Termination of tenancies
19th May 2025 saw changes to the Residential Tenancies Act take effect. One of the changes that took effect was the end of “no grounds” terminations of tenancies.
So what does this mean?
Grounds for termination
From 19th May 2025, all termination notices issued to tenants must have grounds. These grounds include:
- Breach of agreement
- Non-payment of rent, water or other charges
- Serious damage, injury, threats, abuse or use of the premises for an illegal purpose
- Actual sale of the property
- Proposed sale of the property
- Significant renovations or repairs to the property
- Demolition of the property
- Change of use of the property
- Because the landlord or landlord’s family are moving into the property
- The tenant is no longer eligible for student accommodation
- The tenant no longer eligible for the affordable housing scheme
- The tenant is in a transitional housing program
- The property is needed for key workers (this ground can only be used if the tenant was advised before signing the lease)
- Landlord hardship
- Termination of employee or caretaker (if the tenant will no longer be an employee or caretaker for the property)
- The property becomes unusable (meaning partially or wholly uninhabitable – i.e. due to flood, fire, etc.)
- Death of the tenant
- Termination of occupant remaining in property
- Termination where the tenant ended the tenancy but didn’t move out
Supporting documents
Some termination notices will now require supporting documents to be included with the termination notice, meaning that those documents must be provided to the tenant. These include:
- Termination for actual sale of the property – The tenant will need to be provided with either a copy of the contract for sale OR a written statement from the solicitor or conveyancer
- Termination for proposed sale of the property – The tenant will need to be provided with either a copy of the contract for sale OR a partial copy of the Selling Agency Agreement
- Termination for significant renovations or repairs to the property – The tenant will need to be provided with a signed and dated written statement from the landlord outlining why the renovations or repairs are significant, why the property must be vacant for the work to be done properly, the proposed start date for the work AND either a copy of the quote/s for the works, the contract for the works, approvals for the works (i.e. development consent), proof the landlord will do the work or a development control order
- Termination for demolition of the property – The tenant will need to be provided with a signed and dated written statement from the landlord outlining that the property is being demolished and that demolition will start within 2 months after the tenant vacates AND the contract for demolition AND the development consent or control order
- Termination because of change of use to the property – The tenant will need to be provided with a signed and dated written statement from the landlord outlining what the property will be used for as well as that the property will not be used as a rental home for 12 months AND additional information in some cases, for example if the property will be used for short term rental accommodation, the tenant must be provided with proof that the property is registered on the NSW STRA Register.
- Termination because the landlord or landlord’s family are moving into the property – The tenant will need to be provided with a signed and dated written statement from the landlord outlining who will be living at the property, the relationship of that person to the landlord, confirmation that they will be living at the property for at least six months AND a written statement from the family member if the person moving in to the property is not the landlord, but rather a family member. To clarify, a family member includes a grandparent, parent, uncle, aunt, sibling, child, grandchild, niece, nephew or first cousin of either the landlord or the landlord’s spouse.
- Termination because the tenant no longer eligible for the affordable housing scheme – The tenant will need to be provided with information as to why they are no longer eligible for the affordable housing scheme
- Termination because the tenant is in a transitional housing program - The tenant will need to be provided with information as to why they are no longer eligible for transitional housing
Exclusion periods
Some termination grounds will also include an exclusion period, meaning a period of time after the termination date that the landlord cannot re-lease the property for. These include:
Exclusion period: 4 weeks
Grounds:
- Termination for significant renovations or repairs to the property
Exclusion period: 6 months
Grounds:
- Proposed sale of the property
- Termination for demolition of the property
- Termination because the landlord or landlord’s family are moving into the property
Exclusion period: 12 months.
Grounds
- Termination because of change of use to the property
Should a landlord wish to have the exclusion period reduced due to a change of circumstances beyond the landlord’s control, an application can be made to NSW Fair Trading by completing a re-letting application form. This is then handled by NSW Fair Trading.
Penalties for non-compliance
Before you start thinking, “oh, I’ll just say I’m going to live in the property so I can terminate the tenancy”… think again. There are substantial penalties (fines) that can be enforced by NSW Fair Trading for non-compliance, being a maximum penalty under this section of the act of $11,000 for an individual and $71,500 for a non-individual (i.e. a corporation). These penalties can be issued for:
- Providing false or misleading documents or information when giving a termination notice
- Terminating when the ground is not genuine
- Entering into a new agreement within the exclusion period
Minimum notice periods
The changes to the rental laws saw a slight change in the notice period for some grounds of termination. These include:
Notice period: 60 days if a fixed term agreement of 6 months or less; 90 days if either a fixed term agreement of more than 6 months, or a periodic agreement
Grounds:
- Proposed sale of property
- Significant renovations or repairs
- Change of use for the property
- Landlord or their family will move in
- Student accommodation
- Affordable housing scheme
- Transitional housing program
- Key worker accommodation scheme
Notice period: 60 days
Grounds:
- Social housing – tenant is no longer eligible
- Social housing – alternative premises refused
Notice period: 30 days
Grounds:
- Actual sale of property
- End of employee or caretaker agreement (or the notice period specified in the employee or caretaker agreement)
Notice period: 14 days
Grounds:
- Breach of agreement
- Non-payment of rent, water usage charges or utility charges
- Occupant remaining in the property
- Social housing – acceptable behaviour agreement breached of refused
Notice period: Immediate
Grounds:
- Death of a sole tenant
- Property is unusable
Termination information statement
It is now a requirement to include a NSW Fair Trading termination information statement with the termination notice when serving a termination notice on a tenant. If you have an Agent managing your investment property, this is something they will ensure is included with the termination notice, however if you self-manage your investment property, it is important that you include this with the termination notice. A termination information statement can be obtained at https://www.nsw.gov.au/housing-and-construction/rental-forms-surveys-and-data/resources/termination-information-statement
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