The New South Wales state government has taken the first step towards overhauling legislation covering residential tenancy agreements in the state.


NSW Fair Trading last week released a discussion paper looking at a number of areas of the state’s tenancy agreements and is calling for landlords, tenants and anybody else involved in the renting of residential properties to be involved in a statutory review of the Residential Tenancies Act 2010.


NSW Fair Trading commissioner Rod Stowe said the review was being carried out to ensure tenancy laws in the state meet the needs of all concerned.


“Whether you’re a renter or a landlord everyone needs residential tenancy laws that are balanced, modern and flexible,” Stowe said.


“Over 800,000 NSW households live in rental properties and it is important that the state’s tenancy laws are working as intended,” he said.


The discussion paper includes topics such as; starting a tenancy, rental bonds, rent and other charges, the rights and obligations of landlords and tenants, terminating a tenancy and resolving disputes. Changes to some of those areas would be welcomed by a number of people in in the real estate industry.


Bernie Mitchell, principal of Focus Property Management, believes changes need to be made to a number of areas surrounding the termination of leases.


“When it comes to terminating leases, I think there needs to be some clarification of what needs to happen in terms of communication,” Mitchell said.


“At the moment tenants are emailing us to say they want to terminate a lease, but that means there’s no signature or anything to make it legally binding, so I think there needs to be a clear definition of what’s acceptable,” he said.


Mitchell also said there needs to be changes to the notice period given to tenants on month-to-month leases.


“If a tenant’s living in a building month-to-month, currently they need to be given 90 day’s-notice before they have to move out.


“To me that’s just too long, and it should be brought back down to 60 days.”


Michael Catalano, director True Property, which provides property management services, also said there is a need for changes to termination processes to protect landlords from financial loss.


“The issue of rental arrears needs to be looked at. At the moment a tenant has to be 15 days in arrears before a termination notice can be issued and then it’s usually another 14 days or so before anything happens,” Catalano said.


“That means the four-week bond is used up and the landlord is left with no other means of compensation to cover any cleaning or other damages,” he said.


Catalano also said there needs to be more protection for landlords when tenants choose to end a lease early.


“Break lease costs need to be looked at. There’s no clear indication at the moment about what the costs are. You speak to Fair Trading and they say one thing and then the Tenancy Act says another. There’s just no clarity there,” he said.


“In my opinion, they should go back to tenants having to pay until their agreement is up or until a new tenant is found for the property, and they should have to cover the re-letting costs of the landlord.”