Termination of Residential Tenancies in NSW after the COVID-19 Moratorium

TERMINATION OF RESIDENTIAL TENANCIES IN NSW AFTER THE COVID-19 MORATORIUM

 

The temporary tenancy moratorium introduced by the NSW Government to restrict when landlords could evict residential 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.

NSW Fair Trading has introduced a flowchart to assist landlords and tenants to understand how the transitional measures may affect a tenancy agreement.

Step 1 – Establish if the tenant was COVID-Impacted during the moratorium period?

During the moratorium period, between April 2020-26 March 2021,

  1. Did one or more rent-paying members of the household:
    • lose their employment, income or work hours due to COVID-19, OR
    • have to stop working or substantially reduce work hours due to illness with COVID-19, another member of the household’s illness with COVID-19 or to care for a household or family member with COVID-19? AND
    • did this result in a reduction in the weekly household income (including government assistance) of at least 25%?

If so, the tenant was an ‘impacted tenant’.

  1. Did the ‘impacted tenant’ fail to pay rent or charges under their lease during the moratorium period that:
    • were payable, and
    • were not paid (either with or without the agreement of the landlord), and
    • are still owing?

If so, these are ‘arrears’.

If the above applies, the transitional measures apply.

Step 2 – Have the parties negotiated a repayment plan between themselves?

Step 2B – Use NSW Fair Trading Dispute Resolution (formal arrears repayment negotiation process)

  1. A landlord or a tenant can apply to NSW Fair Trading for assistance.
  2. NSW Fair Trading will request evidence to help parties negotiate the repayment plan.

Step 2C – Have the parties been able to agree to a repayment plan?

  1. If yes, the repayment plan documented should include:
    • total amount payable;
    • payment frequency and amount.
  2. If no, the landlord may issue a termination notice or apply to Tribunal for a termination order to end the tenancy.

A landlord cannot issue a termination notice unless:

  1. if no repayment plan is in place, they have participated in the formal arrears repayment negotiation process in good faith; OR
  2. if a repayment plan is in place, the tenant has missed more than two consecutive repayments; AND
  3. it is fair and reasonable to do so.

In deciding whether it would be fair and reasonable, the Tribunal will consider:

    • the steps taken by the landlord and tenant to negotiate a repayment plan;
    • any payments made by the tenant towards the arrears;
    • the general financial position of, and any financial hardship experienced by, the landlord or tenant;
    • the availability and affordability of reasonable alternative accommodation for the tenant; and
    • any special vulnerability of the impacted tenant.

Decision and orders are then made by NCAT and, if appropriate, the tenancy will end.

 

Article Written by Col Myers (May 2021)
Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

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