The NSW Government has provided guidelines to help both landlords and tenants during COVID-19.
To help answer some of your questions we have collated the following FAQ’s .
How is the NSW Government supporting landlords?
Under the NSW government’s $440 million package, residential landlords will be eligible for a land tax waiver or rebate of up to 25 per cent if they pass the saving on to tenants in financial distress as a result of COVID-19.
Eligible landlords will be able to apply for a land tax concession of up to 25 per cent of their 2020 (calendar year) land tax liability on relevant properties. A further land tax deferral for any outstanding amounts for a three-month period will also be offered to landlords who claim the land tax concession.
To be eligible for the land tax waiver or rebate, the landlord’s residential tenants must be struggling to make rental payments and have suffered a loss of income equal to or greater than 25 per cent due to COVID-19.
Please note the above proposed changes have not been legislated.
What does a moratorium on evictions mean?
The NSW State Government implemented the following changes to evictions during COVID-19:
- An immediate interim 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 at any time to take possession of a property if they are suffering undue hardship.
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.
What should I do if my tenant cannot pay rent?
Residential landlords are required to negotiate rental payments in good faith in circumstances where a household has lost at least 25% of its income because of Coronavirus.
It should be noted that tenants are also obliged under the mandatory code to enter into negotiations to formulate a rent relief agreement with their landlord or managing agent, prior to seeking a forced end to their tenancy.
What can I consider in a rent relief agreement?
A landlord and tenant may agree to include the following amendments in a temporary rent agreement:
- Whether the rent will be waived or reduced
- Rent amount payable
- Date for agreement to be reviewed
- Any repayment plan agreed
What information does my tenant need to provide to show that they are 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
I can’t afford to provide a rental reduction, what can I do?
Many lenders are offering to reduce or waive mortgage payments and landlords should seek to negotiate with their lender to try to obtain an agreement to waive or reduce these.
If this is possible, landlords should have a greater capacity to agree to a reduced rent or charges for a period of time.
The immediate 60-day stop on evictions will also allow time for the tenants to access Government income support and may allow tenants to resume paying existing rent.
Does landlord insurance cover rental loss?
Landlords should check their insurance policy to see whether they are covered for rental default. Policies have different limits and requirements.
Many insurers are adopting new procedures to deal with the impacts of COVID-19 and may require evidence that the landlord has attempted to negotiate with the tenant.
What happens if my tenant refuses to negotiate?
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.
Can I terminate a tenancy agreement during COVID-19?
A landlord can terminate a tenancy agreement as usual and for the following reasons:
- 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.
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.
What happens if I have already filed an eviction?
The new measures come into effect immediately and landlords will have to wait 60 days for their applications to be processed.
When the 60-day moratorium has come to an end, landlords will be able to recover their properties if they are in financial hardship, while tenants will not get a black mark against their names.
The information included in this article was taken from Fair Trading NSW