No Grounds Evictions will be banned in NSW

What Landlords and Tenants need to know

The New South Wales government has announced plans to ban "no grounds" evictions, bringing changes for landlords and tenants from 2025. The details are yet to be legislated, but NSW Premier Chris Minns has officially announced the proposed changes.

This move aims to provide greater security for tenants while balancing the rights of property owners.

The critical change is that landlords must have reasonable grounds for eviction.

Reasons include:

• Lease breaches by either party;
• Placing a property on the market for sale;
• Renovations or significant repairs, the property can not be listed for sale within four weeks;
• Change of use of the property;
• The owner moving into the property, and
• Change of tenant's eligibility for the property (i.e. affordable housing program)

Notice periods from landlord to tenant will also be revised:

• Periodic notice periods will remain the same
• Fixed-term leases of 6 months or more will increase from 60 to 90
  days notice
• Fixed-term leases of less than six months will increase from 30 to 60 days notice

The Impact on Tenants

For tenants, the ban on "no ground" evictions means greater stability and security in their rental arrangements, providing them with longer notice periods if the landlord requires them to vacate the property. On the downside, this change may cause less availability of rental properties due to reduced turnover or landlords opting to sell their properties and invest their funds elsewhere. Our advice to tenants is to ensure that you acquire good references from past property rentals, keep your rental payments up to date and leave properties in excellent condition. The proposed changes may lead landlords to be more conservative when placing new tenants, and we anticipate that past tenancy history could become more important to landlords. Supply may also become constrained, ironically making the rental market more competitive.

The Impact on Landlords

Landlords should rest assured that the lease will still protect their assets, and they still have the right to evict tenants who do not pay rent, damage the property, or breach their lease in any way. If a landlord's plans for their investment property change, such as needing or wanting to sell their property, family moving in or wanting to occupy it themselves, they will need to have the conversation with tenants well in advance, adhering to the new notice periods. Our advice to landlords is to ensure a thorough vetting process before securing a new tenancy; reference checks will be vital to reducing the chance of disharmony between landlord and tenant and reducing the risk of tenancy disputes.

Advantages of a great property manager

Property managers will play a crucial role in navigating these changes. They will need to stay informed about the new regulations and guide landlords through the process of complying with them. Clear communication with both landlords and tenants will be essential to managing expectations and ensuring smooth transitions.

Critical responsibilities for property managers will include:

• Educating landlords about the acceptable grounds for eviction
• Helping landlords document and justify evictions to comply with new requirements
• Advising tenants of their new rights and protections under the updated laws
• Mediating disputes that may arise due to misunderstandings of the new regulations
• Attending NCAT hearings on the landlord's behalf to address tenancy disputes

The ban on "no grounds" evictions in NSW promises greater security for tenants and requires landlords and property managers to adapt to new regulatory landscapes.

Some details about the new laws are yet to be confirmed. However, spokespeople in the property industry have some concerns, including a reduced supply of rental properties due to fewer investors entering the market and a decreased turnover of rental properties. We could also see a surge in evictions by worried landlords ahead of the proposed changes coming into effect.

Tenants who believe they have been served an eviction without grounds must lodge a complaint with the NSW Fair Trading Commission for further investigation, as no government regulatory body will officially monitor individual circumstances. Whilst penalties have yet to be outlined for landlords who breach these new regulations, the NSW government has confirmed there will be disciplinary action. Landlords and tenants with genuine concerns about the legislation can raise it with their State Member of Parliament before the proposed changes are passed.

We are for apartments.

If you are considering buying, selling, leasing or property management in Barangaroo, Sydney City, Millers Point, Circular Quay, Pyrmont or surrounds, we would love to help you. Ayre Real Estate specialises in apartment living and ready to help find your ideal property. Talk with us today to find out more.