UPDATE: Our take on the draft Bill, in brief

The Good

Residential tenancy databases. Finally: the draft Bill proposes legislated rules about residential tenant databases that will apply to landlords, agents and database operators. It will oversee how listings occur and how to find out about a listing, and provides for the resolution of disputes. Given the importance of this reform, it is vital that the legislation gets it right.

Co-tenants. Under current laws, a departing co-tenant cannot end their liability for rent and other costs, while other co-tenants remain. The draft Bill would allow the termination of a co-tenancy, and the severance of liabilities, by giving notice to the landlord and remaining co-tenants.

Domestic violence. Where a final Apprehended Violence Order excludes a violent co-tenant from their premises, the draft Bill would automatically terminate their tenancy. The tenancies of other co-tenants would remain on foot. This proposal will enable the rental liabilities of victims and perpetrators of domestic violence to be severed.

Rent arrears. While landlords would be able to commence termination proceedings more quickly, tenants would be assured that if they pay their arrears, their tenancy will be saved – even if the Tribunal has already ordered termination. Tenants facing eviction for arrears would not be tempted to keep their money for a new bond, and landlords would be better equipped to recover arrears.

Break fees. Tenants who move out during the fixed term of a tenancy would be liable to compensate the landlord with a pre-determined ‘break fee’. This is much less complicated than the current “breach/loss/mitigation” model. The proposal is controversial – the draft Bill seems to create a statutory right for tenants to unilaterally end a fixed term tenancy. It should simply seek to codify the manner in which appropriate compensation is calculated. It would be unfortunate if this reform is abandoned on account of this controversy.

Terminations by tenants. Tenants would be able to end a tenancy with no penalty if they are offered a social housing tenancy, or take up residence in an aged-care facility, during their fixed term.

The Bad

Access to premises for sale. The Bill envisages landlords and tenants making agreements about days and times to show a property to prospective purchasers. But any negotiations would be undermined, by giving landlords access on 24 hours’ notice without limiting the number of visits, as well as fines of up $2 200 for tenants who refuse to give ‘reasonable’ access. Agreements will only happen when landlords’ rights of access are restricted and they have a reason to negotiate for more. These proposals are a step backwards, and will lead to more disputes between landlords and tenants.

Uncollected goods. The time allowed for collecting goods at the end of a tenancy would be decreased to just 14 days, before a landlord can dispose of them. The draft Bill would give a former-tenant a right to compensation if the landlord disposes of goods unlawfully – but given the options for a landlord to dispose of goods may include giving them away, this could well be meaningless.

Unfinished Business

Terminations ‘without grounds’. Renting in NSW will remain unnecessarily insecure, as landlords would retain their current ability to end tenancies ‘without grounds’. Notice periods would be increased, but the Tribunal would lose its discretion to take ‘circumstances of the case’ into account during termination proceedings. Under these proposals, termination notices without grounds will always end a tenancy. The law should be trying to discourage landlords from using notices without grounds, not making them more attractive.

Exclusions. Those renters who are kept out of the current Act – particularly boarders and lodgers – will continue to be excluded by the draft Bill. These exclusions highlight the urgent need for occupancy legislation that covers all marginal rental housing in NSW.