Lithgow Property Management Monthly Newsletter
July 2025
Greetings from Tina’s Desk
New Tenancy Reform: Understanding Exclusion Periods
As part of the recent rental reforms introduced in NSW, a new set of exclusion periods has been implemented—something all landlords and property investors need to be aware of.
These new laws are designed to ensure that tenancy terminations are handled with seriousness and accountability. If you need to end a tenancy agreement, it must be done under specific grounds permitted by NSW tenancy legislation. In many of these cases, a mandatory exclusion period will apply, restricting you from re-letting the property for a set amount of time after the tenant vacates.
What is an exclusion period?
An exclusion period means that once a tenancy ends under certain grounds, you cannot re-advertise or re-let the property for the duration of the exclusion. These timeframes are in place to prevent misuse of termination provisions and ensure fair treatment of tenants.
The most common termination grounds and their associated exclusion periods are:
- Sale of the property (actual sale): 6 months
- Termination to prepare for potential sale: 6 months
- Serious repairs or renovations: 4 weeks
- Landlord or family member moving in: 6 months
- Demolition of the property: 6 months
- Ceasing use as a rental property: 12 months
Other, less common grounds may also carry exclusion periods, but these are the scenarios we most often encounter.
If you issue a termination notice for one of the above reasons but your circumstances change (e.g., the sale falls through or renovations are delayed), you may apply to NSW Fair Trading to request an exemption from the exclusion period. However, this is not guaranteed and will be assessed on a case-by-case basis.
Why does this matter?
These reforms represent a significant shift in how tenancy terminations are managed and enforced. It’s more important than ever to seek advice before issuing a termination notice, as the consequences of getting it wrong can be long-lasting.
If you’re unsure about how these changes may affect your property or situation, please don’t hesitate to get in touch. I’m happy to talk you through the new requirements and what they could mean for your investment strategy.
Water Efficiency
- Taps and showerheads: max 9L per minute
- Dual-flush toilets: minimum 3-star WELS rating
- No leaks at the start of the tenancy
- The property is separately metered for water
Why It’s Important to Keep Up with the Rental Market
It might surprise you to know that many landlords choose not to increase rent when given the opportunity—often out of appreciation for great tenants and a desire for stability. While this can reduce vacancy, advertising fees, and wear-and-tear, there are long-term considerations to be aware of.
Imagine this: You haven’t increased rent in three years, and decide to sell. The property is now returning significantly below market rent. This could:
- Lower the appeal for potential investors
- Decrease your sale price due to low yield
- Create shock for tenants if a sudden rent adjustment is required
Regular, modest rent reviews help ensure your property remains aligned with market expectations and supports your financial goals.
Other Key Reasons to Keep Rent in Line with the Market
Insurance Requirements
Some landlord insurance policies require market-aligned rent to remain valid—especially for loss of rent claims.
Bank Valuations & Refinancing
Rental income directly affects property valuations and your borrowing power. Undervalued rent can work against you during refinancing.
Rising Costs & Inflation
Stable rent may not keep pace with the increasing cost of maintenance, insurance, and rates—cutting into your return over time.
Tenant Communication Matters
A small annual increase is generally easier for tenants to accept than a large jump after multiple years.
Future Flexibility
Even if you’re holding long-term, keeping rent in line gives you more options down the track, whether you choose to sell, refinance, or redevelop.
These recent changes may feel overwhelming—but that’s what we’re here for. Whether you’re unsure how exclusion periods apply to your property or you’re debating whether to increase rent this year, we’re always happy to discuss your individual situation.
Please feel free to reach out directly for advice tailored to your investment goals.
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