30/07/2009

On 19 June 2009 the NSW Parliament passed the Residential Tenancies Amendment (Mortgagee Repossessions) Act 2009.  It introduced three new sections to the Residential Tenancies Act, offering new protection to tenants facing eviction.

What are the key changes?  

1. When mortgagees became entitled to possession of rented premises, they were required to give “reasonable notice” to vacate the property under the previous law.  Under the amendments, mortgagees must give tenants a minimum of 30 days written “Notice to Vacate” setting out the date by which the tenant is to vacate the property.
    
   
2. After the notice has been given, the tenants are entitled to 30 days rent-free period. During this period, tenants do not have to pay any rent and those who have paid rent in advance for this period are entitled to have that portion of rent fully refunded.
    
3. Previously, the power to authorise the Board to release a tenant’s rental bond was held by landlords or their agents only.  Under the amendments, the power to authorise the release of a bond to the former tenant is extended to the mortgagees.  

When do these changes take effect?

All mortgagees who obtain a possession order on or after 19 June 2009 will need to comply with the amendments.

Why the changes?

The changes were made by the NSW government in response to the growing number of mortgagee repossession actions and the corresponding impact on the residential tenants who are affected by the repossessions. 

What are the implications for mortgagees and tenants?

Mortgagees should be mindful of the new 30 day notice requirement as they are now exposed to the same penalties as the landlords if they take possession before the 30 day notice expires. 

Those tenants who have paid rent in advance for the 30 days after they receive the Notice to Vacate should seek full refund of the rent and if their request is met with a refusal, then they should take the matter to the Consumer, Trader & Tenancy Tribunal and seek appropriate orders.

For further information or advice, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.