Wednesday, 13 April 2011

If you rent property in NSW make sure you know about this

This becomes law on Monday 31 January 2011.
Residential Tenancies Act 2010 was passed by Parliament on 10 June 2010.
The key changes in the Act are explained below:-
Holding Fees
The Act will permit holding fees to be charged only after an application for a tenancy has been approved. This assumes that applications are approved on the spot. This may present procedural problems for both tenants and landlords and needs to be considered through the consultation process for the regulations. Once accepted the holding fee keeps the premises off the market for up to 7 days with no provision for any refund to the applicant if they decide not to enter into an agreement. The 1987 Act (current position) provides that the landlord may retain a fee equivalent to only the amount of rent that would have been paid for the period reserved and refund the remainder (if any) to the applicant.
Information to be provided and material facts
Section 27 (1) compels a landlord to provide a tenant with their phone number or other contact details even if they have an agent. The Act requires the disclosure of material facts to prospective tenants; such as if the landlord has drawn up a contract to sell the property or if a mortgagee has taken court action to recover possession.
Selling of property
The landlord must give a minimum of 14 days written notice prior to commencement of marketing. It obliges the selling agent to make reasonable efforts to agree with the tenant on the days and times the premises will be available for inspection. A limit of 2 inspections per week are provided in the Act, and the parties can negotiate if more access is required. If the landlord and tenant fail to agree, the landlord can access twice per week without consent provided 48 hours notice is given to the tenant on each occasion.
Limit on amounts payable by tenant before agreement
The tenant can no longer be charged the $15.00 contribution towards the lease preparation fee.
Limit on bonds payable by tenant
Bonds will be limited to the equivalent of 4 weeks rent for both furnished and unfurnished premises—current position is 6 weeks rent for furnished premises. Bonds can also no longer be topped up in an ongoing tenancy.
Urgent Repairs
Definitions of urgent work and repairs now includes the addition of cooling.
Breaking a lease early
The Act will enable tenants to break a lease early without penalty in certain situations, such as, when they accept an offer of public housing or need to move to a nursing home. The Act also introduces the concept of an option ‘break fee’, fixing the penalty payable in other cases where a tenant breaks a lease early. A break fee for a fixed term agreement for a fixed term of not more than 3 years is an amount equal to 4 weeks rent in any other case.
Termination Notices—Periodic agreement
The Act increases the ‘no grounds’ notice given to tenants who are no longer in a fixed term lease from 60 days to 90 days. A tenant may give 21 days notice—no change from current position.
Fixed Term
A landlord may end a fixed term agreement at any time before the end of the fixed term to take effect not earlier than 30 days after the day on which the notice is given –current position is 14 days. The tenant notice will remain at 14 days
Rent arrears evictions
We are advised that the time taken for a landlord to get their application heard by the Tribunal where the tenant is behind in rent will be shortened. Section 88 (4) provides that a landlord may apply to the tribunal for a termination order before the termination date Tribunal
specified in a non-payment termination notice, however the Tribunal must not consider such application until after the termination date. The Act also gives a guarantee to tenants that their tenancy can continue if their rent arrears are paid or if they follow an agree repayment plan. However, this guarantee may not apply if the landlord makes an application to the tribunal for a termination order and the tribunal is satisfied that the tenant has frequently failed to pay their rent on time.
Water Efficiency
The Act will require rented premises to be water efficient if tenants of separately metered premises are to pay for water. The standards for water efficiency will be determined when the regulations are made later this year. Landlords have 12 months in which to carry out any required work if they wish to continue to directly recover the cost of water usage from tenants.