Updated NSW residential lettings and COVID-19 requirements and relief packages

by Col Myers - Small Myers Hughes 30th of November, 2021

Updated NSW residential lettings and COVID-19 requirements and relief packages
© bsd studio / Adobe Stock

Building managers in NSW who conduct residential letting must be aware of the updated COVID-19 residential support package that now applies to eligible COVID-19 impacted tenants and landlords.

In my May article this year, I set out the requirement for termination of residential tenancies during the transitional period from March 2021 to November 2021.

What happened after November 11, 2021?

Following the end of the freeze on evictions, a further transitional period will run from November 12, 2021, until the end of February 12, 2022.

During this time, COVID-19 impacted tenants who accrued arrears during the moratorium period ( July 14, 2021 and November 11, 2021) are exempt from provisions that would allow them to be evicted for those arrears unless: if the landlord and tenant have agreed to an arrears repayment plan, and the tenant fails to make repayments in the amounts and at the times required by the plan on two or more consecutive occasions, and it is otherwise fair and reasonable in the circumstances for the tenant not to be exempt.

Or

If the landlord and tenant have not agreed to a repayment plan and, the landlord and tenant have participated in good faith in a formal arrears’ repayment negotiation process with NSW Fair Trading, and, it is otherwise fair and reasonable in the circumstances for the tenant not to be exempt.

In considering whether it is fair and reasonable in the circumstances for the tenant not to be evicted, the tribunal must have regard to: the steps taken by the landlord and tenant to negotiate a repayment plan, any payments made by the impacted tenant towards the arrears, the nature of any financial hardship experienced by the landlord or tenant - including the general financial position of each party, the availability and affordability of reasonable alternative accommodation for the tenant, whether the landlord has applied for or received any financial assistance or land tax rebates available to landlords who reduce rent, and any special vulnerability of the tenant.

Exclusions

The freeze on evictions does not apply to social housing tenancies as these have their own processes for dealing with arrears.

Financial support for rent reduction

The Residential Tenancy Support Payment assists COVID-19 impacted tenants and their landlords to maintain tenancies and reduce financial hardship.

A landlord can make a claim for either this payment or the COVID-19 land tax benefit (which is an offset of the land tax liability equal to the rent reduction granted), but not both.

The Residential Tenancy Support Payment has been increased from $1,500 and now provides up to $4,500 per tenancy agreement. Landlords who have already claimed up to $1,500 or $3,000 can make a further claim for reduced rent up to a total of $4,500.

Landlords can make separate claims for each premises they own.

Landlords cannot ask tenants to repay the reduced amount of rent that has been paid to them under the Residential Tenancy Support Payment or land tax benefit.

Tenants can make application for assistance

From November 11, 2021, COVID-19 impacted tenants whose weekly household income reduced by 25 percent or more since July 14, 2021, can apply for up to $4,500. This is only available if the landlord or agent has not already applied for the maximum amount available.

The Government believes that opening applications up to tenants as well as their landlords will help clear rental arrears and will also help to avoid disputes and recovery action for rent during the moratorium transitional period.

Tenants wanting to make an application from November 11, 2021, will need to: arrange for all tenants listed on the tenancy agreement to sign the application for the residential tenancy support payment, and obtain the consent of their landlord and/or agent to provide their personal and rent account details.

Claims can only be paid into a managing agent’s trust account or a landlord’s rent account (not the tenant’s personal account).

The amount for each tenancy is capped at $4,500.

Eligibility for support payment

An applicant is eligible for this payment where: there is a residential tenancy agreement with a tenant/landlord (as proof, you will need a rental bond number and/or a written tenancy agreement), the tenant is an eligible COVID-19 impacted tenant, and the applicant agrees to be bound by the terms and conditions for the payment.

Additionally: the property that is the subject of the application must be the tenant’s principal place of residence, residential premises that are being used for commercial purposes, such as short-term rental accommodation or as a serviced apartment, are not eligible for the payment, residential premises that are being used as a boarding house or other shared accommodation arrangement are also not eligible for the payment.

What happens with arrears owing from the previous moratorium period?

As mentioned in my May 2021 article, in March 2021, the government put in place the following measures to assist COVID-19 impacted tenants who accrued rent arrears between April 15, 2020, and March 26, 2021 (the previous moratorium period).

Landlords are only able to evict for these arrears if they have first attempted in good faith to negotiate a repayment plan. It also must be fair and reasonable to evict.

The tenant cannot be evicted unless they have failed to meet the agreed payment on two consecutive occasions.

Tenants and landlords will continue to be able to apply to the NSW Civil and Administrative Tribunal (NCAT) to terminate tenancy agreements on the basis of hardship.

Existing agreements about the waiver or deferral of rent payment are not affected.

Landlords cannot evict using the ‘no grounds’ eviction process unless it is fair and reasonable to do so.

Tenants are permanently protected from being listed on tenancy databases.

These measures ended on September 26, 2021.

Under the freeze on evictions, if a tenant is currently COVID-19 impacted, the landlord is unable to take action to terminate the tenancy for arrears accrued during the previous moratorium period until after November 11, 2021.

What should landlords and agents do?

Negotiate with your tenants. Landlords and agents are encouraged to negotiate in good faith.

To confirm a tenant is an eligible COVID - 19 impacted tenant you can request reasonable evidence such as: payslips or bank statements showing reduced income, documentation from an employer showing job termination/stand-down or reduced hours, evidence of a business closure or business records showing loss of takings, Centrelink confirmation of eligibility for financial assistance, medical certificates.

You can consider a range of variations to the agreement including: waiving rent for a period of time, reducing rent now and repaying this later in addition to usual rent payments, repayment of existing arrears over a period of time or a combination of these.

Note: Only rent waived from July 14, 2021, is eligible to be claimed as a payment.

COVID-19 impacted tenants must pay 25 percent of the usual rent to remain eligible for the eviction protections unless you and the tenant agree to a lesser rent payment.

Note that if you apply for the payment for reduced rent, you will need to provide written consent from each tenant to provide their personal information to the NSW Department of Customer Service.

Complete the “Consent to Provide my Details” form and make sure it is signed by each tenant.

Apply for financial assistance

An online application for financial assistance is now available.

Only the landlord or their managing agent can claim the payment, which is paid direct to the landlord’s account or agent’s trust account as nominated by the applicant.

You will be asked to provide proof of the residential tenancy arrangement, including the rental bond number or, if no bond has been lodged, a copy of the residential tenancy agreement.

If you don’t have either, you can still apply. The department will contact you to discuss your application and ask you to provide other proof that a tenancy agreement exists.

Payments made to managing agents are treated as any other rent payment and will be subject to the usual fees applied under the managing agency agreement.

In most instances, the department advises that payments will be received in a short period of time where the details of the tenancy agreement can be verified against rental bond data.

Small Myers Hughes

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