$440 million rent relief package for commercial and residential tenants and landlords

 

The NSW government has unveiled a $440 million rent relief package for commercial and residential tenants and landlords significantly affected by the coronavirus. The package will force landlords and tenants to negotiate in a bid to stop rent strikes or evictions.

It follows the federal government’s announcement last week that commercial tenancies will be bound by a national mandatory code, which aims to keep tenants in properties for the duration of the lockdown measures.

The NSW government’s six-month support package will include a moratorium on applications for forced residential evictions due to rental arrears for households financially disadvantaged by the pandemic, a 60-day ban on notices from landlords to tenants, and mandatory negotiation and mediation.

What does the package mean for residential tenants?

Residential tenants who have lost 25 percent of their household income due to coronavirus will be eligible to negotiate rent relief options with their landlord.

As well as a six-month eviction ban on rent arrears, there will also be a 60-day stop on termination notices by landlords to tenants.

Eligible tenants will be protected from eviction until the Tribunal is satisfied negotiations have concluded, with any unpaid rent to accrue as arrears during that time.

However, tenants will have to repay the rent eventually, as anything unpaid will accrue as arrears during this period.

Rent repayments for tenants whose circumstances have not changed do not change.

What does the package mean for residential landlords?

Under the government’s package, residential landlords would be eligible for a land tax waiver or rebate of up to 25 percent if they pass the savings on to tenants experiencing financial strain.

Landlords will be unable to serve termination notices on their tenants for 60-days.

Landlords are also unable to evict tenants for a six-month period and must engage in negotiation with their tenants.

For those who are liable for land tax, if they provide a reduction to their tenants, then we will provide a waiver or rebate of land tax in those circumstances.

Land tax obligations will also be deferred for the next three months in circumstances where a business is affected by COVID-19 and that will provide an opportunity for landlords to work through these issues with the tenants over this period.

What does it mean for commercial tenancies?

Commercial tenancies will need to negotiate rent relief agreements in accordance with the code announced by the prime minister last week.

The NSW government however will move to enact temporary legislation to give effect to the code.

Like residential landlords, commercial landlords will also be offered a concession of up 25 percent of their 2020 tax liability if they pass the savings on through rent reduction.

Eligibility

To meet the requirements for 60 days, stop on evictions and the longer six-month restrictions, a household needs to demonstrate they are impacted by COVID-19.

A household is COVID-19 impacted if:

  • one or more rent-paying members of a household have lost employment or income (or had a reduction in employment or income) due to COVID-19 business closures or stand-downs, or
  • one or more rent-paying members of a household have had to stop working or reduce work hours due to illness with COVID-19 or due to COVID-19 carer responsibilities for household or family members, and
  • the above factors result in a household income (inclusive of any government assistance) that is reduced by 25% or more.

For more information, please review the following tenancy information portals: