How will the moratorium on evictions impact landlords and tenants?

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July 14 2021
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The NSW government has announced a 60-day moratorium on evictions, with landlords gifted incentives to reduce the burden on COVID-19-affected tenants.

How will the moratorium on evictions impact landlords and tenants?

Following a surge in COVID-19 cases, the state has been put on ice, with restrictions on movements extended for an additional two weeks as of Friday, 16 July.

With the deadlines extending, NSW Treasurer Dominic Perrottet made the announcement on Tuesday as the federal and state governments rolled out a $5.1 billion rescue package for businesses and households across the state.

As part of the package, tenants in NSW have been offered greater protections from the state government with a 60-day freeze on evictions for both residential and commercial tenants.

However, under the package, landlords will not be left high and dry, with the government announcing they too will be given financial assistance due to the loss in rent.

Under the new measures to protect both tenants and landlords, the NSW government will introduce a 60-day eviction moratorium if a tenant can prove they have lost 25 per cent of their income due to the lockdowns.

Residential landlords who decrease rent for impacted tenants can apply for a grant of up to $1,500 or land tax reductions depending on their circumstances.

Minister for Better Regulation Kevin Anderson said the short-term tenancy and landlords support package will provide renters and landlords with immediate assistance during the COVID-19 lockdown.

“We know a lot of people are currently experiencing hardship, and the NSW government is here to stand with renters and landlords while we work together to get through the latest COVID-19 outbreak,” Mr Anderson said.

“Our number one priority is the health and safety of our communities, and this package will provide support for both tenants and landlords, ensuring renters continue to have a roof over their heads while maintaining rental incomes for landlords.”

Mr Anderson said the new package will, for the first time, provide a rental subsidy grant of up to $1,500 for landlords who offer rent reductions to COVID-19-impacted tenants.

“We have always urged renters and landlords impacted by COVID-19 to negotiate and now, thanks to the NSW government, we expect these negotiations will be easier with landlords to be reimbursed up to $1,500 per tenancy when they reduce a tenant’s rent,” Mr Anderson said.

“These measures hinge on landlords and tenants working together through this challenging period, and we encourage both parties to enter negotiations in good faith.”

As for commercial and retail property, landlords will not be able to recover a security bond, lock out, or evict tenants affected by the restrictions until first attempting mediation.

Commercial, retail and residential landlords liable for land tax will be eligible for a land tax concession where they reduce the rent of their tenant.

However, these tenants will also be supported federally, with Prime Minister Scott Morrison announcing that around 500,000 small and medium businesses in NSW could be eligible for support payments of up to $10,000 per week.

This will apply to businesses with a turnover of between $75,000 and $50 million that have had a 30 per cent decline in turnover, according to Mr Morrison. These costs will be split 50/50 between the federal and NSW government. Small and medium businesses will be able to register their interest for the support payments from 14 July.

Property Council of Australia’s acting NSW executive director, Lauren Conceicao, said property owners provided more than $15 billion of support to tenants around the country during 2020 and 2021 and are once again supporting many small hard-hit tenants.

“The government support packages announced today are very welcome news, and commercial property owners are also once again stepping up to play their part, working closely with their smaller hard-hit tenants,” Ms Conceicao said.

She highlighted small CBD cafes, restaurants and retailers that rely on office workers as their customers bear the brunt of the necessary lockdown actions by governments.

“As they did so effectively last year, property owners are again engaging closely with their small-business tenants experiencing hardship in the current lockdown and are providing support on a case-by-case basis.

“This important case-by-case support for hard-hit small-business tenants will sit alongside the substantial government support announced today,” Ms Conceicao said.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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