Residential Tenancies Act review
The residential property market in NSW is entering a new era. There are now more than 820,000 residential rental households across the state, and demand for quality rental accommodation is set to rise over the coming years as more and more people move to NSW.
Landlords, tenants and property managers need residential tenancy laws that respond to the market’s contemporary needs and strike a balance between flexibility and certainty.
The mandated five-year statutory review of the Residential Tenancies Act 2010 kicked off in June 2015, with NSW Fair Trading completing the review and releasing its recommendations for amendments to the Act in June 2016. Areas recommended for amendment were wide-ranging including pre-tenancy disclosure requirements, responsibility for the payment of water and utility charges, calculation of break fees, electronic service of notices and much more.
PROGRESS: In June 2015, knowing that the mandated five-year statutory review was approaching, the REINSW Property Management Chapter committee formed a dedicated sub-committee. Together with REINSW, this sub-committee has worked tirelessly over the last two and a half years to help shape any future legislative framework.
Since the release of the recommendations, REINSW has lodged four written submissions. We’ve also has met regularly with government officials to discuss the proposed amendments with a view to ensuring the Draft Bill reflects a fair balance between the interests of landlords, tenants, agents and the market.
Each version of the Draft Bill has been provided to REINSW on a ‘Cabinet-in-Confidence’ basis. Therefore, REINSW has not yet been able to share details of any proposed reforms set out in the Draft Bill or our submissions in response. As soon as this confidentiality is lifted, details will be shared with members on the REINSW website.
The Bill is expected to be presented to Parliament next year.
Timeline to residential tenancies reform
NOTE: The following is an updated version of the timeline that appeared on page 21 of the July/August 2017 edition.
June 2015 REINSW forms statutory review sub-committee
October 2015 NSW Fair Trading releases Discussion Paper.
January 2016 REINSW lodges submission in response to Discussion Paper.
June 2016 NSW Fair Trading releases recommendations.
January 2017 REINSW submits Position Paper in response to recommendations.
April 2017 NSW Fair Trading provides Draft Bill to REINSW “in confidence”. REINSW lodges submission in response and subsequently meets with Fair Trading policy advisors to discuss key issues.
June 2017 NSW Fair Trading provides second Draft Bill to REINSW “in confidence”. REINSW lodges submission in response and subsequently meets with Fair Trading policy advisors to discuss key issues.
August 2017 NSW Fair Trading provides third Draft Bill to REINSW “in confidence”. REINSW lodges submission in response.
November 2017 REINSW meets with NSW Fair Trading policy advisors to discuss key issues ahead of release of a further version of the Draft Bill. REINSW lodges another submission in response.
FIND OUT MORE ABOUT RESIDENTIAL TENANCIES REFORM on reinsw.com.au/RTAreview
Short-term holiday letting reform
With the release of the Short-term Holiday Letting in NSW Options Paper by the NSW Government in July 2017, the NSW Government signaled its intention to crack down on a sector that has been growing rapidly and shows no signs of slowing down. The emergence of online booking providers has made it easier than ever before to book and pay for stays in private properties, and the development of the sharing economy has seen people become more willing to open the doors of their homes to strangers.
But, like many sectors impacted by technological disruption, regulation has not kept pace with the evolution and growth of short-term holiday letting. Regulation of the sector across New South Wales has lagged and can be described as piecemeal at best, with local councils taking different approaches to regulate the activity within their jurisdictions. With no standardised approach to short-term holiday letting, confusion often reigns.
REINSW applauds the NSW Government’s initiative in seeking industry and stakeholder input to create a robust and workable framework for this sector, which is one that will only continue to grow into the future. Such a framework will provide greater clarity and guidance for all stakeholders, and will ensure the economic benefits of the sector continue to flow while also managing the social and environmental impacts.
PROGRESS: REINSW lodged a comprehensive submission in response to the Options Paper. Due to the expert input of members specialising in the short-term holiday letting sector (including property managers and strata managers), the submission not only addressed the specific points set out in the Options Paper, but went much further. It provided the government with a detailed account of changes to the regulatory framework that should be considered to ensure fair and equitable outcomes for participants in the sector.
