Residential Tenancies Act 1986 Update: Residential Tenancies Amendment Act 2020
The Residential Tenancies Amendment Act 2020 introduces a series of broad amendments to the Residential Tenancies Act 1986 (RTA). These amendments will take effect in three stages, but the first stage has already begun: on 12 August 2020.
Rent increases are now permitted once every 12 months (previously once every 6 months). Any rent increase notices issued to tenants on or after 12 August 2020 must comply with this new restriction.
From 11 February 2021, the most significant of the amendments will come into force, including the controversial abolition of ”no fault” 90-day termination notices. Termination of tenancies from this date will be allowed only in limited circumstances; for example:
- Landlords will be able to terminate a tenancy for non-payment of rent if the rent has been at least 5 working days late on three separate occasions within a 90-day period, and the landlord has given the required written notice to the tenant on each of those occasions. Currently, landlords may terminate tenancies if the rent is 21 days in arrears.
- Landlords will be able to terminate a tenancy for “anti-social behaviour” if the tenant engages in “anti-social behaviour” on three separate occasions within a 90-day period, and the landlord has given the required written notice to the tenant on each of those occasions. “Anti-social behaviour” is defined as harassment or any other act or omission that reasonably causes alarm, distress, or nuisance that is more than minor.
- Landlords must give 63 days’ notice (currently 42 days) if they or their family require the premises for their own purposes.
- Fixed-term tenancies will automatically become a periodic tenancy; unless, during the term of the fixed-term tenancy, the parties agree not to continue with the tenancy, the tenant gives 28 days’ notice of their intention not to continue, or the landlord gives the required termination notice.
Other changes to the RTA include:
- Tenants will be permitted to make “minor change” to the premises.
- Tenants will be permitted to assign the tenancy at any time during the tenancy with the consent of the landlord (which cannot be withheld unreasonably). Landlords must consider and respond to a tenant’s request to assign and a failure to do so is an unlawful act. Any provision in a tenancy agreement that prohibits the tenant from assigning the tenancy will be of no effect.
- Landlords must not invite or encourage prospective tenants to place bids for rent (exceeding the advertised or offered amount of rent).
- The Tenancy Tribunal may make “pecuniary penalty orders” against landlords of six or more tenancies where an unlawful act has been intentionally committed relating to certain landlord’s responsibilities under the RTA. The maximum pecuniary penalty is $50,000.
- The monetary jurisdiction of the Tenancy Tribunal will increase to $100,000, which is double the current limit of $50,000.
By 11 August 2021, there will be the following additional changes to the RTA:
- A tenant who is a victim of family violence may withdraw from the tenancy by giving 2 days’ notice with qualifying evidence.
- Landlords will be able to terminate a tenancy by giving 14 days’ notice if the tenant has physically assaulted the landlord, the owner, a member of the landlord or owner’s family, or the landlord’s agent, and charges have been laid against the tenant by the Police.
The amendments to the RTA have caused considerable controversy and, unsurprisingly, a divide between landlords’ and tenants’ associations. The amendments will, however, come into force. Landlords who are prepared and who ensure compliance with these changes at the outset will be much better placed for a smooth transition into the changing residential tenancy landscape.
If you would like to discuss how the latest changes to the RTA might impact on your investment property, please do not hesitate to contact Mitch Singh (DDI: (09) 969 1214) or Paul Kim (DDI: (09) 913 2257).