Major Changes to NSW Tenancy Laws: What Landlords and Tenants Need to Know

Significant reforms to the Residential Tenancies Act in NSW have now come into effect, marking a major shift in how rental agreements are managed across the state.

Outlined in the Residential Tenancies Amendment Regulation 2025, these updates are designed to strike a fairer balance between tenants’ rights and landlord obligations. With more than 2.3 million renters in NSW, this is a positive step toward a more transparent, stable, and modern rental market.

Let’s break down the key changes and what they mean for you.

1. Goodbye to ‘No-Grounds’ Terminations

Landlords must now provide a valid reason to end a lease — offering renters greater security and clarity around their rights. This reform applies to both fixed-term leases (at the end of their term) and periodic agreements.

Valid reasons include:

• Breach of the lease (e.g. non-payment of rent or property damage)
• The property is being sold with vacant possession
• A change in use (e.g. converting the home into a business)
• Major repairs, renovations, or demolition
• The landlord or family member is moving in
• Employment-linked tenancy that has ended

Additionally, landlords must issue a formal termination notice, including a clear statement of rights and responsibilities. In some cases, supporting documents must also be provided. More information is available on the NSW Fair Trading website.

2. Pet Requests Now Have a Process

Tenants now have the right to request to keep a pet, and landlords can only refuse on reasonable and specific grounds, such as:

• Lack of appropriate fencing or open space
• High likelihood of property damage
• More than four animals already at the property

This change opens up rental opportunities for pet owners while still ensuring landlords have a say in protecting their properties.

3. Rent Increases Now Capped

Rental increases are now limited to once every 12 months, applying to all leases, including those under two years.

Note: Different rules apply for leases signed before 13 December 2024, so be sure to check your lease agreement.

4. No More Application Fees

Tenants can now apply for rental properties without incurring upfront costs. Charging fees for applications, tenancy agreements, or background checks is no longer allowed.

This makes the process more accessible and equitable for all prospective tenants.

5. Flexible, Fee-Free Rent Payments

Landlords must offer fee-free rent payment methods. This includes options like:

• Bank transfer
• Commonwealth Centrepay

This change ensures that tenants are not financially penalised just for paying rent.

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When Do the New Rules Apply?

• From 31 October 2024:
  • Ban on application fees
  • Cap on annual rent increases
• From 19 May 2025:
  • Valid reasons required to end a lease
  • Pet consent process
  • Fee-free rent payment options
  • Longer notice periods for some terminations
  • Re-letting restrictions for certain terminations

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Re-Letting Restrictions Now Apply

If a tenancy ends due to:

• Change in property use (no longer a rental): A 12-month ban on re-letting applies.
• Repairs or renovations: A 4-week ban applies.

Leasing a property within these restricted periods without approval from NSW Fair Trading may result in penalties.

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What This Means for You as a Landlord

Owning an investment property is a great way to build wealth — but it comes with responsibilities. Having the right property manager on your side ensures you’re protected, compliant, and maximising your investment’s potential.

At Tate Brownlee Real Estate, our experienced property management team is across every change and ready to guide you through them.

We pride ourselves on:

• Staying up to date with legislation
• Finding and retaining quality tenants
• Managing your property proactively and professionally

Need help navigating these changes?
Contact us today or request a free rental appraisal to ensure your property is managed in line with the new laws.