Key provisions of the legislation, tabled in State Parliament yesterday, will also make it easier to change leases in cases of domestic violence, as well as ensuring rent disputes are heard by the Consumer Trader and Tenancy Tribunal more quickly.

The changes are part of the first significant overhaul of residential tenancy laws in 20 years and will affect as many as 800,000 households across the state. About one in three NSW households rent, up from a quarter a decade ago.

The Real Estate Institute, and other groups acting for property owners, had lobbied hard against some provisions of the draft legislation. This resulted in a watering down of plans to give tenants more protection after the property owners warned this would undermine private investment in housing.

''The key thing is to balance the rights and responsibilities of the tenants and the landlords, to provide certainty,'' the Minister for Fair Trading, Virginia Judge, said yesterday.

For the first time, landlords will have the ability to control the number of tenants in their property, as well as the power to vet tenants moving into shared households.

Vetting would occur when there is a change of tenant in a shared household. The landlord must be advised of the name of the new tenant, and they or their agent would be able to interview the tenant and view references.

Landlords will also be able to take tenants who are in arrears to the tenancy tribunal more quickly. In return, landlords will have to give 90 days' notice, up from 60 days, if they wish to evict a tenant. The tribunal's ability to protect some tenants facing eviction may also be watered down.

A major bugbear for tenants, making minor changes such as installing picture hooks, handrails and internet connections, is to be eased, but any changes must be rectified at the end of the lease.