Changes to the Residential Tenancies Act will have significant repercussions for both tenants and landlords, according to Ray White.
Effective from this week, the Residential Tenancies Act will be altered slightly to include a ‘break lease free’ agreement.
Speaking about the change, Ray White’s director of property management Ben White said tenants that want to leave their property prior to the lease period ending would now simply have to pay a break-lease fee.
“The fee will, in many cases, be less than the compensation for re-letting: a win for tenants but a loss for landlords particularly in high vacancy markets," Mr White said.
"In a low rental vacancy market like most of inner Sydney, for instance, the premise would likely be re-leased quickly but in high vacancy markets landlords could now be without rental income for months."
Mr White said the updated legislation would hopefully reduce the number of disputes arising from grey areas, particularly in event of rent reductions, mortgagee repossessions of rented premises and the tenancy database.
"Tenancy is going to become more and more prevalent in NSW: factors like strong population growth in metropolitan and coastal NSW coupled with the perception that Generation Y will be renters rather than buyers mean it's crucial that the landlord-tenant relationship is legislated and regulated."
Tenants will also benefit from extensions to eviction notice periods - 30 days up from 14 for standard leases and for periodic leases a total of 90 days.
"Shared tenancies will also be made more fluid and bonds can be paid in instalments rather than provided upfront – this will certainly appeal to students who are particularly transient in their rental movements and do not always have full bond amounts on hand."