Residential tenancy moratorium - transitional measures

Information for tenants, landlords and agents.

The temporary tenancy moratorium introduced to restrict when landlords could evict tenants due to rental arrears as a result of COVID-19 ended on 26 March 2021.

From 27 March 2021, a six-month transitional period has begun.

What are the rules during the transitional period?

A six-month transitional period means COVID-19 impacted tenants who accrued rent arrears between 15 April 2020 and 26 March 2021 (the moratorium period) will not be subject to the standard tenancy eviction rules for those arrears.

  • Tenants and landlords will be assisted by Fair Trading to negotiate repayment plans for arrears accrued during the moratorium period.
  • Landlords will only be able to evict these tenants for these arrears if they have first attempted in good faith to negotiate a repayment plan. It also has to be fair and reasonable to evict.
  • If a landlord and tenant have agreed to a repayment plan, the tenant cannot be evicted unless they have failed to meet agreed repayments on two consecutive occasions.
  • Tenants and landlords will continue to be able to apply to NCAT to terminate tenancy agreements on the basis of hardship.
  • Termination proceedings already started during the moratorium period will continue under the rules in place during that time.

Existing agreements between a tenant and landlord about the waiver or deferral of rent payment will not be affected by the end of the moratorium and the transitional measures.

The measures also prevent landlords from evicting a COVID-19 impacted tenant who accrued rental arrears during the moratorium period using the ‘no grounds’ eviction process (which applies to periodic leases), unless it is fair and reasonable to do so.

COVID-19 impacted tenants are also permanently protected from being listed on tenancy databases for arrears accrued during the moratorium period.

Landlords will be able to terminate any tenant under standard provisions for arrears accrued after the moratorium measures end on 26 March 2021.

The transitional measures will end on 26 September 2021.

To understand how the transitional measures may affect a tenancy agreement, see the Flowchart -Termination of tenancy after COVID-19 moratorium

For tenants

If you’re a tenant impacted by COVID-19 and were unable to pay some of your rent or other charges during the moratorium period , you should contact your landlord to try to agree a plan to repay that money.

Step 1: Am I eligible?

To be eligible for the restrictions on evictions, a household needs to demonstrate they were ‘COVID-19 impacted’, and that they owe rent or other charges (‘arrears’) that was due during the moratorium period, either with or without landlord agreement. This debt must still be owing.

A household was COVID-19 impacted during the moratorium period if:

  1. Rent paying members of the household lost employment, work hours or income due to COVID-19 and that reduced the household’s take home income by 25% or more (including any government assistance received).

    or

  2. Rent paying members of the household had to stop work (or had reduced work hours) due to illness with COVID-19, another household member’s illness with COVID-19 or carer responsibilities for family or household members due to COVID-19, and this reduced the household’s take home income by 25% or more (including any government assistance received).

Tenants will need to provide evidence to show they meet the eligibility requirements. These may include:

  • 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.

Step 2: Negotiate a repayment plan

Contact your landlord or agent to negotiate a repayment plan.

We have prepared a template to help.

You will need to provide evidence to show you meet the eligibility requirements of a COVID-19 impacted tenant with rent owing from the tenancy moratorium period.

Step 3: Put the Rent Arrears Repayment Plan in writing

If a tenant and landlord agree on a repayment plan, they should put that plan in writing. Tenants and landlords need to be clear what they are agreeing to in the plan. Details should include:

  • date
  • details of the tenancy agreement to which the arrangement applies
  • the total amount owing, how much repayments will be and the payment frequency (weekly, fortnightly or monthly)
  • date the repayment plan starts and ends.

If an impacted tenant and their landlord have agreed on a repayment plan, the tenant must make repayments in line with the agreed repayment plan. Should a tenant fail to make two consecutive payments at the times required by the repayment plan, a landlord may apply to end the tenancy if it is fair and reasonable to do so.

