COVID-19 New Tenancy Laws Explained

NSW commercial and residential tenants significantly impacted by COVID-19 will have greater protection from eviction as the NSW state government puts $440 million towards rent relief in the form land tax waivers or rebates.

The newly legislated six-month support package will stop forced residential evictions due to rental arrears for households who have lost their income due to COVID-19.

To help answer some of your questions around what it means for you as a renter, we have collated the following FAQ’s from information provided by NSW Fair Trading.

Please note these proposed changes have not been legislated and are subject to change.  We will update this article when the final legislated changes are announced by the NSW Government.

What are the details of the moratorium on residential tenancy evictions?

The NSW State Government has legislated the following changes to evictions during COVID-19 for a period of 6 months commencing 15 April 2020.

• A 60 day stop on landlords issuing termination notices or applying for NSW Civil and Administrative Tribunal eviction orders due to rental arrears where tenants are financially disadvantaged by COVID-19
• The landlord is firstly required to negotiate a rent reduction with the tenant in good faith and can only seek to give a termination notice or apply for an eviction after the interim 60-day stop
• Fair Tradingcan assist landlords and tenants to reach an agreement if needed
• The NSW State Government will be extending the notice period for certain lease termination reasons to 90 days.
• At any time during the 60 day stop and the longer six-month restrictions, Landlords can still apply to the Civil and Administrative Tribunalfor a termination order.  The Tribunal will assess the application and determine whether negotiations took place, whether the impacted tenant continued to pay rent payments, the nature of the financial hardship of the landlord and the impacted tenant, availability and affordability of alternative accommodation options for the impacted tenant/s, vulnerability of the impacted tenant and public health objectives.

Who is eligible to receive these concessions?

In order to be eligible for the 60 day stop on evictions and the longer six-month restrictions, one or more rent paying household member needs to demonstrate they have been impacted by one of the following:

• Have lost employment or income (or had a reduction in employment or income) due to COVID-19 business closures or stand downs or
• Had to stop working or reduce work hours due to illness with COVID-19 or due to COVID-19 carer responsibilities for household or family members and
• The above factors result in a household income (inclusive of government assistance) that is reduced by at least 25%.

What do these changes mean to renters impacted by COVID-19?

The new rules put an immediate 60 day stop on termination notices and Tribunal application or terminations based on rental arrears where a tenant is unable to meet their rental obligations due to being impacted by COVID-19.

“This will allow time for Government financial support to reach those who need it and limit social movement in order to minimise public health risks during the COVID-19 pandemic.”

It will also provide time for landlords and tenants to negotiate possible reduction in rent if needed.   NSW Fair Trading is able to help with dispute resolution if an agreement cannot be reached or when the landlord or tenant would prefer to use this option.

Can a tenant and landlord still end a tenancy if they agree?

Yes, a tenant and a landlord can agree to end a tenancy and decide when and how this is to happen.

Tenants who do not wish to stay in their premises can terminate using the existing period required for their specific agreement.

Tenants seeking to end a fixed term agreement early may be required to pay break fees under their agreement.  More details here.

What do I need to show my landlord to prove I have been impacted by COVID-19?

The tenant can provide the following documents to show they are impacted by COVID-19:

• Proof of job termination / stand down, or loss or work hours
• Proof of Government income support
• Proof of prior income

Do tenants need to pay the rental arrears back?

The rent arrears accrued by the tenant who has negotiated reduced rent will not automatically be waived.  Whether they are waived or not is subject to negotiation between the tenant and the landlord (with assistance from Fair Trading’s dispute resolution process as required).

The Federal Government said we would be protected from evictions for 6 months, why is this different? 

The NSW Government laws will provide a six-month moratorium on landlords giving termination notices, or making application or forced evictions, due to rental arrears for tenants who are impacted by COVID-19, provided both parties seek to find a mutually workable solution.

