NSW Rental Law Changes: Key Updates for 2025
 

The Residential Tenancies Amendment Bill 2024 has introduced significant changes to rental laws in NSW. These reforms impact rent increases, lease terminations, pet ownership, and payment options. Some changes are already in effect, while others will roll out in early 2025.

This guide explains the new rules, how they affect landlords and tenants, and what steps you should take to stay compliant.

Rent Increases Now Limited to Once Per Year
 

What’s changed?

• Landlords can now only increase rent once every 12 months, regardless of whether the tenancy is fixed-term or periodic.
• This closes a previous loophole that allowed multiple rent hikes within certain fixed-term agreements.

What does this mean?

• Landlords must strategically plan rental increases based on market conditions.
• Tenants now have greater financial stability with predictable rent adjustments.

If you’re a landlord, staying informed about local rental trends is crucial for making competitive pricing decisions.

Ending No-Grounds Terminations
 

Effective early 2025, landlords can no longer end leases without a valid reason.
 

New Termination Rules for Landlords

• Fixed-term leases (6 months or less): 60 days’ notice required.
• Fixed-term leases (more than 6 months): 90 days’ notice required.
• Periodic agreements: No change (still 90 days).

Valid Reasons for Lease Termination

Landlords can only terminate a lease under specific circumstances, such as:

• The tenant breaches the lease (e.g. non-payment of rent, property damage).
• The property is being sold or offered for sale with vacant possession.
• Major renovations, demolition, or repairs are planned (must begin within 2 months).
• The landlord or their family needs to move in for at least 6 months.
• The property will no longer be rented for at least 12 months.
• The tenant was living in the property as part of their employment, which has ended.
• The tenant no longer qualifies for certain housing programs.
• The property is designated for key worker housing (e.g. for teachers, health workers or police).

Re-Letting Restrictions

• Some termination reasons come with re-letting exclusion periods.
• Landlords may face penalties if they attempt to re-let the property too soon.

Understanding these changes is critical for avoiding disputes and ensuring compliance.

Pet Laws: Easier Approvals, Clearer Rules
 

NSW is introducing stronger tenant rights regarding pet ownership.
 

What’s Changing?

• Tenants must submit a formal pet application form.
• Landlords must respond within 21 days—if they don’t, approval is automatic.

Valid Reasons to Refuse a Pet Application

Landlords can only refuse pet requests for specific reasons, such as:

• Too many animals for the property size.
• The property is unsuitable (e.g. no fencing for a dog).
• The pet would likely cause damage beyond the bond amount.
• The landlord lives on the premises.
• The pet breaches strata, council, or community by-laws.

What Landlords Can (and Can’t) Require

✅ Allowed Conditions:

• Professional carpet cleaning and fumigation (for mammals).

❌ Prohibited Conditions:

• Charging extra bond or rent for pets.
• Imposing “unreasonable” restrictions.

If disputes arise, cases will be handled by NSW Civil and Administrative Tribunal (NCAT).

New Rules for Rent Payments
 

Mandatory Payment Methods

Landlords must now offer:

• Centrepay as a payment option.
• A free electronic transfer method (cash-only requirements are prohibited).

How This Affects Landlords

• Self-managing landlords cannot use Centrepay unless they operate as a business. Many may need to engage a property manager or obtain an ABN to comply.
• Centrepay charges a processing fee that cannot be passed to tenants—landlords must absorb them.

Recommended Secure Payment Solution

First National Real Estate Bonnici & Associates recommends MePay, a secure and fee-free payment portal for tenants. If you are currently renting with us, follow the steps to set up MePay here.

Portable Rental Bonds Scheme – What We Know So Far
 

The NSW Government has announced a Portable Rental Bonds Scheme, expected to launch in late 2025. This initiative is designed to help tenants by allowing them to transfer their rental bond from one lease to another, reducing upfront costs when moving.
 

Key Points About the Scheme

• Tenants will be able to transfer their existing rental bond to a new property instead of paying a new bond upfront.
• This is intended to reduce moving costs and make renting more affordable.
• Details on how deductions for damages or unpaid rent will be handled are still unclear.

What This Means for Landlords

While the scheme is focused on helping tenants, landlords and property managers are waiting for clarity on how bond claims will work. The concern is whether landlords will still have timely access to bond funds for legitimate claims related to damage or unpaid rent.

Until further details are confirmed, landlords should stay informed about how this scheme will be implemented.

How Landlords Can Stay Compliant
 

Key Steps for Landlords

✅ Review Your Lease Agreements – Ensure they reflect new laws.
✅ Keep Detailed Records – Inspection reports and tenant communications help in disputes.
✅ Be Prepared Before Issuing Termination Notices – Plan ahead for renovations, sales, or moving in.
✅ Check Landlord Insurance – Look for coverage on pet-related damage.
✅ Work With a Property Manager – Agents can ensure compliance and reduce risk.

Final Thoughts
 

The NSW rental reforms bring greater security for tenants and stricter requirements for landlords. These changes aim to prevent unfair terminations, improve transparency, and support responsible renting.

For expert guidance on navigating these changes, reach out to First National Real Estate Bonnici & Associates.