Lobbying for equitable outcomes

July/August 2017 edition

CEO of the Real Estate Institute of New South Wales

Over the last two years, REINSW has been working closely with the NSW Government as part of the five-year statutory review of the Residential Tenancies Act 2010.

The statutory review of the Residential Tenancies Act 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 more.
Since the release of the recommendations, REINSW has met regularly with government officials to discuss the proposed amendments with a view to ensuring any Draft Bill reflects a fair balance between the interests of landlords, tenants, the profession and the market.
Domestic violence protections

A major area earmarked by the government for amendment relates to the protections for victims of domestic violence. The review recommended amendments to make it easier for victims to either leave a violent home or end the tenancy of a violent co-tenant without financial penalty, and to avoid being penalised for damage to the property caused by domestic violence.

REINSW appreciates the devastating effects that domestic violence has and we support measures to protect victims. However we also need to be mindful of the rights of landlords as property owners and investors.

If the government’s proposed amendments move forward, the landlord will be expected to pay the costs associated with the protection afforded to a victim of domestic violence. If a property is damaged as a result of domestic violence, it is fair to say the damage incurred resulted from the tenant’s occupation of that property and the activities that occurred there during that occupation. It is, in REINSW’s view, therefore not appropriate to expect landlords to bear the cost of repairing that damage. They should not be negatively impacted as a result of circumstances out of their control.

REINSW supports the well-established principle of ‘make good’, where it is the obligation of the tenant to make good the premises at the end of the lease and that the premises should be in the same condition as it were at the commencement of the lease – even in the case of domestic violence, which is beyond the control of the landlord.

Equitable outcomes for all

The proposed amendment has the potential to discourage residential property investors.

Investors are not limited in their investment choices to residential property. There are a myriad of other investment opportunities available. In the property market alone, in addition to residential property, there are also commercial, retail and industrial investment opportunities. That is to say nothing of other asset classes such as shares, bonds, cash, commodities and more.

It begs the question: Is it in the best interest of the market, which is in desperate need of additional stock, to discourage investment in residential property by imposing costs upon them for circumstances beyond their control?

Any amendment to the Residential Tenancies Act must result in equitable outcomes for all parties in order to create a better residential tenancy environment in NSW. We’ll continue to work closely with the government in the lead up to the release of the final Draft Bill to ensure it fairly addresses the interests of all parties.


Timeline to residential tenancies reform

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
June 2017
NSW Fair Trading provides second Draft Bill to REINSW “in confidence”. REINSW lodges submission in response