The NSW state government has announced a $400 million rental assistance package to provide relief for renters and landlords affected by the government-enforced Covid-19 restrictions. The package will be split in two, allocating $220 million to keep residential renters in their homes, and another $220 million towards commercial rent, for the next six months. 

Moratorium on forced evictions

The government has implemented a six-month moratorium on new forced evictions if the tenant is unable to pay their rent because they are suffering financial hardship due to the Covid-19 pandemic. This applies to tenants who have lost 25 per cent or more of their income.

There are also new requirements for landlords and tenants to enter into negotiations over rental payments in good faith that are compulsory. The landlord must enter into negotiations with a tenant who is struggling to make rental payments. Better Regulation Minister, Kevin Anderson, called for more stability between tenants and landlords. “We know many people are worried about meeting their financial commitments at the moment. That is why we need more stability for tenants and landlords while the new Commonwealth income support payments are rolled-out, and landlords talk to their bank about mortgage relief,” Mr Anderson said.

An interim 60-day moratorium will also be in place for new applications to the NSW Civil and Administrative Tribunal (NCAT) for forced evictions as a result of Covid-19-related rent arrears. Tenants will be protected from eviction until the negotiations have been finalised. However, they will need to eventually repay the rent as anything unpaid will accrue during this period.

For evictions that are not related to Covid-19 rent arrears, the usual period of required notice under the Residential Tenancies Act will be increased from the minimum of 30 days up to 90 days to minimise avoidable housing disruption and movement. These terminations may relate to fixed or periodic leases ending, or other agreement breaches.

Relief for landlords 

The state government will also be waiving land tax or providing a rebate of up to 25 per cent if landlords are accommodating tenants under financial stress. Landlords are eligible for a land tax concession of up to 25 per cent for the rest of this calendar year. A further land tax deferral for for three-months will also be offered to landlords who claim the land tax concession.

Landlords who have already filed to evict their tenants will have to wait 60 days for their applications to be processed. When the 60-day moratorium ends, landlords can recover their properties if they are in financial hardship and tenants will not get a black mark against their names. Tenants and landlords will also have access to assistance from Fair Trading and access to the NCAT to resolve matters if the parties are unable to re-negotiate and agree on new rental arrangements at the end of the 60 days. 

Commercial rent relief 

The second half of the package will be allocated to businesses such as shops, cafes, gyms, hairdressers, restaurants and offices that have been affected by Covid-19 restrictions. The commercial landlords of those businesses will be offered the land tax concession if they pass on rent reductions to their tenants, in line with the code of conduct agreed to by the National Cabinet at the beginning of April.

The code of conduct works on a “good faith” leasing principle between landlords and tenants who are eligible for the Commonwealth JobKeeper program. It applies to businesses with a turnover of less than $50 million and at least a 30 per cent reduction in revenue as a result of the Covid-19 pandemic.

Both NSW Labor and the Tenants Union cautiously welcomed the package, but expressed concerns about the accruing unpaid rent that needs to be repaid by tenants after the pandemic period and leaving a tenant who lost their job with a rent bill. NSW Parliament is yet to be recalled to pass the measures.