This is the just the first stage of what will no doubt be a long road to securing effective reform. But REINSW is committed to working closely with the government, industry associations, online booking providers and the wider community to create a better regulatory framework for the sector.
READ THE FULL SUBMISSION on reinsw.com.au/submissions
Bringing about a standard retail lease for strip shops has been on REINSW’s lobbying agenda for a number of years. Similar to the standard Residential Tenancy Agreement provided for in the Residential Tenancies Act 2010, a standard retail lease would streamline processes, allow leases to be entered into on the spot and make dispute resolution easier.
After much consultation with REINSW and other stakeholders, the government announced amendments to the Retail Leases Act 1994 in November 2016. The stated aims of the amendments were to increase transparency, improve protections and enhance operational efficiency.
OUTCOME: The amendments to the Retail Leases Act commenced operation on 1 July 2017. REINSW strongly believes that the retail leasing industry and small businesses throughout NSW have been let down by the government’s failure to introduce a standard retail lease for strip shops. If retail leasing had gone this way, the retail sector would have enjoyed huge economies and efficiencies. Instead, leaving this out of the reforms is an opportunity lost.
Not to be defeated, REINSW will continue to lobby for this important reform.
Fire and Emergency Services Levy
OUTCOME: The NSW Government delayed introducing the FESL indefinitely after REINSW raised concerns that small and medium businesses might face an “unreasonable burden”
The new FESL was to be based on the unimproved value of property, which has nothing to do with the cost of running emergency services, as opposed to the current levy being based on the replacement value of the structure. The levy would have left a large number of households worse off, as well as commercial and industrial business.
REINSW lobbied hard on this issue and it’s great to see the government listened to us.
The NSW Government had planned to abolish the current Fire and Emergency Services Levy (FESL) (added to home building, contents and some motor vehicle insurance premiums) on 1 July 2017. Under the new FESL, the state’s firefighters and the State Emergency Service was to be funded through a property-based levy.
Reform of the NSW planning system has long been on REINSW’s lobbying agenda. Planning processes are currently convoluted. The development approval system in NSW can only be described as “not yes”, “not no”, but “maybe” – which is expensive, to say the least.
Requirements also differ from one council to the next, which only adds to the length of the process and the unnecessary expense.
PROGRESS: In a move welcomed by REINSW, the NSW Government released proposals for planning reform in January 2017. The proposed reforms are a good first step to improving the process, but there’s still ample opportunity for further significant improvements.
Councils need to provide certainty when it comes to development applications. If it’s a “yes”, it needs to be clear and unequivocal. And if it’s a “no”, it also needs to be clear so people can learn from the process and don’t pursue approval in the future when it’s unlikely to be granted.
REINSW will continue to work with the government to ensure any planning reform plays an essential role in providing the right type of housing supply and will help reduce costs.
- Consumer law – Addressing the discrepancies between the Australian Consumer Law and the Property, Stock and Business Agents Act (specifically in relation to underquoting, material fact and vendor referral websites).
- Electronic signatures – Providing clarity for agents about when they can and can’t use electronic signatures on real estate forms and agreements.
- Longer-term tenancies – REINSW proposed a model for longer fixed term tenancies in response to recommended changes as part of the Residential Tenancies Act 2010 statutory review and attended a roundtable discussion with NSW Fair Trading to discuss the issues.
- Strata reform – Providing clarity for agents about how the new strata framework impacts them and how to best implement reforms.
- Taxation – Encouraging a sensible debate in relation to the reform of state property taxes (including stamp duty and land tax) that are narrow-based and discriminatory, and have an adverse impact on the property market and health of the NSW economy.
- Underquoting – Seeking further clarity for agents about how to implement underquoting laws without creating a massive compliance burden.
- Window safety devices – Seeking clarity regarding the implementation of window safety devices in strata buildings. love homes and I love helping people, so real estate combines these two things really well for me,” he explained.