The Minns Labor Government will change the law to stop renters being slugged with charges for background checks when they're applying for a rental property.
There are 2.2 million renters in NSW, and they're increasingly being asked to pay for their own background checks just to apply for a home.
At the moment, some online rental property application apps encourage renters to pay between $25 - $30 to cover the cost of their own background checks, on top of providing detailed information to the leasing agent.
These 'optional' charges often come with the promise that they'll increase an applicant's chances of securing a home.
The Minns Labor Government will change the law to make it clear that renters cannot be charged for background checks.
Under these changes, the only payments renters can be charged when applying will be those specifically listed:
- The deposit
- The rental bond
- Rent for the property
- Any fee for registration of a lease longer than 3 years.
Landlords will continue to have the right to check or make reports to third party tenancy databases, in line with the strict rules already in place.
Tenants can only be listed on a database for two reasons, either they have left the property and owe money, or the Tribunal has made an order to terminate the agreement because the tenant has done the wrong thing.
The changes will form part of a package to update and modernise the NSW rental market, including reforms to finally end no-grounds evictions, which will be debated by Parliament later this year.
Currently, renters' lives can be upended at any time, with owners able to end a residential periodic lease for any reason or no reason.
Under our proposed reforms, expected to begin early next year, homeowners will now need a reason to end a tenancy for both periodic and fixed term leases.
The Minns Labor Government has also invested $6.6 million to develop and deliver the nation's first portable rental bonds scheme.
The scheme is currently out to public tender, with upgrade of the existing rental bonds system expected to be completed in 2025.
This new system will allow tenants to digitally transfer their existing bond to their new rental home. This will mean they will no longer need to pay a new bond before their old one is returned.
Premier Chris Minns said:
"With the rental market so competitive, many renters have felt pressured into paying for these checks.
"Owners will still be able to make sure their prospective tenant hasn't done the wrong thing at a previous rental.
"But you shouldn't have to pay for your own background checks just to apply for a place.
"This gets the balance right between renters and homeowners and is part of our plan to build a fairer rental market in NSW."
Minister for Fair Trading and Better Regulation Anoulack Chanthivong said:
"A renter shouldn't have to pay just for the privilege of securing a home.
"We need a more modern and fairer rental market in NSW because renters are being punished by a system that hasn't kept up with change."
