Landlords under threat in NSW

LANDLORDS WILL HAVE LESS SAY IN WHO LIVES IN THEIR INVESTMENT PROPERTY, AND WHAT COSMETIC CHANGES TENANTS CAN MAKE TO IT, UNDER SWEEPING CHANGES TO NSW RESIDENTIAL TENANCY LAWS. FIXED-TERM LEASES WILL ALSO BECOME A THING OF THE PAST.

In November 2009, the NSW Government released the Residential Tenancies Bill 2009, which proposes some of the most radical changes in decades to the control and management of hundreds of thousands of rental properties in NSW.

Just a few examples of the changes proposed are detailed below.

Sub-letting

Under the proposed reforms, a landlord’s right to decide who inhabits their property may be able to be challenged.

The concept of permitting sub-letting without the consent of the landlord, and for there to potentially be an increasing stream of sub-tenants, will simply open a Pandora’s Box of issues for landlords.

Cosmetic changes

The proposed changes also provide that a landlord must not unreasonably withhold consent “to a fixture, or to an alteration, addition or renovation that is of a minor or cosmetic nature”. There is no definition of what is“minor or cosmetic” in the Bill.

 What is minor or cosmetic to a tenant may not be what is minor or cosmetic to a landlord. In addition, a minor or cosmetic change made by one tenant will not necessarily suit the next tenant. Such changes may also result in damage that is irreversible.

Landlords must retain the right to say ‘no’.

Fixed-term tenancies

Another proposed change will result in fixed-term tenancies becoming a thing of the past. Tenants will be able to break a lease, during the fixed term, without any special ground by giving just 14 days notice to the landlord and paying a break fee.

This single, dramatic change to current practice has the greatest potential of any of the proposed changes to utterly destroy landlord confidence.

What is the point of a landlord entering into a fixed-term tenancy that is unable to be enforced?

A need for appropriate reform

The stated objective of the reforms to “fairly balance the rights and obligations of tenants and landlords” is laudable. There is clearly a pressing need for reform in some areas of the residential tenancies regime.

However the changes proposed will instead substantially shift the balance of power further in favour of tenants.

In a market where many landlords are already only deriving a marginal return, measures such as those proposed may well be the straw that breaks the camel’s back.

The way forward – your voice is important

The changes proposed in the Residential Tenancies Bill are set to significantly affect your rights as a landlord.

If you do not agree with the proposed changes, you should contact your local Member of Parliament as a matter of urgency and make them aware of your concerns. It is your MP who will ultimately vote for or against these changes. Contact details for your local MP are attached.

We would also encourage you to register your opinion at http://www.reinsw.com.au/rtafeedback

Down load a copy of this article and a list of local MP’s: PMChapter_RTAflyer_FINAL[1]

Source: REI NSW