Regulations that affect Residential Leases
Residential Tenancies Amendments (COVID-19) Regulation 2020
As the COVID-19 pandemic continues to impact Australians, the NSW Government has recently passed an additional regulation in relation to residential Leases which can give tenants peace of mind for those who have been directly impacted by COVID-19.
Passed on 15 April 2020, the main goal of this Residential Tenancies Amendment (COVID-19) Regulation 2020 is to generally prohibit in the 6 months after the commencement of this regulation a landlord from doing the following:
- Giving a tenant who has been financially impacted by the COVID-19 pandemic a termination notice for non-payment of rent or charges;
- Applying to the NSW Civil and Administrative Tribunal (NCAT) for a termination order relating to a termination notice given to an impacted tenant for non-payment;
- Applying to NCAT for a termination order solely on the grounds that an impacted tenant has failed to pay rent or charges, and,
- Listing an impacted tenant on a residential database for the non-payment of rent and charges.
To meet the requirements of the above, tenants must demonstrate that they have been directly affected by COVID-19.
A tenant is affected if:
- One or more rent paying members have lost employment or income as a result of the COVID-19 pandemic;
- One or more rent paying members have had a reduction in work hours or income as a result of the COVID-19 pandemic;
- Once or more rent paying members have had to stop working or reduce their hours because they are ill with COVID-19 or have to care for a family member with COVID-19.
The above factors must result in the tenant’s weekly income being reduced by at least 25% compared to the normal weekly income.
It is however encouraged that the landlord and the tenant negotiate a rent reduction in good faith in the first instance, where Fair Trading will be able to assist landlords and tenants who try and reach an agreement if needed.
How do the Regulations affect Landlords?
The landlord does have the authority to give a termination notice if the notice or application is made at least 60 days after the commencement of this Regulation and the landlord has participated in good faith with trying to negotiate with the tenant some sort of rent reduction.
It is important to note that tenants not affected by COVID-19 are still expected to honour their existing Residential Tenancy Agreement including payment of rent and charges.
If you have any questions relating to any of the above, please do not hesitate to get in touch with a lawyer in Coleman Greig’s Commercial Property team, who would be more than happy to assist you today.