The new laws allow landlords, after the 60 day stop, to seek to terminate a COVID-19 impacted tenancies for rental arrears but this can only occur if they have tried to negotiate a rent reduction with the tenant in good faith and seeking a termination is fair and reasonable in the circumstances of the specific case.

What happens if my landlord refuses to negotiate or we can’t reach an agreement? 

Both the landlord and tenant should attempt in good faith to negotiate a rent reduction.

If an agreement cannot be reached, NSW Fair Trading provide a dispute resolution process for tenants and landlords to use.

NSW Fair Trading will review tenant’s previous income and current income from all sources, including Government income support and will include any income support applications.

Tenants need to have an idea of how much rent they could afford to pay when considering negotiations.  Fair Trading will contact the landlord to seek a mutual agreement on a temporary arrangement for the payment of rent.

What happens once the interim 60 day stop ends?

Once the interim 60 day stop ends a tenant(s) who is still unable to meet their rental obligations due to COVID-19 can only have their tenancy terminated on the basis of rental arrears if the landlord has attempted to negotiate reduced rent in good faith but the tenant has failed to do so.

How do the measures affect group houses where not all rent paying tenants have been impacted by COVID-19?

The COVID-19 impact test applies to the total household income, inclusive of any government assistance, such as the new job keeper payments.

Can I still get evicted from my rental property?

Before a landlord can terminate a tenancy agreement, the landlord needs to identify the reason why they want to terminate it. Following the NSW State Governments rulings, different processes apply depending on the reason for termination.

For non-payment of rent or chargers due to the tenant being impacted by COVID-19 the following measures are now in place:

• A 60 day stop on landlords issuing termination notices or applying for NSW Civil and Administrative Tribunal eviction orders due to rental arrears where tenants are financially disadvantaged by COVID-19
• The landlord is firstly required to negotiate a rent reduction with the tenant in good faith and can only seek to give a termination notice or apply for an eviction after the interim 60-day stop
• Fair Trading can assist landlords and tenants to reach an agreement if needed
• The NSW State Government will be extending the notice period for certain lease termination reasons to 90 days.
• At any time during the 60 day stop and the longer six-month restrictions, Landlords can still apply to the Civil and Administrative Tribunal for a termination order.  The Tribunal will assess the application and determine whether negotiations took place, whether the impacted tenant continued to pay rent payments, the nature of the financial hardship of the landlord and the impacted tenant, availability and affordability of alternative accommodation options for the impacted tenant/s, vulnerability of the impacted tenant and public health objectives.

Landlords can still issue a termination notice for the following reasons:

• End of fixed term agreement
• End or periodic agreement
• Breach of agreement in ways other than non-payment of rent or charges

They can also issue a termination notice for:

• Non-payment of rent or charges not due to tenant being impacted by COVID-19
• Landlord is suffering hardship
• Tenant has caused serious damage to the property or injury to the landlord or their agent or neighbour
• Tenant is using premises for illegal purposes
• Tenant has threatened, abused, intimidated or harassed the landlord/landlord’s agent/other person
• Landlord is looking to sell the premises
• Tenant has not complied with a rectification order.

The landlord must give the resident 90 days written notice of the eviction.

If I have not been impacted by COVID-19 does anything change?

All tenants who are not impacted by COVID-19 are expected to honour their existing tenancy agreements including paying all rent and charges in full.

Will I be blacklisted if I can’t pay my rent?

NSW Treasurer Dominic Perrottet said it was important that eligible residential tenants would not be blacklisted for the accruals of rent arrears.

The information included in this article was taken from Fair Trading NSW. For more detailed information and example scenarios visit Fair Trading NSW.

For questions about the new measures, please contact Service NSW on 13 77 88

Disclaimer:

The information, documents and links contained on this Property Management page are for reference and review only. We have no belief one way or the other as to whether or not the information is accurate or correct and do no more than merely post the information, documents and content for reference and review. If you intend to rely upon the information, documents or content we recommend that you make your own enquiries as to whether or not the information, documents or content are indeed accurate.