Residential Tenancies Act Blog Disclosure Obligations Landlords Agent

Residential Tenancies Act Blog – Disclosure Obligations on Landlords and Their Agents

On and from 23 March 2020, there are strengthened disclosure requirements in place to ensure increased transparency between landlords, their agents, and prospective tenants.

All pertinent material facts should be outlined before a prospective tenant signs an agreement.

A landlord or agent must not make false or misleading statements or knowingly conceal certain material facts from a prospective tenant before they sign an agreement. The list of material facts is available in the Tenant Information Statement that a landlord or agent must give a tenant before entering into a tenancy agreement.

Before signing an agreement, a landlord or agent must also tell a tenant of any proposal to sell the property if the landlord has prepared a contract for sale, or if a mortgagee (i.e. bank or other lender) is taking court action for possession of the property.

The list of material facts and information that prospective tenants must be told before entering into an agreement has been expanded. The changes also provide a remedy for tenants when material facts and information are not disclosed. The changes recognise the potential hardship tenants face if they are not provided with important information about a tenancy.

New Material Facts:

New material facts have been added, including that a landlord or agent needs to disclose if the property:

  • has been used to manufacture or grow a prohibited drug or prohibited plant in the last two years
  • is in a strata scheme where scheduled rectification work or major repairs will be done to common property during the fixed term of the agreement
  • is part of a building to where a:
  • fire safety or building product rectification order (or a notice of intention to issue one of these orders) has been issued for external combustible cladding
  • development or complying development certificate application for rectification has been lodged for external combustible cladding

Our next topic will cover the new powers for NSW Fair Trading to resolve disputes between tenants and landlords. This includes powers to investigate and issue rectification orders to require landlords to carry out repairs and maintenance, or tenants to fix damage.

Stay tuned.

If you would like to read about all the changes for tenants and landlords alike, please visit the Department of Fair Trading’s website here.