Australia: New Laws Residential Tenancies

New Laws Covering Residential Tenancies Comes Into Force
Last Updated: 12 May 2011

The Residential Tenancies Act and Regulation both came into force as from 31 January 2011 and apply to all residential tenancies in New South Wales from that date.

Residential Tenancy Agreements (referred to as "leases" in this article) that were already in existence prior to 31 January 2011 remain valid and there is no requirement to replace those existing lease agreements with new ones. It should be noted, however, that if there are any terms in an existing lease that conflict with the new laws, then the new laws will apply (and prevail over that lease agreement).

Starting a tenancy

  1. Before the lease is entered into

    A landlord, or agent, can ask a prospective tenant to pay a "holding fee" of up to one weeks rent, but only after that prospective tenant's tenancy application has been approved.

    Acceptance of a "holding fee" means that the premises must be kept for that prospective tenant for at least seven days and must not be offered to anyone else during this time. If the prospective tenant decides not to go ahead with the tenancy then that prospective tenant forfeits the full amount of the "holding fee", not just a portion of it, as was the case under the old "reservation fee" system.

    Once a "holding fee" has been accepted, the landlord is committed to entering into a lease with that prospective tenant and if the landlord does not do so, for any reason, then the prospective tenant can apply to the Residential Tenancies Tribunal for the matter to be resolved.

    Before a tenant signs a lease the landlord is obliged to disclose a number of things, including:

    • If a sale contract has been prepared in relation to the property;
    • If a financial institution has commenced court action to take possession of the premises; and
    • Material facts about the premises that are relevant to the tenant's decision as to whether or not a tenant would want to live in the premises (such as if the premises have any significant health or safety risks, or if a serious flood, bushfire or violent crime has occurred in the premises in the last five years).

    If a landlord does not know all of the historical material facts then the landlord, or letting agent, are only obliged to disclose what they already know about the property.

  2. Failure to make these disclosures may mean that the tenant can get out of the lease and also seek an order for compensation from the landlord.
  3. Leases

    A landlord, or letting agent, must provide a tenant with a written lease in the standard form at the start of the tenancy and is no longer allowed to charge the tenant a fee for the preparation of the lease. If there is no written lease it is deemed to be a six-month agreement incorporating the terms of the standard form.

    The standard Residential Tenancy Agreement and the premises condition report have been updated and modernised and now prohibit certain lease terms such as compulsory carpet cleaning at the end of the tenancy. A tenant is still obliged to keep the carpet clean, however, and there is an exception where the landlord allows the tenant to have a cat or dog, in which case a carpet cleaning term is allowed to be inserted into the lease.

  4. Rental Bonds

    Under the new legislation, the maximum amount that can be requested as a rental bond is capped at four weeks rent, regardless of whether or not the premises are furnished, and the tenant cannot be asked to "top up" a bond to keep it at 4 weeks rent if the rent goes up during the tenancy.

    Rental bonds must be lodged with the Department of Fair Trading and there are now time limits imposed for payment of the bonds to the Department. Agents have 10 working days from the end of each month to lodge all of the bonds that they have collected in that month and landlords have 10 working days from the date that they receive a bond to lodge it.

    Where both parties agree, a bond can be paid by instalments and the landlord, or agent, will be able to retain the part payments until either the bond is fully paid or 3 months has elapsed, whichever happens first.

During the Tenancy

The new form of standard Residential Tenancy Agreement spells out many of the rights and obligations of both parties, but some of the more important items are as follows:

  1. Rent payments and receipts

    Tenants must be given at least one way to pay their rent that does not attract a fee.

    Tenants will have to pay the landlord's bank charges if a rent cheque or direct debit payment is dishonoured.

    The maximum amount of rent in advance that can be requested from any tenant is two weeks, but tenants can volunteer to pay more if they wish to do so.

    Landlords, or agents, can keep rent ledgers electronically, or in any other format, and tenants can ask for a copy at any time. Such requests must be met within seven days.

