New laws for residential tenancies started on 23 March 2020 in NSW

Long gone are the days of the Landlord and Tenant Act 1899 (NSW) when all that the law required of the landlord was to follow due process when repossessing a property.

The Residential Tenancies Act 1987 (NSW) changed the ‘if you don’t like it, move out’ attitude by landlords, by giving tenants the rights to have standard form leases, to have urgent repairs done, to limit rent increases and to give fair notice for lease termination.

Amendments to the Residential Tenancies Act 2010 (NSW) (which replaced the 1987 Act) commenced on 23 March 2020. The new laws continue the trend of giving rights to tenants and imposing obligations on landlords and their managing agents.

This is a summary:

• Seven fit for habitation standards now apply. The premises must:
   
  1. Be structurally sound (reasonable state of repair, not subject to significant dampness, be waterproof and not liable to collapse)
  2. Have adequate natural light or artificial lighting in each room of the premises other than a room that is intended to be used only for the purposes of storage or a garage
  3. Have adequate ventilation
  4. Be supplied with electricity or gas and have an adequate number of electricity outlet sockets or gas outlet sockets for the supply of lighting and heating to, and use of appliances in, the premises
  5. Have adequate plumbing and drainage
  6. Be connected to a water supply service or infrastructure that supplies water (including, but not limited to, a water bore or water tank) that is able to supply to the premises hot and cold water for drinking and ablution and cleaning activities
  7. Contain bathroom facilities, including toilet and washing facilities, that allow privacy for the user
      
• Landlords must check smoke alarms annually, replace batteries annually, and replace smoke alarms every 10 years.
   
• Landlords must allow tenants to make these minor changes:
   
  • securing furniture to a non-tiled wall for safety reasons
  • fitting a childproof latch, child safety gates and window safety devices
  • inserting fly screens on windows
  • installing or replacing curtains and removable blinds and cord guides on windows
  • installing hand-held shower heads or lever-style taps to assist the elderly or disabled
  • installing or replacing hooks, nails or screws for hanging paintings, picture frames
  • installing phone line or internet connection
  • planting vegetables, flowers, herbs or shrubs (that don’t grow more than 2 metres) in the garden if existing vegetation or plants do not need to be removed
  • installing a wireless removable outdoor security camera
  • applying shatter-resistant film to window or glass doors
  • making modifications that don’t penetrate a surface, or permanently modify a surface, fixture or structure of the property.

  Note: tenants must remove the modifications at the end of the tenancy, at their cost.
   

• Landlords must accept early termination of fixed term leases. The tenant’s liability is limited to paying a break fee of 4 weeks rent if less than 25% of the agreement has expired; 3 weeks rent if 25% or more but less than 50% of the agreement has expired; 2 weeks rent if 50% or more but less than 75% of the agreement has expired; and 1 weeks rent if 75% or more of the agreement has expired.
   
• Landlords must disclose if the house has been used to manufacture or grow illegal drugs within the past 2 years; if it is a strata apartment and rectification or major works are to be carried out; and if there is a fire safety order or application has been made to remove combustible external cladding.
   
• A new standard form Residential Tenancy Agreement and a new Condition Report.
   
• Rent increases are limited to once every 12 months.

The fit for habitation, smoke alarm and minor changes apply to existing and new tenancies. The break fee and disclosure requirements apply only to new tenancies.

Case study Jin v Jupiter St James Pty Ltd [2019] NSWCATAP 210

The tenant entered into a new residential lease of a two bedroom apartment in Potts Point. The lease was for one year to commence on 16 July 2018. The rent was $5,518 per month.

On 17 July 2018, the tenant reported a water leak after he found carpet was wet outside the ensuite off the main bedroom. A plumber fixed the leak which was in the vanity. The tenant continued to complain about the mould smell and on 15 August moved out claiming that the apartment was uninhabitable due to a significant health risk – he was experiencing itchy eyes and a sore throat. He obtained an expert report which demonstrated the presence of mould. On 30 August 2018, he moved his belongings and furniture out, and handed the keys and a termination notice to the landlord’s agent to end the lease.

The Tribunal (NCAT) decided:

1. The water leak was not so serious as to make the apartment uninhabitable on health grounds when there was another bathroom and another bedroom (which the tenant used) and the door to the main bedroom (which was not used) could have been kept closed.
    
2. The water damage and disruption caused by the water leak did result in a substantial interference with the tenant’s right to quiet enjoyment of the premises between 17 July and 30 August 2018. The Tribunal assessed the loss of value as a result of that breach at 25% of the rent paid and awarded $2,041.
    
3. The landlord was entitled to a break fee of 6 weeks rent ($7,620), according to the lease because the tenant had abandoned the premises. The tenant argued that no break fee was payable but failed to prove that immediate termination was justified.
    
4. After crediting rent paid in advance of $2,902.86, the Tribunal ordered the tenant to pay the landlord $2,676.

Under the new laws, instead of paying the landlord, the tenant would have received a refund of at least $1,905, as follows:

• The Tribunal would have awarded a refund of 50%, not 25% of the rent paid because the ‘fit for habitation’ standard requires that there be no significant dampness.
   
• The break fee is now 4 weeks, not 6 weeks rent, for terminating a lease if less than 25% of the agreed term has expired.

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