Covid-19 has impacted many renters across NSW with many losing their jobs or income and facing significant financial hardship. This has put pressure on property investors who rely on rental income to help pay the mortgage. In addition, investors could be significantly out of pocket and not be able to find new tenants until the existing tenants leave.
The NSW government introduced a moratorium on evictions on 15 April 2020. It came in two stages and applied to tenants who were struggling to meet their rent payments as a result of COVID-19 having reduced their weekly household income by 25% or more.
Stage one ended 13 June 2020. It prevented tenants who were financially impacted by COVID-19 from being evicted on the basis of rent arrears.
Stage two enabled tenancies to be terminated if the NSW Civil and Administrative Tribunal (NCAT) decided that it is ‘fair and reasonable’ to do so, based on the circumstances of the case. This is after the tenants and the landlord have failed in their formal negotiations for a rent reduction.
The NSW moratorium on evictions was extended and will end on 26 March 2021. It does not apply to social housing tenants.
Minister Anderson’s announcement provided relief to renters worried about how they would keep a roof over their head in the coming months said Leo Patterson Ross, CEO of Tenants’ Union of NSW.
The extension means renters affected by Covid-19 can continue to negotiation with their landlord to reduce rent especially an earlier reduction.
The Evictions Moratorium protects affected tenants from eviction. It does not mean that renters can just stop paying rent, or choose to pay less. They must contact their landlord or agent to inform them of their need to negotiate a rent reduction. This should be done in writing, says the Tenants Union of NSW, so that they have a record of what has happened. This includes any agreement reached.
NSW Fair Trading provides a dispute resolution process if the landlords and tenants can’t reach an agreement.