New Rental Reforms in NSW

Tenancy Laws in NSW have undergone some of the most significant changes in decades. Hills Prestige Property Management are here to assist with breaking them down here for you.  

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The changes include:-

• How often you can increase rent

• The circumstances in which you can give a tenant a termination notice

• New rules about pets in rental properties

• Free of charges ways for a tenant to pay their rent

What This Means if You're Selling a Property That Has a Tenant

If you're selling a property in NSW that currently has a tenant in place, it's important to understand how the latest rental reforms may impact your sale process. From changes to termination notices to new restrictions on re-letting the property, these updates could affect both your timing and obligations during the conveyancing process.

Here's what you need to know:

Terminating Leases: New Rules for Landlords

One of the most significant changes is the removal of"no grounds" termination notices. Landlords can no longer end a lease simply because they want to sell or at the end of a fixed term. Now, you must have one of the prescribed reasons under the Residential Tenancies Act to terminate a tenancy.

When selling a property with a tenant, you can only terminate the lease if:

• You or the buyer intend to occupy the property (with 6 months' minimum residence required).
• The property is being demolished.
• It needs to be vacant for significant renovations or repairs.
• The property is being sold and vacant possession is a condition of the sale.

Each of these reasons requires appropriate notice periods, and these must be observed strictly. Failure to do so may result in delays ordisputes that can impact settlement.

Re-letting Exclusion Periods: What You Need to Know

These are new restrictions that prevent landlords from re-letting a property too quickly after terminating a tenancy for certainreasons. This is particularly relevant when you're selling with the intention to remove the tenant.

Re-letting exclusion periods include:

• 12 months if the premises will no longer be used as a rental property.
• 6 months if the reason for termination is a proposed sale, demolition, or a landlord/family member intending to move in.
• 4 weeks if the property is being vacated for significant renovations or repairs.

It's an offence to re-let the property during these exclusion periods without approval from NSW Fair Trading.

These rules are designed to protect tenants and ensure landlords follow through on the stated reason for ending a lease. If you're planning to sell and require vacant possession, it's vital to factor these timelines into your sales strategy.

ALL REQUIRED MINIMUM NOTICE PERIODS

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‍Other Changes to Consider for Landlords

In addition to the key changes that affect lease terminations and re-letting, there are other reforms that landlords should beaware of when selling a property in NSW:

• Rent Increases: Limited to once every 12 months for all leases commencing from 31 October 2024.
• Pets in Rental Properties: From 19 May 2025, landlords can only refuse a tenant’s request to keep a pet under specific circumstances. Silence after 21 days = automatic approval.
• Rent Payment Methods: Landlords must offer tenants at least one free way to pay rent, such as bank transfer. Use of apps or payment platforms must not be mandatory or come with extra fees.

These changes can influence the attractiveness of your property to prospective buyers, especially investors. It's important to disclose any active tenancies, rental terms, and compliance with the new legislation as part of your conveyancing process.

Frequently Asked Questions

Can I still end a lease because I want to sell?

Not on that basis alone. "No grounds" termination notices have been abolished, so wanting to sell or simply reaching the end of a fixed term no longer justifies ending a tenancy. You now need one of the prescribed reasons under the Residential Tenancies Act. Where a sale is involved, that means either you or the buyer intending to live in the property for at least six months, the property being demolished, vacancy being needed for significant renovations or repairs, or vacant possession forming a condition of the sale. Each reason carries its own notice period, applied strictly.

What are re-letting exclusion periods?

They stop a landlord putting the property back on the rental market too soon after ending a tenancy, and they exist to ensure the stated reason for termination was genuine. Three periods apply. Twelve months where the premises will no longer be used as a rental. Six months where termination was due to a proposed sale, demolition, or a landlord or family member moving in. Four weeks where the property was vacated for significant renovations or repairs. Re-letting inside these windows without approval from NSW Fair Trading is an offence, so the timing needs building into your sales strategy.

What other reforms should landlords know about?

Three matter in practice. Rent increases are capped at once every 12 months for all leases starting from 31 October 2024. Pet requests changed on 19 May 2025, with refusal now permitted only in specific circumstances, and staying silent for 21 days counts as automatic approval. Landlords must also provide at least one fee-free method for paying rent, such as bank transfer, and cannot compel tenants to use an app or payment platform that charges extra. All three affect how your property reads to a prospective investor buyer.

How does this affect my sale?

In two ways. Timing first: notice periods and re-letting exclusions are fixed, so a plan to deliver vacant possession has to be built backwards from those dates. Getting it wrong invites delays or disputes that reach into settlement. Disclosure second: any active tenancy, the rental terms attached to it, and your compliance with the new legislation all form part of the conveyancing process. Investor buyers will be assessing exactly these points, since the reforms shape what they can do with the property once it is theirs. Both are worth working through before you list.

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Need Help Understanding the Impacts?

If you're considering selling a property with a tenant inplace, Paul Denny Conveyancing can guide you through what these reforms mean for your legal obligations and the conveyancing process.

Understandably Landlords maybe concerned about some of these changes and how they may impact you and your investment property. Having over 30 years’ experience in the property management space & having been exposed to well over 5 rounds of reviews of tenancy legislation in NSW, you're backed by decades of experience in navigating changes to the tenancy laws, when partnering with Hills Prestige Property Management.

Feel free to reach out should you have any questions about how these changes impact your investment property or wish to discuss a tenancy related matter. - 0456 944 776.

Melinda Howarth

Property Manager | Licensee| Director

0456 944 776 | 8896 4347

Level 5, 4 ColumbiaCircuit

Norwest NSW 2153

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