Should landlords, tenants prepare for an overhaul of NSW's rental legislation?

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Communication between landlords and tenants in New South Wales could soon take a step into the digital age with a state government report recommending electronic means of communication become an accepted part of lease agreements.

In 2015 the state government announced a review into NSW’s rental legislation, the Residential Tenancies Act 2010, and NSW Fair Trading has recently released a report containing the findings from that review, which includes 27 recommended changes to the Act.

So far the state government has adopted one of the recommnedations, moving to alter the Act to make it easier for victims of domestic violence to end a lease and ensuring they suffer no repercussions due to rental debt or damage to property that mauy result from their circumstances.  

Included in those recommendations is that lease agreements in the state be updated to include a clause that allows for tenants, landlords and property managers to “opt in” to the use of electronic communication channels, excluding SMS, for sending and receiving notices through the course of an tenancy agreement.

Speaking to Your Investment Property, Bernie Mitchell, principal of Focus Property Management said he believes that recommendation is a positive.

“If it’s set out like that where it’s written into the lease then I’d love to see that happen,” Mitchell told Your Investment Property.

“It’s something that needs to be structured and a formal part of the agreement. It needs to be more than just an agreement that tenants and their landlord or property manager might come up with,” Mitchell said.

While Mitchell believes an electronic notice system would be a step forward, he believes landlords and property managers would be wise not to immediately scrap current communication methods altogether.

“I’d still offer some caution around it though. At the moment we send our notices by post, we also email them and follow them up with a text message so that people can’t turn around and say they didn’t receive them,” he told Your Investment Property.

“Especially if it was for something like a termination I’d still make sure it there are two methods of communication. It’s just about covering your bases.”

Of terminations, the report recommends no change to NSW’s current system where tenants on periodical leases can be served no-grounds eviction notices provided they are given 90-days’ notice, something Mitchell also agrees with.

“I think it’s a fair call to leave it where it is for all parties,” he told Your Investment Property.

“[In terms of the 90-days’ notice] we find that if people are told they need to leave, they want to do it sooner rather than later anyway and in reality we don’t get a lot of these notices being sent out.

“When it does happen it’s usually that a fixed lease has come to an end and the landlord reviews their circumstances and decides they want to use the property differently or want the security that comes with a new fixed lease.”

While some believe the issue of tenants and rental property owners disagreeing over whether a property’s condition has been altered by fair wear and tear or damage is one that will always be a source of contention, the NSW Fair Trading report does try to reduce disputes in that area.

The report recommends that it becomes mandatory for tenants to return a completed condition report to their landlord or property manager within seven days of taking possession of property, which Fair Trading believes would allow result in easier resolution of any disputes that occur.

While Fair Trading believes that would be a step forward, Mitchell believes the best way to avoid disputes is for landlords and property managers to keep accurate records.

“What we do is have the tenant sign a declaration to say that they’ve received a copy and tell them they should return a completed copy within seven days

“If they don’t we rely on our copy and it’s not too often we have a dispute. If that does happen it just comes back to the agent or the landlord and how well they have documented everything in the original condition report.”

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