Coronavirus Support: A Breakdown of NSW’s Rental Relief Package
The State Government recently announced a 440-million-dollar rental relief package for renters and landlords affected by the COVID-19 pandemic. This relief aims to limit rent strikes and evictions by forcing landlords and tenants to enter into negotiations and applies to both residential and commercial premises.
Half of the relief package will be allocated to residential tenants who have lost at least 25 per cent of their income. Under the new scheme, the NSW Government ordered:
- A six-month moratorium on new forced evictions where the tenant is suffering financial hardship due to coronavirus, meaning they will not be evicted.
- An obligation for landlords and managing agents to enter into negotiations with tenants who are struggling to make rental payments before they can seek to end the tenancy.
- An interim 60-day moratorium for new forced evictions applications to the NSW Civil and Administrative Tribunal related to COVID-19 underpayments.
Tenants will be not be evicted until the NSW Civil and Administrative Tribunal is satisfied that negotiations have finished. It is important to remember that residential tenants are still required to repay rent eventually, with any unpaid rent accruing in arrears during this period.
For residential landlords, those who are accommodating tenants in financial distress will be eligible for a land tax waiver or rebate of up to 25 per cent. The interim moratorium on evictions will mean landlords who have already filed to evict their tenants will have to wait 60 days for their applications to be processed. Once this 60-day period has expired, they may seek to recover their properties. Tenants will not get a black mark against their names if this happens
The remaining half of the relief package will be allocated to commercial landlords who are accommodating tenants struggling to financially due to the COVID-19 restrictions placed on businesses. Land tax concessions will be offered to commercial tenants who pass the savings on to their tenants through reducing rent under the NSW Government’s enactment of national cabinet’s code of conduct. This will apply to:
- Industrial sites
Under the new scheme, commercial landlords will not be able to terminate a lease for unpaid rent and are required to offer rent relief proportionate to the businesses’ fall in turnover. Complete waivers should make up at least 50 per cent of any relief provided, with deferrals to make up the rest. These obligations will apply where the tenant is a business with a turnover of less than $50 million and has experienced at least a 30 per cent reduction in revenue from coronavirus.
The state government has also assured additional $10 million funding to the NSW Small Business Commission which will increase staff to assist in the implementation of policy.
If you need assistance with a commercial or retail lease, talk to one of our experienced solicitors at email@example.com or call (02) 4929 7002.