  2. Alterations

    Tenants must still get written permission before doing any alterations to the property, but now landlords must not unreasonably refuse requests for a tenant to add a fixture or make a minor change to the property. If there is a dispute over permission, either party can take the matter to the Tribunal to have it resolved.

  3. Protection for domestic violence victims

    A person who has taken out an apprehended violence order and is living in a rented property now has the right to seek the landlord's permission to change the locks and seek to take over the tenancy if their name is not already on the lease, so long as the AVO prohibits the "violent person" from accessing the premises. The landlord, or agent, should be given a copy of the new set of keys within seven days.

  4. Water usage

    Under the old laws, tenants could be charged for water usage where there was a separate water meter, but under the new laws water efficiency measures have been introduced.

    This means that rented premises must be made water efficient if tenants are to pay for their water. Landlords who wish to continue charging their existing tenants for water have until 30 January 2012 to install water efficient measures, but, for new tenancies, they will have to install those measures before starting a new lease if they want to charge their tenants for water usage.

    Another change in the law is that Landlords must seek payment from their tenant within three months of receiving a water bill and tenants will have 21 days to pay their landlord for the water used.

  5. Sub-letting

    Under the changed law, a landlord cannot unreasonably refuse a tenant's request to bring in a new co-tenant or to sub-let part of the premises, such as a granny flat, spare room or parking space.

    A landlord can refuse a sub-letting or co-tenancy request if it would result in overcrowding, if the proposed person is listed on a bad tenant database, if the number of occupants permitted under the lease would be exceeded or for any other good reason. If there is dispute on this, either party may take the matter to the Tribunal to have it resolved.

    Landlords have complete discretion to refuse a request from a tenant to sub-let the whole premises.

  6. Rights of co-tenants

    The new laws recognise the rights of co-tenants for the first time.

    If there is a dispute, a co-tenant may apply to the Tribunal for an order to terminate their own tenancy, the tenancy of another co-tenant, or the tenancy as a whole.

    Once the fixed term period is over, a co-tenant can give 21 days notice if they want to move out and end their contract with the landlord. This will bring an end to their joint legal liability with the other co-tenants for things like future rent and damage to the property. The remaining co-tenants will then have to make fresh arrangements with the landlord about continuing the lease, or not, or bringing in a new co-tenant.

  7. Sale of rented premises

    If rented premises are to be sold, the tenant must be given written notice of the proposed sale at least 14 days before the first inspection is to take place. The selling agent must try to come to an agreement with the tenant about what days and times the premises will be open for inspection. Two inspection periods each week are allowed but more can be agreed on.

    If the agent and the tenant cannot agree on inspection times, the agent, or landlord, still has the right to show the property to potential buyers, even without the tenant's consent, provided that the tenant has been given at least 48 hours notice.

  8. The tenant may ask for a rent reduction during the inspection period in compensation for being inconvenienced, the amount of which would need to be negotiated.

Ending a tenancy

  1. Termination notices

    Under the new Act, a landlord, or agent, must give at least 30 days written notice if they want the tenant to move out when the fixed term period ends. This has increased from 14 days.

    When the fixed term has already ended, the landlord, or agent, must give at least 90 days notice if they want the tenant to move out. This has increased from 60 days.

    The new laws also allow the tenant to move out at any time after receiving notice from the landlord without having to give their own notice and the tenant is only liable to pay rent until they give vacant possession to the landlord, including returning the keys.

    Under the new Act, however, any notice, including termination notices, issued by either party can be hand delivered to the mail box of the other party (or the landlord's agent).

    Another change is that the Tribunal can overlook errors in the content of a termination notice or the way that it has been served if it decides that the person receiving the notice has not been significantly disadvantaged by those errors.

    A tenant is still required to give at least 14 days notice if the fixed term period is due to end and at least 21 days notice if that period has already ended.

  2. Rent arrears evictions

    Being in rent arrears is still a reason for a landlord to evict a tenant.

