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TRAVEL & LEISURE

Here's What the NSW Government's Moratorium on Rental Evictions Means for You

To help those financially impacted by COVID-19, the government has temporarily banned some evictions. But there's a bit of fine print — here's what you need to know.
By Samantha Teague
April 16, 2020
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Here's What the NSW Government's Moratorium on Rental Evictions Means for You

To help those financially impacted by COVID-19, the government has temporarily banned some evictions. But there's a bit of fine print — here's what you need to know.
By Samantha Teague
April 16, 2020
  shares

In late March, Prime Minister Scott Morrison announced the national cabinet had agreed to a six-month moratorium on evictions for both residential and commercial tenancies financially impacted by COVID-19. Like many coronavirus regulations, though, the moratorium then had to be implemented by individual states and territories. And on Wednesday, April 15, the NSW Government did just that.

As part of a $440 million rental rescue package, the government has amended its Residential Tenancies Act 2010 and introduced a 60-day ban, as well as a further six months of restrictions, on evicting people financially impacted by COVID-19. Some of that money — $2.5 million of it, in fact — is also going to bolster Fair Trading and the NSW Civil and Administrative Tribunal (NCAT), two services that can offer advice to tenants and landlords and help them reach rental agreements during the crisis.

The government hopes this pause on evictions will allow time for financial support (such as Centrelink and the new Jobkeeper payments) to reach tenants and "limit social movement in order to minimise public health risks", as stated on the Fair Trading website, during COVID-19.

As always, there's some fine print. Not everyone is protected from evictions and even those impacted financially can be evicted under some circumstances, so we've broken it down.

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First up, what is a moratorium?

Simply, it's a temporary ban or suspension of an activity.

And an evictions moratorium?

A temporary ban on evictions. In NSW, the evictions moratorium is for 60 days, from Wednesday, April 15, and applies only to renters who have been financially disadvantaged by COVID-19. More on that below.

During this period, landlords are not able to issue any termination notices and all termination orders via NCAT are on hold. For all evictions, now and in the past, landlords must issue a notice and, in more serious circumstances, an order, which must first be approved by NCAT. Then, only with a warrant of possession, can a sheriff's officer physically remove you from the premises.

What happens when these 60 days are up?

You can be evicted for not paying rent, but only if you and your landlord have "participated, in good faith, in a formal rent negotiation process about the rent or charges payable" and a termination is "fair and reasonable in the circumstances of the case". Yes, it's a little vague. And, yes, the government is asking you to effectively 'sit down' with your landlord and ask for a rent reduction, which may be daunting for someone who doesn't have a particularly great relationship with their landlord. Fair Trading will be on hand to assist with these negotiations, though, and NCAT still has the final say on approving an eviction order and whether or not the circumstance is "fair and reasonable".

So, does that mean I don't have to pay rent?

If you have been finally impacted by COVID–19, you do not have to pay rent during the 60 days. During this time, you cannot be evicted due to rental arrears (missed rent payments), but you are encouraged to start negotiations with your landlord for a longer-term rent reduction if needed.

What's important to note is that you're only protected from evictions if one or more rent-paying members of your household has:

  • lost employment or income as a result of the impact of the COVID-19 pandemic, or
  • had a reduction in work hours or income as a result of the impact of the COVID-19 pandemic, or
  • had to stop working, or materially 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 percent or more.

According to the NSW Government, household income is inclusive of any government assistance, such as the Jobkeeper payments.

If you do not meet the above eligibility, you're expected to honour your agreement and pay all rent and charges in full.

What about if I've lost my job? Or had my shifts cut?

Yes, as outlined above, you can pause paying rent during the 60 days if your household income has been reduced by 25 percent or more due to lost work during COVID-19.

Do I have to pay it later?

Any unpaid rent will accrue as arrears during this period. Whether or not you'll have to pay this rent after the 60 days needs to be negotiated with your landlord. This negotiation can be facilitated by Fair Trading, if needed.

And if I can't, I won't be evicted — right?

During the 60-day moratorium, no — you cannot be evicted for not paying rent if you or your household has been financially impacted by COVID-19, as clarified above. After that, though, you can be evicted, but a landlord must first partake in negotiations on rent reduction "in good faith" and NCAT has the final say on approving an eviction order.

The NSW Government has also introduced a new 90-day minimum notice for evictions, after the moratorium, too.

To clarify, this moratorium only protects you from evictions for not paying rent. If you breach the rental agreement or you reach the end of your lease, the landlord can still evict you (with at least 90 days' notice).

If you've caused damage to property or other residents' property, used the residence for illegal purposes, have been threatening or abusive to other residents or have not payed rent and are not impacted by COVID-19, you can still be evicted with just 14 days' notice.

Click on the image for an enlarged version

If I receive a phone call or email from my landlord about being evicted what should I do?

If your landlord is unaware of the moratorium, you can direct them to Fair Trading NSW website. Here, you'll also find template and example letters to use when approaching your landlord about rent reduction. The Tenants' of NSW Union also recommends getting legal advice from your local Tenants' Advice and Advocacy Service before entering into an agreement with your landlord. You can also get free financial advice from professionals by calling the National Debt Hotline on 1800 007 007.

Am I allowed to break my lease and move out early if I need?

You can, but you will need to give your landlord notice and may have to pay a break fee. If you're in a period agreement (say month-by-month), you need to give 21 days' notice. If you're in a fixed-term agreement, you might need to pay a break free if the agreement has not yet expired. But, Tenants' Union NSW says it is worth contacting your landlord and seeing if you can negotiate a shorter notice period or if they'll waive the fee.

Have more questions?

There's a heap of FAQs on the Fair Trading and Tenants' Union of NSW website, and if you're still unsure you can get free legal advice by contacting your local Tenants' Advice and Advocacy Service.

Published on April 16, 2020 by Samantha Teague

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