New South Wales’ rental reforms are drawing renewed attention after a prominent property investor criticised a rule that can prevent landlords from re-leasing a property for six months after ending a tenancy to sell. The measure forms part of the state’s broader rental law changes, introduced alongside the ban on no-grounds evictions, and is designed to ensure tenants are only asked to leave for genuine reasons.
The issue gained traction after property investor Drew Evans, who says he owns a portfolio worth around $28 million, revealed he was “absolutely fuming” when he discovered the restriction while preparing to sell one of his investment properties. Evans argued the rule could leave landlords carrying mortgage repayments, insurance costs and council rates while a property sits vacant if a sale does not proceed.
Under the new laws, landlords who end a tenancy because they intend to sell the property generally cannot enter into a new lease for six months after the tenant leaves. The re-letting exclusion period was introduced to stop landlords from using a proposed sale as a reason to remove tenants and then quickly placing the property back on the rental market at a higher rent.
How the NSW rental rule works
According to the NSW Government’s tenancy guidance, landlords must demonstrate a genuine intention to sell when ending a tenancy on those grounds. Supporting documentation must be provided to tenants, and restrictions apply if the property is later returned to the rental market.
Landlords who breach the exclusion period can face significant penalties. Individuals may be fined up to $5,500, while corporations can face penalties of up to $35,750. Authorities can also issue fines for false or misleading statements made during the eviction process.
Evans said the rule has caused him to rethink plans to sell a rental property that currently generates about $1,200 per week in rental income. His concern is that if the property fails to achieve the desired sale price, he could be left with a vacant home and ongoing holding costs for months.
However, landlords are not entirely without options. NSW Fair Trading allows owners to apply for permission to re-let a property during the exclusion period if circumstances genuinely change. Officials consider factors such as whether reasonable efforts were made to sell the property, whether acceptable offers were received and whether unexpected events prevented the transaction from being completed.
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Why tenant advocates support the reforms
Tenant groups argue the restrictions are necessary to prevent misuse of eviction rules. Leo Patterson Ross, Chief Executive of the Tenants’ Union of NSW, said the reforms help ensure renters are only evicted for legitimate reasons rather than speculative plans that may never eventuate.
He also noted that landlords are not required to remove tenants before selling a property and can often market a home while the tenancy remains in place. Supporters of the reforms believe the changes create greater housing stability at a time when rental affordability and housing availability remain major concerns across Australia.
The debate comes amid broader discussions about investor rights and rental regulation in NSW. Recent housing-related disputes have highlighted the increasing complexity of property ownership and tenancy laws, including cases such as the NSW strata rental dispute that left an investor facing property chaos.
Since the reforms were introduced, NSW Fair Trading has issued multiple penalties against landlords and agents found to have breached the rules. One notable case involved a Campsie real estate agency that was fined $35,000 after a tenant was evicted because a landlord’s relative was supposedly moving into the property, only for the home to be advertised again shortly afterwards. Regulators have increasingly relied on data-matching technology that scans major rental platforms to identify potential breaches.
As governments continue searching for ways to balance tenant protections with property owners’ rights, the six-month re-leasing restriction has become one of the most debated elements of NSW’s rental reforms. While supporters view it as a safeguard against unfair evictions, critics argue it creates additional risks and costs for landlords trying to manage or sell their investments.
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