Property investor Drew Evans has called out a NSW rental rule that restricts when landlords can re-let a property after evicting tenants. · Source: Drew Evans/realestate.com.au
An Aussie landlord has been left “absolutely fuming” over new rental rules, but his criticism hasn’t gone down well with everyone. As part of the ban on no-grounds evictions, the NSW government has introduced re-letting exclusion periods designed to stop landlords from gaming the system.
Drew Evans owns more than 10 investment properties but said he only found out about the re-letting rules when he recently went to sell. Under the new laws, if a tenant is evicted because a landlord wants to sell the property, the landlord cannot then re-let their property for six months.
Evans told Yahoo Finance this meant that landlords who listed a property for sale and didn’t end up getting the sale price they wanted, then risked having the property sitting vacant for months.
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“You always have to do the right thing by the tenant. This isn’t about screwing over the tenant to get more rent, it’s not about kicking them out of their home,” Evans said.
“This is about me saying, ‘Hey, listen, this is my hard-earned money that I’ve invested. I should have the right to choose what I do with my own money’.”
Landlords can face a penalty of $5,500 if they are caught entering a new lease within the re-letting exclusion period, while corporations can face fines of up to $35,750. They can also be fined for making false or misleading statements.
But landlords and agents are able to apply to NSW Fair Trading for approval to re-let within the period.
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Evans said he understood why the rules had been introduced, but it felt like landlords had their own decision-making powers taken away. · Source: Drew Evans
Evans, who has a $28 million property portfolio under his belt, posted a video about the rule on his social media, arguing it went too far.
“Six months of mortgage, rates and insurance, just sitting empty. If I want to rent, I have to write to NSW Fair Trading asking for permission and they decide. Bear in mind, this is my house,” he said.
Some agreed with the property investor’s stance, labelling the rule “cooked” and “ridiculous”. But others pointed out the laws protected tenants against landlords doing the wrong thing, arguing that investments were inherently a “risk”.
“I can see why they’ve done it because obviously in the past they’ve had landlords do the wrong thing and use that as an excuse to kick out tenants,” Evans said.
“But now you’re not allowed to put up the rent more than once every 12 months, even if the tenant moves out. In the midst of a rental crisis, why would you have two laws that prevent properties from becoming rentals?”
New rules needed to crack down on no-grounds evictions
Tenants’ Union of NSW CEO Leo Patterson Ross told Yahoo Finance re-letting exclusion bans, which can range from four weeks to 12 months, were one of the methods used to check tenants were only being evicted on “genuine, reasonable grounds”.
“The point of the no grounds reform is that you should only be evicted from your home for some genuine reason, not something that is easy to avoid,” he said.
“A lot of evidence that can be provided beforehand can be generated and then not held to, whereas the re-letting period ban means that you are more serious, you’re actually putting something on the line.”
Patterson-Ross said landlords do not have to evict tenants in order to sell a property, and this was a choice that landlords made.
Tenants’ Union of NSW CEO Leo Patterson Ross said re-letting restriction periods made sure landlords were only evicting tenants for ‘genuine’ reasons. · Source: Tenants’ Union of NSW/Newswire
“We should be encouraging people to say, ‘Look, I’m an investor, I might not sell to another investor, there’s no reason my tenant needs to be put out’,” he said.
“If you do end up selling to an owner-occupier, you can still serve a notice on that basis later because you’ve sold it or because an owner-occupier wants to occupy.”
Patterson-Ross said the union was against landlords being allowed to end a tenancy for the proposed sale of the property, as opposed to for the actual sale of the property.
“It is so speculative about what might happen in the future. It’s interesting that the owner also doesn’t like it, which should raise a question of why do we have it at all?” he said.
“It’s written in there to cater to landlords’ needs and landlords’ desires to have control of the space to put in furniture to pretty up the place to try and maximize their sale price, that’s why it exists.”
Landlords caught breaching re-letting bans
Since the new rules were introduced last year, NSW Fair Trading has issued a dozen fines totalling $50,050 against landlords caught re-letting their homes in breach of the rules.
One Campsie real estate agent was fined $35,000 after evicting a tenant on the grounds that the landlord’s relative wanted to move in. But no such family member ended up moving in, and the home was re-advertised the day after the tenant was evicted.
The majority of breaches detected by the Rental Taskforce are coming through data-matching technology, which scans major rental platforms to find properties advertised during the re-letting exclusion period.
NSW Rental Commissioner Trina Jones told Yahoo Finance the reforms were about making sure tenancies were ended fairly.
“When a tenancy is ended because a property is being sold, landlords must demonstrate a genuine intention to sell, including providing supporting documents to the tenant,” Jones said.
“A six‑month re‑letting exclusion applies in these cases. This is designed to prevent misuse of the system, including ending a tenancy just to re‑rent at a higher price.
“If circumstances genuinely change, landlords can apply to NSW Fair Trading to re‑let the property early but they must show that change is real and outside their control.”
Evans said he was now reconsidering selling his rental property altogether due to the new rules. He had originally wanted to sell the property, which is earning $1,200 in rental income per week, to free up some cash.
“I’ve hit the brakes on it, because I don’t want to have to try and sell it, and if I don’t get the price I want, which is getting my money back for it, then I don’t want to have it vacant for six months,” he said.
NSW Fair Trading will consider a range of factors when deciding whether to approve re-letting during the exclusion period. That includes whether the landlord made reasonable efforts to sell and whether it was not sold due to it receiving no acceptable offers, inability to complete the sale, or a significant change in the landlord’s circumstances.
Assessments will typically take a few working days.
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