Roughly two million renters in New South Wales can breathe a sigh of relief from today as new rules kick into gear that strengthens their tenancy rights. Premier Chris Minns has mandated that rent increases will be capped at once every 12 months, along with a raft of other measures.
The move is designed to weed out bad landlords from putting increased financial pressure on tenants. Sydney-based landlord and buyer’s agent Jo Vadillo, who has seven investment properties, told Yahoo Finance this is a commonsense approach to keeping everyone happy.
“It always bothers me when I see this greed come out of people… I actually think the reforms are fair and they are needed,” she said.
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Division over the impact of rental caps
Fellow landlord, Michelle Schofield has previously hit back when property managers told her she could increase her rent by as much as $100 more a week.
But she told Yahoo Finance that there is a minor downside to rental caps.
“The problem with [rental caps] is there’s a massive jump in a year whereas if we could put it up in six months, just $20 and then $20 in another six months,” she said.
“That’s $40, even if the market moves to $100. But if the market goes two years and it’s $200 out of whack, we’re gonna have to put it up like massively.”
The rental market can move a lot in 12 months, meaning tenants could get a huge increase in rent when their lease comes up for renewal.
Vadillo believes landlords and property managers should make sure communication about a potential rent increase is given as soon as possible.
“When that lease comes up, the property manager should manage that narrative with tenants. You know, ‘Your lease is going to come up, you’re now going to be looking at X amount dollars per week’,” she told Yahoo Finance.
“Gives them enough time to start shopping around if they did want to see what else is out there if there’s an opportunity for them to move or opportunity to counter or negotiate.”
She added that increasing the rent can cause tenants to move out and she believes it’s far easier keeping someone in the property rather than sort out someone new.
Current protections against multiple rent hikes do not apply to fixed-term leases of less than two years, or when there is a change in the type of lease, such as from periodic to fixed term.
The Minns government hopes it will make renting in NSW “fairer, simpler, and more certain” and will help the state align with National Cabinet’s ‘Better Deal for Renters’ campaign.
Other measures to protect NSW renters
In addition to rental caps, the state government has also brought in a raft of other policies that will help them find or hold onto a place over their heads:
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ending no ground evictions to give renters and owners more clarity by introducing reasonable and sensible reasons to end a fixed term or periodic lease
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making it easier to keep pets in rental properties
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ensuring renters have a free way to pay their rent including bank transfer and the Commonwealth Government’s Centrepay
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protecting renters from having to pay for background checks when they apply for a property
Better Regulation and Fair Trading minister Anoulack Chanthivong believes renters deserve these protections.
“Ensuring renters can only be hit with one rent increase a year will provide greater certainty and protection for renters regardless of whether their lease type changes,” he said.
“By ending no grounds evictions, making it easier to have pets, and ensuring people can pay their rent without hidden charges, these landmark reforms will make it fairer for the state’s 2.2 million renters.
“This Bill is the result of the Government’s extensive consultation on how to best modernise the market with renters, owners, industry groups, experts and advocates. These reforms are focussed on getting the balance right.
“We are now one step closer to a fairer and more affordable rental market in NSW.”
Calls for end to ‘damaging’ no-grounds evictions
Leo Patterson Ross, CEO of the NSW Tenants’ Union, believes the end of no-grounds evictions will help protect tens of thousands of renters from being booted out of their home without a reason.
He told Yahoo Finance that these types of evictions can have a profound impact on a person’s mental health.
“People talk about the anxiety, the worry that being removed from their home brings them but it’s also about often being removed from their community,” he said.
“Their kids might have to be changing schools, they’re losing friends. They’re no longer part of the same social groups.
“All of this has this very damaging pressure on the person.”
Renters who disagree with an eviction decision will have appeal rights before the NSW Civil and Administrative Tribunal.
Around 28,000 no-grounds evictions were being actioned every year in NSW alone, according to consumer group CHOICE.
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