COVID-19 support for Landlords and Commercial Tenants in NSW

We’re covering the downsides of COVID-19 in every state for our Australian-based readers. In NSW (New South Wales), the government has announced new supports for commercial tenants and business owners in response to the impact of COVID-19. Here is an overview of the measures currently available.

Reintroduction of the obligatory code of conduct for business leasing

In accordance with the Mandatory Code of Conduct for Commercial Leasing, landlords are to grant rent exemptions to qualifying tenants affected by COVID-19. Key points include:

  • Homeowners will not be able to evict their tenants for specific infringements of the lease unless they have first renegotiated the lease and attempted mediation.
  • The Code of Conduct is applicable to commercial and retail tenants up to $50 million in sales eligible for the COVID-19 Commercial Lease, COVID-19 Micro-Business Lease, or JobSaver payment.
  • The code of conduct obliges landlords to offer a reduction in rent proportional to the drop in tenants’ turnover. Of the available rent reduction, at least 50 percent must be in the form of a waiver and the balance deferred.

Hardship Fund – $3,000 monthly allowance for small business or retail landlords 

Leases of up to $3,000 per month per property. It is available to small business owners or eligible resellers who offer rent waivers of at least the amount of the lease and any property tax reductions. For example, if a landlord offers a rent exemption of $3,000 but receives a property tax exemption payment of $500 from the government, they will be entitled to a rental property of $2,500.

To be eligible, landlords must:

  • You have a tenant who can benefit from protections under the retail and other commercial leases (COVID-19) regulations 2021.
  • You have a total of revalued taxable properties of less than $5 million (excluding principal residence)
  • Have offered rent exemptions to their interested tenants for at least the same amount as the grant and any property tax exemptions they are entitled to receive.
  • Have rental income as their main source of income
  • Testify that granting their tenant a rent exemption will cause them financial difficulties

We hope that the eligibility and detailed instructions on how to apply for the Difficulty Fund will be finalized soon.

Residential Rental Support Payment

Previously introduced at $1,500, the Residency Tenancy Support Payment has increased to $3,000 for eligible landlords. This payment will be available to landlords who agree to reduce rent for tenants affected by COVID-19 as of July 14, 2021.

The amount per owner will be limited to the rent reduction sent to tenants or $3,000, whichever is less.

Homeowners can file separate claims for each location on their property.

Landlords cannot require tenants to return the reduced amount of rent paid to them as residential rent allowance or property tax.

Eligibility

The landlord is eligible for this payment when:

  • The landlord has entered into a written agreement with the landlord to reduce or cancel the rent due from July 14, 2021. A copy of this contract will be required as well as a claim for payment 
  • The landlord has/does not claim the COVID-19 tax benefit on the land for the same rental.
  • The tenant is an eligible tenant.
  • There is a residential lease with a tenant; as proof, you will need a lease number or a written contract.

The landlord can choose to modify the rent for a period after September 11, 2021.

After September 11, 2021, rent reductions may be claimed as part of the payment.

How to Apply

Click on NSW Fair Trading to apply.

Who can claim?

A tenant, landlord, or qualifying administrative officer can initiate a Residential Tenancy Support payment request when the tenant is a COVID-19 tenant.

Eligibility

An eligible tenant affected by COVID-19 is a residential tenancy in which:

  • Eligible tenants live on the property. 
  • Since July 14, 2021, the household income of the tenant(s) has decreased or continues to decrease by 25% or more; this is in contrast to the four weeks preceding June 26, 2021 (tenant affected by COVID)
  • The reduction in family income is due to illness or loss of income due to COVID-19.
  • There is a residential lease.

Not applicable for operators or tenants of boarding houses, short-term rental properties, public housing, or sub-tenants.

You can claim up to $4,500 per property for rent payment from a tenant affected by COVID.

What you need to Apply

Qualified tenants will need:

  • A rental bond lodgement number
  • To ensure that the owner and/or administrative agent consent, they have to provide personal data, including bank details. You have to attach it to your application.
  • To retain reasonable evidence (to prove loss of income due to COVID-19)

Agent or Landlords making an application will need:

  • A rental bond lodgement number
  • Details of the account on which you collect rent for. For agents, this will be the rental trust account.
  • The contact details of all the parties to the tenancy agreement
  • To ensure that the owner and/or administrative agent consent, they have to provide personal data, including bank details. You must attach it to your application.
  • To retain reasonable evidence (to prove loss of income due to COVID-19)

If you do not lodge any bond, a copy of the rental of the house or, in the absence of a written contract, evidence such as rental receipts and proof that the tenant lives on the property, such as a utility bill.

Reasonable evidence includes payment receipts, cancellations, reduced hours, medical certificates.