Changes to Residential Tenancy Laws effective from 23 March 2020.

Residential Tenancy laws govern the tenant’s renting experience, while contemporaneously ensuring that Landlords can effectively manage their properties. The changes effected, seek to circumvent disputes arising over repairs and maintenance, increase protection and certainty for tenants and to clarify the rights and obligations of tenant and landlord parties.

Minimum standards to clarify ‘fit for habitation’

Landlords are currently required to provide the rented property in a reasonable state of cleanliness as would be ‘fit for habitation’. The recent changes put forward seven (7) minimum standards which clarify ‘fit for habitation’:

1. Be structurally sound
2. Have adequate natural or artificial lighting in each room, except storage rooms or garages
3. Have adequate ventilation
4. Be supplied with electricity or gas, and have enough electricity or gas sockets for lighting, heating and other appliances
5. Have adequate plumbing and drainage
6. Have a water connection that can supply hot and cold water drinking, washing and cleaning
7. Have bathroom facilities, including toilet and washing facilities that allow user’s privacy

The property may have other affectations which render the premises unfit for a tenant to live in, despite satisfying the 7 minimum standards. These standards must be maintained throughout the tenancy, by making repairs as necessary.

New smoke alarm obligations for landlords

Landlords must ensure that smoke alarms are installed in the rented property and are in working order.

The provisions allowing Landlord’s to enter the property without consent have been extended to specifically include inspecting or assessing the need for repairs to, or replacement of, a smoke alarm if proper notice has been given to the tenant.

Changes of a ‘minor nature’

Tenants may install fixtures or make alterations, additions or renovations if they have the Landlord’s written consent, or if permitted by the tenancy agreement. The tenant’s request for a fixture or alteration is of a ‘minor nature’ the landlord must not unreasonably withhold consent.

The new regulation details the nature of fixtures or alterations that would be deemed minor in nature:

1. Securing furniture to a non-tiled wall for safety reasons
2. Fitting a childproof latch to an outdoor gate of a single dwelling
3. Inserting fly screens on windows
4. Installing or replacing an internal window covering e.g. curtains and removeable blinds
5. Installing cleats or cord guides to secure blind or curtain cords
6. Installing child safety gates inside the property
7. Installing window safety devices for child safety
8. Installing hand-held shower heads or level-style taps to assist elderly or disabled occupants
9. Installing or replacing hooks, nails or screws for hanging paintings, picture frames and other similar items
10. Installing phone line or internet connection
11. Planting vegetables, flowers, herbs or shrubs (shrubs that don’t grow more than 2 meters) in the garden if existing vegetation or plants do not need to be removed
12. Installing a wireless removable outdoor security camera
13. Applying a shatter-resistant film to window or glass doors
14. Making modifications that don’t penetrate a surface, or permanently modify a surface, fixture of structure of the property.

New break fees for fixed term agreements

Mandatory fees apply to all fixed-term agreements of 3 years or less, when a tenant elects to terminate the agreement early. This applies to agreements that are entered into from 23 March 2020 onwards.

The break fees are:

• 4 weeks rent if less than 25% of the agreement has expired
• 3 weeks rent if 25% or more but less than 50% of the agreement has expired
• 2 weeks rent if 50% or more but less than 75% of the agreement has expired
• 1 week’s rent if 75% or more of the agreement has expired.

For example:

• If 7 months of a 12-month tenancy agreement (or 58%) has expired, a tenant would need to pay a fee equal to 2 weeks’ rent to the landlord to end the agreement early.
• If 2 months of a 6-month tenancy agreement (or 33%) has expired, the tenant would need to pay a fee equal to 3 weeks’ rent to the landlord to end their agreement early.

New material facts

A Landlord or agent now need to disclose if the property:

1. Has been used to manufacture or grow a prohibited drug or prohibited plant in the last two (2) years.
2. Is a strata scheme where scheduled rectification work or major repairs will be done to common property during the fixed term of the agreement.
3. Is part of a building to where a:
   • Fire safety or building product rectification order (or a notice of intention to issue one of these orders) has been issued for combustible cladding.
   • Development or complying development certificate application for rectification has been lodged for external combustible cladding.

New standard form of agreement

The standard form of agreement has been updated to reflect the rights and obligations between landlords and tenants under the new laws.

The changes aim to increase transparency between landlords and tenants about their rights and obligations and information relevant to the rented property.

Other improvements to the standard form of agreement include:

1. An option for a five (5) year fixed term to encourage landlords and tenants to consider longer fixed-term agreements
   • If a lease is registered, a notation appears on the landlord’s certificate of title over that piece of land. This benefits the tenant, especially if the landlord sells the property – the new owner, who becomes the new landlord, must recognise the lease.
2. A checkbox for landlords to indicate whether electricity or gas is supplied to the property from an embedded network
3. An option to allow landlords and tenants to opt into receiving or sending notices and other documents by email
4. New terms requiring the landlord to advise the tenant in writing within 14 days of becoming aware of the fact that the property:
   • is subject to a significant health or safety risk and the nature of the risk.
   • is part of a building where a development application or complying development certificate application for rectification has been lodged regarding external combustible cladding.
   • is part of a building where a fire safety order or a building product rectification order (or a notice of intention to issue one of these orders) has been issued regarding external combustible cladding.
5. A new term for landlords to allow a tradesperson to enter the property to carry out maintenance or repairs needed to avoid health or safety risks to any person, or to avoid a risk that water, utilities or other services may be disconnected.

The new standard form of agreement is in the new Regulation and must be used from 23 March 2020 onwards.

Do the laws apply to existing residential tenancies?

Yes, the changes apply to existing residential tenancies. However, some of the new laws will not apply to existing agreements entered into before 23 March 20 20. For example:

1. New mandatory break fees only apply to new fixed-term agreements that are 3 years or less
2. New landlord information statement requirements only apply when entering into a new tenancy agreement
3. New information disclosure obligations apply before entering into a new tenancy agreement.

As these amendments have come into effect from 23 March 2020, it is critical that both Landlord and tenant parties are aware of their rights and obligations in respect of residential tenancies. In doing so, parties are able to foster a positive, transactional nature and mitigate disputes as intended by virtue of the amendments.

For all enquiries in relation to Residential Tenancy matters or advice, please contact our expert team today.