Significant reforms to enhance tenants’ rights and provide clearer guidelines for landlords have now come into effect in NSW.

Set out in the Residential Tenancies Amendment Regulation 2025, these changes include updates around no-grounds termination and pet ownership.

It is an important step forward in making the market fairer and more stable for the 2.3 million renters living in NSW, while providing better-defined standards for landlords.

Such policy shifts also create a stronger foundation for success that will lead to a balanced and modern approach to residential leases.

Let’s look at what has changed.

What changes have been made to NSW Tenancy Laws?

1. Ending ‘no grounds’ terminations

Landlords now need to provide a valid reason when ending a lease. The aim is to provide renters with more security, allowing them to turn a house into a home. This reform also gives landlords clearer guidelines on when they can end a fixed-term or periodic lease. Under the changes, a reason must be given to end a tenancy for both periodic leases and leases at the end of their fixed term.

This includes:

• A breach of the lease by the tenant, such as non-payment or damage
• If the property is being sold or offered for sale with vacant possession
• The property will no longer be used as a rental (e.g. converted to a business)
• If a property needs significant repairs, renovations or demolition
• If a property will no longer be used as a rental home, or the owner intends to live in the property.
• The tenancy is tied to employment, and that employment has now ended

Landlords must also provide tenants with a termination notice that includes an official statement outlining both parties’ rights and obligations. In certain cases, supporting documents must be provided. You can find more information here on Fair Trading's website.

Your local LJ Hooker property manager will also be able to provide updated guidelines, including the correct documentation, for ending a rental agreement.

2. Pets welcome (with limits)

Tenants can now request to keep a pet. Landlords can only refuse on specific and reasonable grounds. This includes:

• Inappropriate fencing
• Not enough open space
• If it is highly probable that the pet will cause excessive damage.
• Landlords can also refuse if there will be more than four animals at the property, or if the number is deemed unreasonable.

There are many upsides to allowing renters to bring a pet, including widening the potential pool of tenants who are likely to reside at the property in the long term.

3. Rent increase capped

Rent can now only be increased once every 12 months for all leases. It previously only applied to periodic leases and fixed-term leases of two years or more. It is important to note that different rules still apply to fixed term leases of two years or less that were signed before 13 December 2024.

4. No more upfront application fees

Applying for a rental will no longer cause the tenant to be out of pocket. This includes charges for background checks and preparing tenancy agreements, which are now prohibited.

If you have found a property you would like to rent, the next step is to complete an application form.   Click here for tips on how to make your submissions stand out from the crowd.

5. Flexible rent payments

Tenants must be provided with zero-fee ways to pay their rent, such as a bank transfer and Commonwealth Centrepay.

Residential tenancy changes in effect from 31 October 2024:

• Ban on application fees
• Annual limit on rent increases

Residential tenancy changes in effect from 19 May 2025:

• Reasons required to end a lease
• Pet consent process
• Fee-free payment option
• Longer notice periods
• Re-letting restrictions
  
  

Other key initiatives aimed at rebalancing the rental marketplace also include:

• Portable Bond Scheme – Currently in development, this $6.6 million investment will deliver a scheme that will allow eligible renters to move homes and digitally transfer their existing bond with them.
• Rent Check – This new online tool allows tenants to check whether the rent they have been asked to pay is fair. This is not an official rent valuation or rent recommendation by the State Government. Instead, it aims to improve the rental market by comparing the median rent range in any NSW postcode. Click here to access this system.

What are the mandatory waiting periods for re-letting a property?

The length of the restriction depends on the reason why a property lease was terminated. If the premises are no longer to be used as a rental, then there is a 12-month wait until the property can be leased again. If it is vacated due to significant renovation or repairs, then a 4-week reletting restriction applies.

Landlords or agents may face penalties if they enter into a new lease agreement during the restriction period without approval from NSW Fair Trading.

What happens if there is a breach?

Failure to follow the Residential Tenancies Bill is taken very seriously, with hefty fines for both landlords and agents.

A new dedicated Rental Taskforce has been set up by NSW Fair Trading and funded by an $8.4m investment. It will analyse activities and conduct compliance activities such as inspections and audits to ensure changes are followed. In addition to ending solicited rent bidding, it will also ensure improved responses to repairs and maintenance in the rental market.

A sole trader issued 100 Penalty Points will be fined $11,000; while a corporation given 650 Penalty Points will pay $71,500.

“The Rental Taskforce is a dedicated and skilled team made up of new and existing roles focused on preventing and responding to breaches of rental laws,” said Rental Commissioner Trina Jones.

“This will support a fair and safe marketplace for rented homes in NSW and contribute to improved confidence in the rental market.”

Benefits of LJ Hooker Property Management

Many investors are financially savvy; however, finding tenants and dealing with day-to-day property issues can be tricky.

A property manager is experienced in not only marketing to and finding the perfect tenants but also handling any issues during the tenancy agreement.

LJ Hooker agents and property managers regularly attend training, externally and in-house, placing a large focus on continual professional development. In a continually changing world, it is important to keep up with the real estate industry and the relevant legislation, too.  If you are ready to find and engage a property manager and maximise the potential of your investment, get a free rental appraisal today.

DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice, which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.