Paper: Residential tenancies legislation

The Residential Tenancies Act 1987 is the main source of law for rental housing in New South Wales.

Main features of the Act

• Sets out standard terms for residential tenancy agreements (leases) (e.g. the tenant must pay rent; the landlord must do repairs)
• Contains procedures for rent increases and terminations, including notice periods
• Provides for dispute resolution and eviction proceedings through the Consumer, Trader and Tenancy Tribunal
• Covers private rental and social housing, with some special provisions for social housing
• Does not cover residential parks (covered by the Residential Parks Act 1998) or boarders and lodgers (not covered by legislation – left to the common law)
• Draft exposure legislation for a new Residential Tenancies Act was released for consultation on 29 October 2009. 

Balancing the relationship

It is clear that landlords have more power than tenants in the tenant-landlord relationship. 

Consider the following:

• Landlords offer tenancies on a take-it-or-leave-it basis.
• Landlords check prospective tenants’ references etc; prospective tenants are never in a position to check landlords’ references.
• Landlords feel little need to compete with other landlords, and tenants cannot easily ‘shop around’, because moving is expensive and disruptive.
• Landlords can effectively enforce agreements by threatening to end them; tenants cannot threaten to end agreements except at significant cost to themselves.

It is therefore appropriate that residential tenancies legislation should be directed at strengthening tenants’ rights and protections. 

Numerous studies have shown that residential tenancies legislation and law reform do not significantly affect landlords’ investment decisions. Amending residential tenancies legislation in favour of landlords will not increase investment in rental housing. Similarly, law reform to strengthen the position of tenants will not cause net disinvestment. 

The Consumer, Trader and Tenancy Tribunal

The Consumer, Trader and Tenancy Tribunal (CTTT) provides landlords and tenants with fast, inexpensive dispute resolution.

There are nine separate divisions of the CTTT. The Tenancy, Social Housing and Residential Parks Divisions account for the large majority proceedings in the CTTT. 

In the Tenancy Division of the CTTT, most proceedings (71 per cent) are finalised within 28 days of an application being lodged, and most (79 per cent) are finalised at, or before, the first hearing.

The fee for lodging an application in the Tenancy Division is $34. Parties to proceedings are generally not legally represented and bear their own costs.

Landlords make the large majority (84 per cent) of applications to the Tenancy Division.