With the recent changes put in place surrounding COVID-19, this has raised some questions from both Landlords and Tenants. Here are some Frequently asked questions:
1. Can a tenant and landlord still end a tenancy if they agree?
Yes. A tenant and landlord can agree to end a tenancy and decide when and how this is to happen.
2. What proof does a tenant need to show they are impacted?
The tenant can provide simple documents to show that they are impacted by COVID-19, e.g.
- Proof of job termination/stand-down, or loss of work hours.
- Proof of Government income support.
- Proof of prior income.
3. What do the changes mean for tenants who are impacted?
The new rules put an immediate 60 day stop on termination notices and Tribunal applications for terminations based on rental arrears where a tenant is unable to meet their rental obligations due to being impacted by COVID-19.
This will allow time for tenants to receive Government income support and for landlords to negotiate a reduction or waiver of mortgage repayments with their lender.
It will also allow time for tenants and landlords to negotiate possible reductions in rent if needed. A dispute resolution process is available through NSW Fair Trading if no agreement can be reached or where the landlord or tenant would prefer to use this option.
4. Does the tenant need to pay back the arrears or will it be waived?
The amount of rent arrears accrued by a tenant who has negotiated reduced rent will not automatically be waived. Whether rental arrears will be waived is subject to negotiation between the tenant and the landlord.
5. Will my landlord insurance cover my rental losses?
Landlords should check their insurance policy to see whether they are covered for rental default. Different policies will 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.
6. Can i still end my tenancy using the required notice periods and not negotiate with my landlord?
Yes. Tenants who do not wish to stay in their premises can terminate using the existing notice period required for their specific agreement.
Tenants seeking to end a fixed term agreement early may be required to pay break fees under their agreement. Details about ending a fixed term agreement early are outlined on the Fair Trading website.
7. What if the landlord refuses to negoiate and we can't reach an agreement?
The landlord and tenant should both attempt in good faith to negotiate a reduction in rent.
NSW Fair Trading provides a dispute resolution process that landlords and tenants can use if they can't reach an agreement themselves.
Fair Trading will request evidence from the tenant about their previous income and current income from all sources, including any Government income support. Information will also be sought about any application the tenant has made for income support.
Tenants need to have an idea of how much rent they can pay when considering negotiations. Fair Trading will then contact the landlord to seek a mutual agreement on a temporary arrangement for the payment of rent.
8. What happens once the interim 60 day stop ends?
Once the intermin 60 day stop has ended, 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.
To read more frequently asked questions, or to read more about the changes, visit: https://www.fairtrading.nsw.gov.au/resource-library/publications/coronavirus-covid-19/property/moratorium