NSW Parliament passes extra emergency measures: what this means for renters

On Tuesday and Wednesday this week NSW Parliament considered a number of measures that might provide further support for NSW renters during the COVID-19 pandemic. While not all of the measures we were hoping to see got through, there were a couple of small wins.

So, what did renters get?

2 week cap on break fee for tenants forced to leave

Where rent reduction negotiations have failed because the landlord won't engage properly impacted tenants (tenants who have seen a COVID19 related reduction in their total household income by 25% or more) will be able to end their fixed term tenancy early with reduced penalties. They can apply to Tribunal to end the tenancy, and only be required to pay up to a maximum of 2 weeks break fee (or compensation) in this circumstance. The Tribunal also has discretion not to impose any fee at all.

This will reduce the penalty tenants forced to leave will face if they need to break their lease early. Hopefully it will also encourage any reluctant landlords to engage more fully and in 'good faith' when their tenants initiate rent reduction negotiations. 

NSW Parliament recommends further rent relief

Parliament recommended a Rent Relief Scheme be established to provide up to $2,500 compensation for landlords who face financial hardship directly or indirectly as a result of COVID-19. Any compensation the landlord receives would be required to pass this on to their tenants as a rent reduction.

To be eligible landlords would be required to demonstrate their tenant:

• Has suffered a loss of 25% or more of their income
• Has less than $5000 in savings
• Is paying more than 30% of their income in rent to the landlord

The bill suggested the government could fund the scheme from the Property Services Compensation Fund. That Fund is funded by the Property Services Interest Account which holds the interest earned on rent and deposits held in agency trust accounts. This interest is also used for purposes related to housing, like partly subsidising the Tribunal's operational costs.

We're hoping NSW Government will consider how this recommendation can be implemented ASAP. We know there are many renters struggling at the moment. We hope the scheme, once introduced, might provide some much needed relief.

For the latest info see our Renters' Guide to COVID-19.