The NSW government has moved swiftly in response to the
increased impact on residential tenants as a result of the growing
number of mortgagee in possession actions. It has enacted
legislation which will, for the first time in the State's
history, offer tenants protection when mortgagees seek to recover
possession of rented premises.
On 19 June 2009 the Residential Tenancies Amendment
(Mortgagee Repossessions) Act 2009 was passed by the NSW
Parliament with immediate effect. The amendments will apply to all
existing tenancies, unless the mortgagee obtained a possession
order prior to 19 June 2009.
The legislation has introduced 3 key changes to the
Residential Tenancies Act 1987 through the introduction of
Sections 71A and 72 into the Act.
Mortgagees must now give tenants a minimum of 30 days notice, in
writing, before taking possession of any property. Previously
mortgagees were only required to give reasonable notice of the
intention to take possession.
2. No Rent Payable
During the 30 day notice period, tenants are not required to pay
any rent if the mortgagee has asked them to vacate the premises. If
tenants have paid rent in advance the tenant is now entitled to
have that rent refunded. If the refund is not made the Consumer,
Trader & Tenancy Tribunal will have the power to make the
Mortgagees are now able to authorise the Board to release a
tenant's rental bond. Previously this could only be authorised
by landlords or their agents.
Whilst removing the uncertainty of a "reasonable notice
period" the changes now expose mortgagees to the same monetary
penalties suffered by landlords if they take possession of a rental
property prior to the 30 day notice period expiring. The result is
that care will need to be taken by all mortgagees involving
tenanted properties, to ensure that the necessary notice is
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