NSW Fair Trading put together its statutory review of the Residential Tenancies Act 2010 in June 2016. Currently the act defines long-term tenancies as periods of 20 years or more.
In a bid to encourage longer fixed term tenancies, recommendation 16 of the review, has suggested amending section 20 to reduce this to five years.
REINSW envisages that the proposed five-year prescribed agreement would have no impact on the current standard form residential tenancy agreement and would be a stand-alone agreement.
However it says a bigger incentive for landlords to enter into a five year lease would be to remove the registration obligation and the requirement to pay registration fees.
As a result REINSW recommends that section 53 of the Real Property Act 1900 (NSW) (RPA Act) is amended to require registration of a lease if it has a term of more than five years, as opposed to three years.
REINSW CEO Tim McKibbin said: “If landlords are not required to pay registration fees for registering a five-year lease, then they will be encouraged to use these longer-term leases.”
If the recommendation above is not implemented, REINSW proposes that residential leases with a term exceeding five years should be exempt from the registration requirement that currently exists in section 53 of the RPA Act.
Tim McKibbin added: “Another motivation for landlords to use five-year leases would be to enable them to stipulate terms and conditions that are prohibited or not included in the current standard form residential tenancy agreement.”
REINSW recommends a prescribed, but not mandatory, five-year lease which includes terms incentivising landlords to use that lease as opposed to the standard form residential tenancy agreement.
These terms should include, but would not be limited to:
For more information, please read the submission here.
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