    The termination notice can now be hand delivered to the tenant's mail box and the application to the Tribunal for a termination order can be made at the same time as the notice is given to the tenant, cutting up to two weeks off the time that it takes to have an application heard.

    The termination notice must spell out for tenants that they have three options :

    1. pay the arrears amount in full
    2. follow a repayment plan that is acceptable to both parties, or
    3. move out by a specified termination date

    If the tenant offers to pay the landlord, or agent, a full payment of rent arrears at any time, it must be accepted, even if this is at the last minute.

  3. If the tenant is repeatedly late in rent payments an application can be made to the Tribunal for a termination order and the Tribunal can make such an order in those circumstances. That order can still be enforced even if the tenant pays the rent arrears.
  4. At the end of a fixed term

    At the end of a fixed term tenancy, if the landlord wants the tenant to move out a termination notice would normally be served on the tenant and, if the tenant doesn't move out by the due date, the landlord, or agent, can apply to the Tribunal for an order to terminate the tenancy.

    Under the old law the Tribunal could use its discretion to allow the tenant to stay in the premises, but, under the new law this discretion has been completely removed. Provided that the landlord, or agent, served a proper termination notice, the Tribunal must order the tenant to vacate the property, unless that notice was retaliatory action by the landlord for the tenant having exercised proper rights under the lease.

  5. Breaking an agreement

    Under the new law there are four specific situations when a tenant can break a fixed term lease without penalty. These are:

    1. if they accept an offer of public housing
    2. if they need to move to a nursing home
    3. if the landlord puts the property up for sale without telling the tenant before the lease was entered into, or
    4. where a co-tenant is the subject of a final AVO barring them from entering the premises.

    In these situations the tenant can give 14 days notice to end the tenancy and is not liable to pay any compensation or other amount to the landlord.

    Under the new law the parties to a lease can agree to have a break fee in the lease which will apply if the tenant breaks the lease before the end of the fixed term period.

    The amount of the break fee is set under the new law:

    • in the first half of the fixed term period it is six weeks rent
    • in the second half of the fixed term period it is four weeks rent

    Upon the death of a tenant the tenancy can be terminated at any time by the tenant's executor, any other legal personal representative, or the landlord. In these situations the estate will only be liable to pay an occupation fee, equal to the rent, until vacant possession is given to the landlord.

  6. Immediate grounds for eviction

    A landlord can go straight to the Tribunal for a termination order, without having to give a termination notice if:

    • a tenant uses the premises for illegal purposes
    • a tenant injures, threatens, abuses, intimidates or harasses the landlord, or their agent, employees or contractors
    • any occupants cause serious damage or injury, or
    • serious damage or injury is caused to neighbouring property
  7. Goods left behind

    Under the new law, rubbish and perishable items left behind after a tenant moves out can be disposed of immediately. For all other goods, including a tenant's personal documents, a landlord is required to make reasonable attempts to notify the former tenant that their goods will be disposed of unless collected within a certain period.

    General goods, such as furniture and clothing, must be kept for at least 14 days. Personal documents, such as photos and bank statements, must be kept for at least 90 days.

    Landlords, and agents, must make a reasonable effort to notify the former tenant about the goods, but the notification can be given in writing, in person or by telephone and the goods can be collected during the notice period.

    The tenant can be charged a storage fee equal to the rent if the goods left behind are sufficient to hinder re-letting of the premises. A maximum of two weeks fee can be charged.

    If the tenant cannot be contacted, or doesn't want the goods left behind, the landlord, or agent, can dispose of the items after the end of the notice period in any appropriate legal manner. Official documents such as passports etc can be returned to the issuing authority.

This article provides a short overview of a quite complex law concerning residential tenancies, and should not be thought to provide the answer to all circumstances. Whenever a lease is entered into, whether you are a landlord or tenant, it is always best to seek legal advice to ensure that you understand your rights and obligations under the new Act and regulations. For further information on residential tenancies, contact the Coleman Greig Property Law team on tel: 02 9635 6422.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions