NSW Issues New Regulations For Rental Properties In Response To Coronavirus

On 15 April 2020, the Residential Tenancies Amendment (COVID-19) Regulation 2020 (NSW) (“the Regulation”) was notified. The Regulation makes amendments to the Residential Tenancies Regulation 2019 (NSW) (“the Tenancies Regulation”) and to the Boarding Houses Regulation 2013 (NSW) (“the Boarding Regulation”) in response to the Coronavirus pandemic. These amendments are to apply for the moratorium period, which is defined as a period of 6 months starting from the commencement of the amendments. The Regulation wholly commenced on 15 April 2020.

Amendments Regarding Residential Tenancies

Schedule 1 of the Regulation inserts Part 6A into the Tenancies Regulation, which contains provisions prohibiting landlords from issuing termination notices for non-payment of rent or charges in certain circumstances. Part 6A is limited to households impacted by the Coronavirus pandemic. An impacted household is defined as a household that because of the pandemic has had a reduction in weekly income by at least 25% due to any 1, or more, of its rent-paying members:

• Losing their employment or income
• Having reduced work hours or income
• Having to stop working, or materially reduce their own hours due to illness with Coronavirus
• Having to stop working, or materially reduce their own hours due to another household member’s illness with Coronavirus
• Having to stop working, or materially reduce their own hours due to their own carer responsibilities to a family member who is ill with Coronavirus

The calculation of weekly household income includes any government payments received by each rent-paying member of the household. An impacted tenant is defined as a tenant who is a member of an impacted household.

Section 87 of the Residential Tenancies Act 2010 (NSW) (“the Tenancies Act”) allows a landlord to issue a termination notice on the ground that the tenant has breached the residential agreement. Section 88 of the Tenancies Act provides for grounds to issue a termination notice, where the breach in tenancy agreement arises solely from a tenant’s failure to pay any of the following:

• Rent
• Water usage charges
• Utility charges (including gas, electricity, or oil)

Under the new regulation 41C, for the duration of the moratorium period, landlords will be prohibited from issuing an impacted tenant with a termination notice under sections 87 and 88 of the Tenancies Act. Additionally, landlords will be prohibited from applying to the NSW Civil and Administrative Tribunal (“the NCAT”) for a termination order in relation to such a termination notice. Landlords are also otherwise prohibited applying to the NCAT for a termination order for a breach in tenancy agreement under the grounds specified in section 88 of the Tenancies Act.

Landlords will, however, still be able to issue a termination order that is otherwise prohibited, if the following conditions are met:

1. The notice or application to give notice is given at least 60 days following the commencement of Part 6A (being 15 April 2020)
2. The landlord has participated in a formal rent negotiation process with the impacted tenant in good faith
3. Given the circumstances, it is fair and reasonable that the landlord applies or issues a termination notice

The application for a termination notice is to be submitted to the NCAT, who will take into account various circumstances, including:

• Whether the impacted tenant has been able to continue to make payments
• The nature of any financial hardship the landlord or impacted tenant is experiencing
• The financial position of both the landlord and the impacted tenant
• Any specific vulnerabilities of an impacted tenant
• The availability and affordability of reasonable alternative accommodations for the impacted tenant

Part 6A also contains provisions specifying that the given termination date cannot be earlier than 90 days (after the day the notice is given) for termination notices issued under the following sections in the Tenancies Act:

• Section 84 (regarding the end of a residential tenancy agreement at end of fixed term tenancy)
• Section 85 (regarding the termination of a periodic agreement where no grounds are required to be given)
• Section 87 (regarding a breach of agreement, other than a termination notice on the ground specified in section 88)
• Section 94 (regarding termination of long term tenancies)

Under these amendments, landlords and their agents are also prohibited from listing an impacted tenant’s personal information in a residential database for a sole failure to pay rent, water usage charges, or utility charges.

Amendments Regarding Boarding Houses

Schedule 2 of the Regulation inserts Part 5 into the Boarding Regulation, which contains provisions limits how proprietors can issue eviction notices to impacted residents during the moratorium period. An impacted resident is defined as a resident who has had their weekly income reduced by at least 25%, because due to the Coronavirus pandemic, they have:

• Lost employment or income
• Had a reduction in work hours and income
• Had to stop working, or materially reduce their work hours due to their own illness with Coronavirus
• Had to stop working, or materially reduce their hours due to their own carer responsibilities for a family member’s illness with Coronavirus

Government payments are included when resident’s weekly income is calculated under this Part.

The newly inserted regulation 34 deals with eviction notices given solely on the ground that the resident has not paid residency fees payable under an occupancy agreement during the moratorium period. A 60 days written eviction notice can be given if the proprietor has, in good faith, participated in a formal rent negotiation process, but an agreement was not reached because the impacted resident did not participate in good faith. Otherwise, eviction notices can only be given with 6 months written notice.

The new regulation 35 requires eviction notices on a ground other than an excluded ground, to be given with no less than 90 days written notice. Regulation 35 is not limited to impacted residents. An excluded ground includes:

• Failure to pay residency fees, however, this is limited to impacted residents
• A resident intentionally or recklessly causing or permitting serious damage to the premises or other residents’ property
• Using the premises for illegal purposes
• A resident threatening, abusing, intimidating, or harassing other residents or the proprietor

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Residential Tenancies Amendment (COVID-19) Regulation 2020 (NSW) available from TimeBase’s LawOne Service