Tenancy laws up for debate as NSW unveils raft of potential reforms

The paper reveals that the government now intends to make good on a number of election promises, which are to be handled by a soon-to-be-appointed rental commissioner.

Those promises, which are now up for discussion, include:

• Amending landlords’ ability to end a lease without a reason
• Making it easier for renters to have pets
• Introducing new data protection requirements for real estate agents when they handle renters’ personal information
• Implementing a portable rental bond scheme

Acknowledging that it intends to push forward with ending no-ground evictions, the government is specifically looking for feedback on what reasons should be considered valid and what evidence landlords will need to provide in the event they wish to end a tenancy.

In addition, the paper proposes a new model, similar to that which has come into effect in Victoria, Western Australia and proposed in South Australia, for allowing renters to more easily be able to keep pets. The details are still up for debate, however, and the government is specifically looking for feedback on what grounds landlords should be allowed to refuse a tenant’s permission to keep a pet.

In setting its sights on information gathering in the process of selecting a tenant, the government is looking to prevent discrimination and also guard against cyber attacks, given that this data is now transmitted and stored indefinitely though tech platforms.

Amendments that the government is considering include limiting what information can be collected from applicants, restricting how renter information is used and disclosed, outlining how renter information should be kept and destroyed, and giving renters the right to see and correct information held about them.

The plan of introducing a portable bond scheme, which would bring greater ease to tenants when they move between properties, is also on the table. The government already made strides in this area by creating the powers necessary to implement such a scheme in a bill that passed parliament on 27 June.

It was in that same bill that the government intended to stamp out the practice of rental bidding, before pulling back on some of its stronger measures after tenants advocates and property industry insiders objected to the measure, with the former noting the government’s design might actually inadvertently encourage the very practice it sought to stamp out.

Reforms to the practice of rental bidding, which will soon fall under the new rental commissioner’s purview, are not addressed further in this paper, though the government has promised that more changes could be coming down the pike.

The proposals do, however, seek to strengthen a number of existing laws, such as helping tenants make claims against “excessive” rent increases, and closing a loophole that allowed landlords to hike rents multiple times a year.

Currently, the rent under a periodic agreement and a fixed term agreement of more than two years cannot be increased more than once in 12 months. However, if someone switches from a periodic agreement to a fixed term agreement the rent can increase even if there was an increase within the last 12 months under the periodic agreement. The NSW government is considering changing the law to prohibit rent being increased twice in 12 months simply because a renter has changed their agreement type.

Encouraging submissions from all corners of the rental ecosystem, the Minister for Better Regulation and Fair Trading, Anoulack Chanthivong, said he was looking to strike a “balanced law reform,” and asked for stakeholders to “work together, build trust, and work towards a system that doesn’t create an adversarial relationship between landlords and tenants.”