The End of the 90 Day No Grounds Notices

How the Removal of the 90-Day No Grounds Eviction Notice Could Impact NSW Landlords and Tenants

In New South Wales, landlords currently have the ability to issue tenants a 90-day "no grounds" eviction notice to end a periodic tenancy agreement without providing a reason. However, the NSW Government is discussing removing this provision as part of reforms aimed at strengthening tenant rights. These potential changes could have a significant impact on both landlords and tenants across the state.

What is the 90-Day No Grounds Eviction Notice?

The 90-day no grounds eviction notice allows landlords to terminate a periodic tenancy (a rental agreement with no fixed end date) by providing 90 days’ written notice without needing to specify a reason. For landlords, this provision offers flexibility, whether it's for selling the property, moving back in, or undertaking renovations. For tenants, it can create uncertainty if the reason for termination isn't clear.

Why is the Government Considering Removing It?

The proposed removal aims to enhance security for renters, many of whom face housing instability. The government hopes to reduce arbitrary evictions and give tenants more confidence in long-term rental arrangements. By requiring landlords to provide a specific reason for ending a tenancy—such as selling the property or moving in themselves—the government seeks to create a more transparent and fair system.

How Will This Change Affect Landlords and Tenants?

For Landlords:

• Reduced Flexibility: Landlords may lose the ability to regain possession of their property without providing a specific reason, which can make managing investments or personal situations more difficult.
• Increased Administrative Burden: Landlords may need to meet legal criteria before terminating a tenancy, which could lead to disputes or delays.
• Potential for Extended Vacancies: Delays caused by disputes or the need to justify evictions could lead to vacancies, affecting landlords' financial planning.

For Tenants:

• Increased Security: Tenants may feel more secure knowing that their tenancy cannot be ended without cause, which may encourage long-term rentals.
• Clearer Communication: Tenants will have more clarity about the reasons for eviction, whether for property sale, landlord reoccupation, or major renovations.

Selling Properties Could Become More Complex

If the law requires landlords to justify ending tenancies, selling a property with tenants in place could become trickier. Prospective buyers might hesitate unless the tenancy can be lawfully terminated for specific reasons, such as the buyer intending to live in the property.

What Can Landlords Do to Prepare?

Landlords in NSW should stay informed about the ongoing discussions and potential legislative changes.

• Review Tenancy Agreements: Consider converting periodic agreements into fixed-term leases to offer more security to both landlords and tenants.
• Maintain Detailed Records: Keep thorough records of communications with tenants, property inspections, and renovation plans to support any required justifications for ending a tenancy.
• Consult Your Property Manager: As your property managers, we’re here to guide both landlords and tenants through legislative changes and provide up-to-date advice.

Conclusion

The potential removal of the 90-day no grounds eviction notice in NSW marks a shift toward stronger tenant protections. While this change could lead to greater security for renters, it also presents challenges for landlords, especially around flexibility and managing property changes. We're here to support both parties and ensure clear communication during this transition.

As your property managers we intend to give you the best and most current information around any changes in the legislation and how this may affect you, as always you are welcome to discuss this with us at any time.