The NSW Government has granted a 6-month extension to the measures put in place to help residential tenants who are financially who are disadvantaged by COVID-19. The measures that have been extended include:

• Preventing landlords from evicting COVID-19 impacted tenants for rental arrears unless they have attempted to negotiate a rent reduction in good faith

• Allowing tenants who are impacted by COVID-19 to apply to the NSW Civil and Administrative Tribunal to end fixed-term agreements in certain circumstances

• Preventing landlords and property managers from listing COVID-19 impacted tenants on a tenancy database if they go into rental arrears

• Extending the 90-day minimum period of notice that landlords must give tenants for certain other evictions that are not related to rental arrears

Whilst many might view this as a positive step in the current climate, we need to ask if it is, really.

Ultimately, landlords can terminate a lease for their own hardship, and tenants will need to pay full rent at some stage. Once the extended moratorium ends, it will have been 12 months of:

• rent deferrals or

• rent reductions

In the case of rent deferrals, those amounts will need to be re-paid. This potentially leaves tenants with very large debts of rent owed to landlords. Tenants can potentially access 12 months of rent deferrals, for example paying $800pw rent instead of their usual $1,000pw rent - but those $200pw deferrals add up. Across a 52-week period, that is $10,400 that will need to be re-paid at a time when the usual rent will revert back to $1,000pw. For a COVID-19 impacted tenant, that is a significant amount to owe and need to re-pay. For a COVID-19 impacted landlord, it is a lot to be owed and potentially places the landlord into financial distress. The landlord’s financial distress can signal the valid termination of the lease.

In the case of a straight rent reduction, that is a period of time that the landlord foregoes rent, or a portion of the rent, and in time, full rent needs to be paid.

Whilst it is a positive measure that COVID-19 impacted tenants are protected from eviction for 12 months, I wonder if it delays a potentially inevitable decision to move to a more affordable area, or whether it artificially props up the rental market by minimising the movement (high vacancy rates, lower rents) that would otherwise occur. We’ll have to wait and see.

Melissa Maimann is a licensed real estate agent, buyer's agent and rental search / relocation agent in Sydney. She saves renters valuable time and frustration offering an affordable service that finds and secures the best rental properties quickly, easily and effortlessly. Her application success rate is 100%. If you need a Licensed Real Estate Agent to find your next rental home for you, don't hesitate to make contact.