For landlords

If a COVID-impacted tenant did not pay their full rent during the moratorium period and the amount is still owing, all landlords must be prepared to negotiate  a repayment plan with the tenant.

To help, we have prepared a template letter.

Landlords and tenants should be aware of what they are agreeing to in a rent arrears repayment plan.

The repayment plan should include details such as total amount payable and the payment frequency and amount.

When can a landlord issue a termination order for a COVID impacted tenant?

If the landlord and tenant do not have an agreed repayment plan, a landlord can only issue a termination notice or apply to the Tribunal for a termination order if:

  • they have participated in good faith in the rent arrears repayment negotiation process run by Fair Trading; and
  • it is fair and reasonable in the circumstances to terminate the tenancy.

In general, a good faith negotiation means dealing honestly and fairly with one another to genuinely work towards a prompt and mutually beneficial agreement.

‘Good faith’ will depend on the circumstances of each case. All parties must act reasonably and be prepared to change their position or make concessions to achieve an agreement.

The tenant must comply with the terms of the repayment plan. A landlord may issue a termination notice or apply to the Tribunal for a termination order if the tenant has missed two consecutive repayments and it is fair and reasonable to terminate the tenancy

What will NCAT consider if a landlord applies for a termination order?

In considering an application for a termination order the NSW Civil and Administrative Tribunal may consider:

  • what steps the landlord and the tenant have taken to negotiate a repayment plan,
  • advice from NSW Fair Trading relating to the landlord and tenant's participation in the formal arrears repayment negotiation process overseen by NSW Fair Trading, including whether the landlord or tenant refused, or refused to make, a reasonable offer.
  • any payments made by the tenant towards the rent arrears
  • any financial hardship and the general financial position of the landlord or tenant,
  • the availability and affordability of reasonable alternative accommodation for the tenant, and
  • any special vulnerability of the impacted tenant.

Landlords may apply to the Tribunal at any time to take possession of a property if they are suffering undue hardship.

Situations where the transitional measures don't apply

Landlords can still use the usual termination processes to end a tenancy in certain circumstances, including:

  • for non-payment of rent or charges by a tenant who was not impacted by COVID-19, or failed or continues to fail to pay rent or charges after the moratorium period
  • where the tenant has caused serious damage to the property or injury to the landlord or their agent or neighbour
  • where the tenant is using the premises for illegal purposes
  • where the tenant has threatened, abused, intimidated or harassed the landlord, the landlord’s agent or another person
  • where the landlord is selling the premises
  • where the tenant has not complied with a rectification order issued by NSW Fair Trading.

A landlord can also apply to the Tribunal to end a tenancy due to hardship.

For agents

If approached by a tenant to negotiate a repayment plan, agents must contact the landlord as soon as possible to discuss the tenant’s financial hardship and opportunities for a rent arrears repayment plan.

The landlord’s financial hardship and opportunity for mortgage relief or land tax, and income tax relief (if applicable) must also be considered.

As an agent, you should try to understand both the tenant’s and landlord’s financial circumstances to help ensure a workable outcome.

Fair Trading encourages agents to ensure:

  • both parties are aware Fair Trading can help with dispute resolution if a rental arrears repayment agreement can’t be reached
  • correspondence is promptly responded to
  • any evidence required from tenants is reasonable and sufficient to show the person was COVID- impacted and suffered a loss of household income
  • repayment plans adequately detail the amount of rent to be repaid, and the payment amount and frequency
  • accurate documentation of interactions and discussions with landlords and tenants during COVID rental arrears repayment negotiations. This will be especially important if the matter progresses to the Tribunal.

Help in negotiating a repayment plan

If you have attempted to negotiate a rent arrears repayment plan without success, trained dispute resolution officers in Fair Trading are available to help landlords, managing agents and tenants.

You will need to complete a formal arrears repayment negotiation application form and submit this along with your request for assistance via the Tenancy Complaint Form.

 
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