The federal government may be protecting landlords and tenants in shopping malls and office blocks, but apart from a proposed six-month moratorium on evictions, families living in rented homes have to muddle through their own negotiations with their landlords.
States have been left with the tough task of mediating between the two. New South Wales will tonight pass laws giving landlords relief from state taxes – providing they pass it on to tenants. So at least some money will come off the weekly rental impost.
But with tens of thousands of workers stood down, they’ve been left to wrestle with Centrelink and face landlords who are also cash-strapped. Many landlords are pensioners living off rents.
The property industry is calling it a “mess”. And it is.
There are eight million tenants in three million rental properties. Everyone is awaiting further details of how the six-month moratorium on evictions will be implemented in NSW.
The Tenant’s Union of New South Wales is worried the government will only help people in financial distress. Any moratorium may not cover landlords evicting for other reasons or people not in formal tenancies.
It is not just the low-income households affected. “The first waves that have been getting in touch with us have come from a range of industries that rely on people being out in public – hospitality, tourism, entertainment – and the industries that support them like design, advertising and media,” says Leo Patterson Ross, a senior policy officer at the Tenants’ Union of NSW.
“At the moment, our advice is to wait for the government announcement. We hope it will give people the stability and certainty they need and a more reasonable structure to work within. Unfortunately until that happens, we are worried people will be making decisions without all the information necessary – potentially costing them much more than necessary.”
So what can you do if you can’t pay rent?
First, tell your landlord or rental agency as soon as possible. Explain your situation and attempt to negotiate and discuss the possibility of a rent reduction, rent deferral or even a rent waiver for a period.
It’s unlikely to cost you anything to do so, and some landlords have proven to be understanding, especially if their mortgage costs are not excessive.
Remember, in the current situation, finding new tenants can be difficult so yours may well prefer you to stay. Rents are being slashed at the moment because interstate travel has dried up the interstate and international markets.
The Tenant’s Union cautions tenants against taking up an offer for rent deferral.
“We do not recommend rent deferrals for most people unless they think their income will be higher after the period than it was before – for most people it will only put pressure on household finances at a time when they are trying to recover from hardship. It’s like putting expenses on a credit card – it’s very risky,” says Mr Ross.
Can you be evicted for being late on rent? How quickly does it take and what are your rights?
Yes, being late on rent is grounds for eviction in most tenancy agreements. However in NSW, the timeframe for an entire process of evictions can take more than a month.
Tenants have to first owe 14 days worth of rent to the landlord.
The landlord is then allowed to serve a 14 day “notice of termination” or colloquially the eviction notice.
Then they can apply to the NSW Civil and Administrative Tribunal for orders – this process will take some weeks usually and it also depends on how much COVID-19 has affected the Tribunal processes as they have moved to phones.
If you get a notice of termination, the Tenant’s Union of NSW recommends not moving home before further announcement on the six-month moratorium on evictions is made. Get in touch with your local Tenants’ Advice Service for legal advice about this.
And lastly, you cannot be evicted from your home for rent arrears without an order from the Tribunal and only the Sheriff can physically evict you from your home.
What happens if you need to end your tenancy early due to hardship?
This is a possibility if you find yourself unable to continue renting the property. How it goes depends on a few factors like whether you’re in a periodic/ongoing agreement or a fixed-term agreement and whether a break fee is specified in your tenancy agreement.
If you are in a periodic agreement you can end your tenancy by giving a minimum of 21 days notice, and leaving by the vacate date in your notice. But you might be able to negotiate and agree on a shorter notice period with your landlord.
If you are in a fixed-term agreement you may have to pay a break fee or compensation to the landlord for breaking the tenancy agreement. This could be up to six weeks rent if less than half of the fixed term has expired. Otherwise the break fee would be four weeks rent.
NSW is planning to provide landlords with a tax discount in exchange for rent reductions. Other states are expected to follow.
Landlords and agents face fines of up to $126,000 for giving unqualified financial advice like asking tenants to access their super to pay off rent bills