Legislation for landlords: five key updates

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Following the update to residential tenancy laws that came into effect in March 2020, landlords must make some critical changes to ensure they stay compliant with the new legislation and protect tenants. Here are five of them:

 

1. Mandatory break fees for fixed-term agreements

Before the changes, tenants were subject to a six-week break fee if they decided to end the tenancy early. Under the new laws, this break fee changes to four weeks or less. This means the tenant must pay the landlord four weeks rent upon breaking the agreement if less than 25% of the fixed-term has passed, or less if they have been renting for a greater proportion of their agreed term.

This amount reduces proportionately as the tenancy agreement progresses. Tenants must pay three weeks rent when 25-50% of the fixed term has passed, two weeks rent when 50-75% of the fixed term has passed, and one week’s rent if more than 75% of the fixed term has passed.

 

2. Changes to the way landlords issue rental increases

In a bid to increase transparency between landlords and their tenants, there have been changes to the way in which landlords can issue rental increases. Under the new legislation, landlords will only be able to issue rent increases for periodic tenancies once per year. This change protects tenants from unpredictable rent hikes, providing some stability once their fixed-term agreement ends.

Landlords are also incentivised to provide written notice of rental increases, by outlining them in the agreement. Provided they do this, landlords will no longer be required to provide 60 days’ written notice of rent increases for fixed-term contracts of less than 24 months.

 

3. Penalties for breaching smoke alarm rules

Under the updated rules, landlords must ensure their properties are equipped with functioning smoke alarms to provide life-saving benefits to tenants. The landlord has several obligations under the new legislation, which includes annual smoke alarm checks and the repair or replacement of alarms that aren’t working within two days.

Penalties apply to landlords who do not comply with these rules, and they may enter the property without consent from the tenant to meet these obligations defined in the new legislation, as long as they have notified the tenant of their intent to do so.

 

4. Allowing tenants to make alterations to the property

Tenants are now able to make a number of alterations to the property, without requiring prior consent from the landlord. This change includes alterations that do not make permanent structural or cosmetic changes to the property, including:

  • Securing furniture to walls for safety,
  • The installation of child safety gates,
  • Hanging paintings or wall art,
  • Installing wireless security cameras outside the property.

These changes, along with others outlined in the new laws, can take place provided tenants return the property to its original condition once the tenancy ends, accounting for fair wear and tear.

 

5. Disclosing information to tenants

Finally, the new legislation states landlords must advise their tenants of the following when they relate to the property in question:

  • Significant health and safety risks,
  • Development applications or certificates that relate to external combustible cladding,
  • Fire safety or building product rectification orders (or a notice to issue an order).
  • Landlords must notify their tenants of any of the above within 14 days of becoming aware of the fact.

In summary, the new changes protect tenants from unfair terms or health and safety risks while residing at the property. It is a landlord’s duty of care to comply with these rules — and this is something we can help with as experienced agents. Get in touch to find out more.

 

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