Under the Residential Tenancies Amendment Act 2024 and Residential Tenancies Amendment Regulation 2025 (NSW), landlords and their agents now face penalty notices and court-imposed fines for a range of termination notice offences — some reaching $71,500 per breach. These aren’t hypothetical enforcement threats. They’re legislated, updated as of April 2025, and enforceable right now.
If you own a rental property in NSW, this matters regardless of whether you manage it yourself or use a property manager. Responsibility doesn’t automatically transfer to your agent — and the penalties don’t discriminate between experienced investors and first-time landlords.
Key Takeaways:
- Fines for termination notice breaches now reach up to $71,500 through court proceedings — and $35,750 via penalty notice alone, depending on the offence.
- Landlords can be penalised personally, even when acting through a property manager, if the termination notice was false, misleading, or issued on non-genuine grounds.
- Compliance is no longer optional or aspirational — it requires knowing the specific rules around termination, exclusion periods, and re-letting obligations.
Table Of Contents:
1. What the New Penalties Actually Cover
The penalty framework introduced under the 2024 and 2025 amendments applies specifically to termination notices — one of the most common and most mismanaged parts of the landlord-tenant relationship.
Penalties operate at two levels. The first is a penalty notice — issued administratively, without going to court. The second is a maximum court-imposed penalty, which applies when a matter is prosecuted before the tribunal or courts. Both levels are now significantly higher than many landlords realise.
For individuals (as opposed to corporations or agents acting as entities), penalty notice amounts reach up to $5,500 per offence, and court-imposed maximums sit at $11,000 per offence for some breaches. For agents acting “otherwise” — that is, as a business entity — those figures scale dramatically: up to $35,750 via penalty notice and $71,500 through court proceedings.
The distinction between individual and “otherwise” penalties matters. If your property manager operates as a company and issues a non-compliant notice on your behalf, the exposure doesn’t necessarily stay with them.
2. The Four Termination Offences You Need to Know
The updated penalty schedule targets four specific breaches under the Residential Tenancies Amendment Act 2024. Each is worth understanding in plain terms.
Section 85(2) — False or misleading documents to support a termination notice Providing false documents or information in support of a termination notice is an offence. Penalty notice: $2,200 (individual) or $14,300 (otherwise). Court maximum: $11,000 or $71,500.
Section 86(1) — Termination notice issued on non-genuine grounds If a landlord or agent issues a termination notice where the stated ground simply wasn’t genuine, that’s a separate offence. Penalty notice: $5,500 (individual) or $35,750 (otherwise). Court maximum: $11,000 or $71,500.
Section 87(1) — Entering a new tenancy during an applicable exclusion period Where a tenancy exclusion period applies, entering a new residential tenancy agreement during that period is prohibited. Same penalty scale as Section 86(1).
Section 87(2) — Failure to notify the agent of re-letting intention If a landlord knows — or should reasonably know — that the property might be re-let, they must notify their agent during the exclusion period. Failure to do so carries a penalty notice of $2,200 (individual) or $14,300 (otherwise), with court maximums of $11,000 or $71,500.
This last one catches landlords off-guard. It’s not about what you did — it’s about what you knew and didn’t disclose.
3. The Real Risk: When Your Agent’s Mistake Becomes Your Fine
Here’s what most landlords don’t fully appreciate: appointing a property manager doesn’t fully insulate you from legislative liability.
The penalties in the updated framework can apply to a landlord or their agent. That means if your agent issues a termination notice with inaccurate supporting information, or on grounds that weren’t genuine, you may both be exposed. Whether liability attaches to you specifically depends on the circumstances — but the legislation doesn’t offer a blanket “my agent did it” defence.
This is precisely why the quality and compliance capability of your property manager matters more than it used to. A manager who cuts corners on termination notices, who doesn’t understand the exclusion period rules, or who doesn’t brief you on your disclosure obligations under Section 87(2) isn’t just creating administrative headaches. They’re creating financial exposure for you.
The industry has long sold property management as a time-saving convenience. What these penalties make clear is that it’s also a risk management function — and one that needs to be taken seriously.
4. What Good Property Management Looks Like Under These Laws
Compliance under the updated NSW framework requires more than good intentions. It requires property managers who:
- Understand the specific grounds for lawful termination and can verify that those grounds are genuine before issuing any notice
- Know the exclusion period rules and apply them correctly for each tenancy type
- Document everything — supporting information for termination notices needs to be accurate and auditable, not assembled hastily
- Proactively brief landlords on disclosure obligations, particularly the Section 87(2) re-letting notification requirement
- Keep current with legislative updates — the April 2025 regulation update is not the last change you’ll see in this space
The comparison below summarises the difference in approach between reactive and proactive property management in this context.
Compliance Approach: Reactive vs. Proactive Property Management
| Area | Reactive Management | Proactive Management |
| Termination notice review | Issued based on landlord instruction | Grounds verified before issue |
| Exclusion period tracking | Tracked manually, if at all | Flagged systematically per tenancy |
| Landlord briefing | After problems arise | Pre-emptively, at key decision points |
| Documentation | Assembled when needed | Maintained and auditable throughout |
| Legislative updates | Acknowledged when necessary | Monitored and applied proactively |
| Risk ownership | Assumed to rest with the landlord | Shared and managed transparently |
5. The Bottom Line for NSW Landlords
NSW rental law has become more complex, and the cost of getting it wrong has increased substantially. The Residential Tenancies Amendment Act 2024 and the April 2025 regulation update aren’t signals of where things are heading — they’re the current reality.
If you’re self-managing, now is the time to understand these four offences in detail and ensure your documentation and processes are watertight. If you’re using a property manager, now is the time to ask direct questions: Do they understand the exclusion period rules? How do they verify the grounds for termination? What’s their process when legislation changes?
These aren’t aggressive questions. They’re the right ones.
At Preferental, we manage properties with the legislative environment in mind — not as a box-ticking exercise, but because good management and compliance aren’t separate things. If you want to understand how we handle termination notices and exclusion periods under the current framework, we’re straightforward to talk to.
Sources: REINSW Penalty Schedule, updated 17 April 2025. Residential Tenancies Amendment Act 2024 (NSW). Residential Tenancies Amendment Regulation 2025 (NSW).