not provide a tenant with two hard copies or one electronic copy of the completed property condition report at the start of the tenancy
• providing that tenants complete and return the condition report within 7 days of taking possession of the property (instead of from when they receive the condition report), but only if the tenant has received the condition report.

New Landlord information standard

Landlords are now required to read and understand the contents of the Landlord information statement which sets out their rights and responsibilities as a landlord.

The new landlord information standard can be found here: https://www.fairtrading.nsw.gov.au/__data/assets/pdf_file/0010/608383/Residential-Tenancy-Information-Statement-for-Landlords.pdf

Other changes

• rent increases for periodic (continuing) agreements will be limited to once every 12 months
• removing the requirement for landlords to provide 60 days’ written notice of a rent increase for fixed-term agreements of less than 2 years if the increase is set out in the agreement
• a new definition for separately metered to reduce disputes between tenants and landlords about who pays for electricity, gas or water usage charges. A few exceptions apply where the definition does not have to be strictly met because of different metering requirements
• changes to make it easier for tenants to get repair orders from the Tribunal
• clarifying the rules around photos/videos of the property:
  • An agent can take photos or videos of the interior of a rental premise for the purpose of advertising for sale or lease, once only in the 28 day period before marketing the premises starts.
  • The tenant must be given reasonable notice and are given reasonable opportunity to remove personal items.
  • An agent cannot publish any public domain photos or videos showing tenant personal possessions without the tenant’s consent
  • Tenants cannot unreasonably withhold consent.
  • Tenants who are victims of domestic violence can withhold consent.
  • An agent may send photos or videos of routine inspections to landlords without tenants consent.
• ensuring tenants can access their own personal information held on tenancy databases, without being charged a fee
• prohibiting a term from being included in the agreement that requires a tenant to use a specific utility provider if there is no restriction on the landlord to use a specific utility provider (applies to new agreements from the 23rd March 2020)
• introducing new grounds for tenants to end their fixed-term agreement early without penalty by giving 14 days’ notice, if the property is listed on the loose-fill asbestos insulation register during the tenancy
• extending the continuation guarantee (or the so called ‘pay-to-stay’) provisions that apply to tenants in rent arrears to also cover arrears for water usage or utility charges. To enable this:
  • landlords need to issue a termination notice for the non-payment of water usage charges or utility charges after the tenant falls 14 days in arrears for paying those charges (i.e. where the landlord is billed for the charges by the supplier)
  • if a termination order and warrant for possession on the ground of non-payment of water usage charges or utility charges is made, the order does not apply if the tenant pays all the amount owing before the order is executed. The Tribunal can overrule this continuation guarantee and make a termination order if it is satisfied that the tenant has ‘frequently’ failed to pay for water usage charges or utility charges.
• extending the purposes for which Rental Bond Interest Account money can be used (i.e. for other consumer protection purposes)
• allowing rent receipts to be sent by email
• reducing the minimum notice period to 28 days for the termination of an employee or caretaker residential tenancy agreement (e.g. farm hands who live on the property) during the periodic term
• introducing a requirement for landlords to pay for repair, maintenance or other work needed for the installation or replacement of an electricity meter (including an advanced meter) where the meter is either:
  • faulty
  • needs to be replaced as testing indicates it may become faulty
  • has reached the end of its life
• new exemptions or exceptions relating to social housing tenancies.

Ending a tenancy in circumstances of domestic violence

To end their tenancy due to domestic violence, the tenant will need to give:

• the landlord or their agent a domestic violence termination notice and attach one of the following permitted forms of evidence:
  • certificate of conviction
  • family law injunction
  • provisional, interim or final Domestic Violence Order
  • declaration made by a medical practitioner in the prescribed form.
• each co-tenant a domestic violence termination notice.

More information about tenancy laws for victims of domestic violence can be found here: https://www.fairtrading.nsw.gov.au/news-and-updates/news/strengthened-tenancy-laws-for-victims-of-domestic-violence-start-on-28-february-2019

If you want to know more about the changes in legislation, or are concerned about how or when it affects you, please call us on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or pop into our Cardiff office. We are keen to ensure you know all the changes and fully understand the implications and costs, if any, to you.

*To see the full list of changes to the legislation and what they entail visit: https://www.fairtrading.nsw.gov.au/about-fair-trading/legislation-and-publications/changes-to-legislation/new-residential-tenancy-laws