NSW’s Proposed Eviction Rules

The NSW government’s proposed ban on evicting tenants without reasonable grounds will spark landlords’ exodus and deprive the state of billions of dollars in investments in the rental sector, property investors warn.

The Minns government’s proposed eviction rule announced on Sunday makes it illegal for landlords to terminate periodic or fixed-term leases without reasonable grounds. Investors will be penalised if found in breach.

Landlords can reasonably terminate a lease if the tenants fail to pay rent, or if they damage the property.

Sixty days’ notice

Tenants can also be legally evicted if the property is being sold or offered for sale as vacant property, or if the landlord plans significant repairs or renovations. In this case, the property cannot be relisted for rent for at least four weeks.

If landlords or their relatives want to move into the property, tenants can also be lawfully evicted, but evidence must be provided with a termination notice.

Landlords will now need to give 60 days’ notice for tenants on fixed term agreements of less than six months, up from 30 days previously.

For fixed-term leases of more than six months, the termination notice period will be increased to 90 days from 60. There will be no change to notice periods for those on periodic terms.

Few rentals available

The unintended consequences mean that there’ll be a significant undersupply of rental accommodation in NSW, which puts upward pressure on rents.

These tenancy laws also put tens of billions of annual investment dollars at risk in the private rental sector being spent in their state or territory. If what happened to Victoria was any indication, NSW could lose thousands of rental homes as a result of the restrictive rule.

Since Victoria introduced similar laws, there are more than 15,000 fewer rentals available in that state.