In a bid to ease the pressures being faced by residential Landlords and Tenants in the unfolding COVID-19 crisis, the NSW Government has passed a number of measures.
For residential tenants in NSW, perhaps the most significant measure is a new amendment to the Residential Tenancies Act introducing the concept of a ‘6-month moratorium’ for residential tenancies.
For a period of 60 days, commencing 15 April 2020, Landlords will not ordinarily be entitled to:
- Issue a termination notice for non-payment of rent or charges to a tenant who has suffered financially as a result of COVID-19 by losing more than 25% of their income due as a result of businesses closures, stand – downs or carers leave; and
- Apply to the NCAT NSW Civil and Administrative Tribunal (NCAT) for a termination order as it relates to non-payment of rent or charges
These changes will apply not only to residential tenancies that are governed by the Residential Tenancies Act, but also to residential leases that are governed by under any other Act, for example boarding houses.
Under these new measures, Landlords will, however, be entitled to evict an impacted tenant for non-payment of rent or charges if:
- After the 60 day period is over, the Landlord gives or applies for a termination notice; and
- The Landlord and Tenant have participated in good faith in a formal rent negotiation; and
- It is fair and reasonable in the circumstances for the Landlord to give the termination notice or apply for the termination notice.
A Landlord will also be required to give at least 90 days’ notice of termination in relation to fixed term tenancies, periodic tenancies, tenancies as a result of a breach of a residential tenancy agreement (other than for non-payment of rent or charges) and tenancies for 20 years or more.
During this 6-month period, a Landlord is also not entitled to list an impacted Tenant on a residential tenancy database for non-payment of rent or charges.
For Tenants, it is critical to remember that these new measures do not confer a right to not pay rent. Tenants and Landlords must negotiate any rent relief in good faith and assistance is available through Fair Trading’s despite resolution process as needed. These negotiations should specifically address whether any agreed rent relief is a waiver (in whole or in part) or a deferral of the rent (which is then required to be re-paid at a later stage).
The above principles will only apply if you are an affected tenant, and only then provided that you have engaged in negotiations in good faith. Other obligations under your Residential Tenancy Agreements will otherwise remain unchanged.
If you would like assistance with the affect COVID-19 has had on your Residential Tenancy Agreement, or if you have any questions, please do not hesitate to contact our specialist property law team on (02) 9525 8688.