No-grounds evictions to be banned in NSW

Both Labor and the Coalition had promised to end the practice during their 2023 election campaigns.

Currently, NSW landlords are permitted to end a periodic lease at any time, provided they give the tenant 90 days’ notice.

For fixed-term agreements of less than six months, landlords must give 30 days’ notice before terminating a lease.

Times are changing

According to Minns, the reforms have been announced in response to the acute burdens faced by renters today.

“When I was young, the question used to be whether you would ever afford to buy a place in a city like Sydney. Now, many ask whether they can even afford to rent a place in a city like Sydney,” Minns stated at the conference.

Since 2016, the number of renters across NSW has increased 17.6 per cent, with 33 per cent of the state population now renting.

For those who rent, precarity is a real threat – data from NSW Fair Trading shows that one tenant is issued a no-grounds eviction every 18 minutes in NSW.

“Something has to change,” said Minns. “We are losing twice as many young people as we are taking in, and the next generation feel locked out of the place where they were brought up.”

“We’ve made this decision not just so that renters have a home, but to ensure they can build a life.”

What counts as reasonable grounds?

Landlords will still be able to evict tenants with a reasonable cause.

Permitted causes for eviction will include:

• Breaches of lease by the tenant, including property damage and failure to pay rent.
• Sale of the property.
• Significant repairs or renovations, with the caveat that home owners must not relist the property for sale within the next four weeks.
• Change of use.
• Owner intends to move into the property.
• Change of eligibility, e.g. if the renter is no longer eligible for an affordable housing program, or is no longer a student.

“Bad tenants will still be able to be evicted. We don’t want home owners to have to put up with bad behaviour,” said Minns.

“We believe this reform gets the balance right, but more importantly, this will give both home owners and renters more certainty, more peace of mind, so they can build a home and a life on surer ground.”

New notice periods

Notice periods for periodic leases will remain the same, with landlords required to give 90 days’ advance warning for evictions with genuine cause.

Those on fixed-term leases of six months or more, the termination notice period will be increased from 60 days to 90 days.

For fixed-term agreements of under six months, the notice period will increase from 30 days to 60 days.

Portable bonds scheme

The NSW government has also announced a portable bonds scheme.

Eligible tenants will be able to digitally transfer their existing bond to their new rental home, saving them from needing to pay for a new bond before their old one is returned.

The government stated that the new scheme “maintains the integrity of the bond system” by ensuring financial security for home owners without placing renters under undue stress.

“Moving house is one of the most stressful things you can do, not to mention expensive for many renters. The process can leave renters out of pocket, for up to several weeks,” said Minns.

“The NSW government’s portable bonds scheme will give cost of living relief to renters moving homes, by making sure they don’t have to set aside extra money while they wait for their bond to be refunded.”