Your rent payments are a fundamental part of your tenancy. Not paying your rent is a breach of your agreement and can lead to a substantial debt and even losing your home if you don't take steps to manage it.
The Evictions Moratorium protects 'impacted tenants' from eviction, but this does not mean that you can just stop paying rent, or just pay less rent. You will need to contact the landlord or the agent and let them know that you need to negotiate a rent reduction. You need to be formal and make sure your initial contact, as well as negotiations are in writing so you will have a record of what has happened. When you reach an agreement it must also be in writing, see our template in the information below.
Many people do not have experience negotiating and this can be an intimidating prospect. The information in this section will help you prepare for negotiation to give you the best chance at an outcome that works for you. For more on the negotiation process itself, see COVID-19 Guide: Rent negotiations
- Am I a COVID-19 'impacted tenant'
A COVID-19 'impacted tenant' is defined as a tenant in a household (meaning any tenants or other persons living together in the same residential premises) which has had a reduction or loss of work and/or income because of the pandemic AND as a result, the weekly household income has been reduced by 25%.
Your renting household needs to be able to demonstrate any 1 or more rent paying members of the household have:
- lost employment or income as a result of the impact of the COVID-19 pandemic, or had a reduction in work hours or income as a result of the impact of the COVID-19 pandemic, or
- had to stop working, or materially reduce the member’s work hours, because of – the member’s illness with COVID-19, or another member of the household’s illness with COVID-19, or the member’s carer responsibilities for a family member ill with COVID-19
And as a result of the above factors
- the weekly household income for the household has been reduced by at least 25% compared to the weekly household income for the household before the occurrence of any of the matters
The 25% reduction in household income is assessed on income after tax, and is assessed on total household income - not just any one individual in the household. This includes any government assistance, such as the new job keeper payments. The ‘household’ is understood to be everyone living in the home contributing to rent, not just those listed on the tenancy agreement.
See also 'Eligibility' in Six month moratorium on residential tenancy evictions during COVID-19 (NSW Fair Trading website).
What if I am NOT an 'impacted tenant'?
If you do not qualify as a COVID-19 'impacted tenant' – for example your household income is reduced by 20% – you may still enter into negotiation with the landlord and access the NSW Fair Trading Dispute Resolution process. NSW Fair Trading will consider an application for assistance by a tenant whose income has reduced by less than 25%. Each case will be assessed on its merits and will require the tenant to provide evidence of any additional hardship.
While you will not receive the same restrictions against eviction, the NSW Civil and Administrative Tribunal still has discretion about whether to proceed with rent arrears evictions. Each case will be assessed on its merits and will require the tenant to provide evidence of any additional hardship.
- What support is available if I have lost income?
Economic Justice Australia has useful resources about JobSeeker and about other Centrelink payments during COVID-19.
NSW Government assistance for private renters:
Check out rent assistance products available through DCJ to see if you meet eligibility requirements, especially if you were already struggling prior to COVID-19. DCJ Housing offers rent assistance for people looking for private rental, they can help pay for urgent rental costs and can also help people start a tenancy with an interest-free bond loan, or keep a tenancy with help to pay the rent.
Help setting up a new private rental includes a tenancy guarantee; Rentstart Bond Loan; Advance Rent for Bond Loan and additional assistance for public housing tenants looking to move Help keeping your current private rental includes Tenancy Assistance with rent and water arrears; Rent Choice Assist helps with rent payments; Rent Choice Start Safely for people escaping domestic violence; Rent Choice Veterans for former ADF members; Rent Choice Youth for people aged 16 to 24 years and Private Rental Subsidy for people waiting for public housing. Note - there is currently a reference to Rent Choice Assist COVID-19, this program closed in July.
Information about these products is available in factsheets in community languages:
Simplified Chinese | Traditional Chinese | Arabic | Dari | Farsi | Vietnamese
You can find an analysis of rental assistance programs available to tenants in NSW here.
Other NSW Government COVID-19 related assistance:
The NSW Government has a general webpage that provides a list of all of services and assistance available to NSW residents here. You can go to the COVID-19 Assistance Finder and answer a quick questionnaire that will direct you to the services available to you.
You can get free financial advice from a financial counsellor. See the Financial Rights Legal Centre website to find a service near you.
You can call the National Debt Hotline on 1800 007 007 for free and confidential advice from professional financial counsellors. The hotline is open from 9.30am to 4.30pm, Monday to Friday.
You can also contact your financial institution regarding hardship arrangements. If you find yourself in dispute regarding your claim with a bank you can contact the Australian Financial Complaints Authority.
If you are having trouble paying your energy bills the Australian Energy Regulator (AER) has a very useful factsheet about hardship and your rights and what you can do to seek help from your energy provider.
If you are having trouble paying rent or utilities you may be eligible for a no interest loan of up to $3,000 through Good Shepherd ANZ. More information and applications can be made here.
If you need assistance with food, check Food Relief Services in NSW. One organisation that assists here is the Mobile Community Pantry run by Anglicare.
- What should I do if I can't pay my full rent?
If you find that you cannot manage to pay your full rent you should contact the landlord or agent about paying a reduced or no rent for a short period. This may be in their interests because it may be much more difficult and expensive to replace you than give some reprieve, and market rents are now dropping. Some landlords will be more willing to do this, especially if their mortgage costs are not excessive.
You can try to negotiate a rent reduction regardless of whether you fit within the eligibility criteria of being a COVID-19 'impacted tenant' (see above). See the information below for things to consider before and during negotiations.
Step 1: Work out what you need to manage your rent
Rent reduction: waiver or deferral. What will work for you?
A rent waiver generally refers to the landlord agreeing to not collect rent or only partial rent for a period. The tenant is not required to pay this amount back.
Rent deferral is a situation where the rent for a period is still payable, but the actual payment is delayed for a period. The tenant has a debt, with an agreed repayment plan that starts in the future. A deferral can be for the entire rent but it is more likely to be for part of the rent. It is important to consider your ability to make future repayments when considering this option.
Think very carefully about any offer of rent deferral, i.e. an agreement to defer rent now, but requires you pay back rent later – especially where there is no rent waiver included as part of the final negotiated outcome. This may cause significant issues later on. It is a good idea to call your local Tenants' Advice Service to get advice before entering into a rent deferral agreement.
A rent reduction agreement can be for a combination of part waiver and part deferral. If you are discussing this option with the landlord or agent ensure you are clear about what portion of the reduction will be waiver, and what portion is deferred.
A rent freeze is not a rent reduction. It does what you might expect – it keeps things exactly as they currently are, frozen. It means that rents cannot be increased for a period. It does not mean the rent gets reduced, and current rent is still payable in the regular time periods. However you might usefully discuss and confirm a rent freeze with the landlord when negotiating the repayment period, to confirm there will not be a rent increase during the period you are repaying any deferred rent.
Accumulated arrears or unpaid rent
If you are already behind in your rent you need to take this into account during negotiations and discuss with the landlord or agent how you will treat any arrears accumulated up until the point at which you come to an agreement on a new reduced rent. You should also take this into account when calculating what you can afford now and what you can afford to pay in the future.
What can I afford?
Rent Reduction Calculator
We have created a Rent Reduction Calculator to help you work out what you can afford or help you consider an offer made by the landlord and what payments options could work for you.
Our Rent Tracker Postcode Tool can also assist to show what rents are for other properties in your area.
Putting together a budget
For assistance in putting together a budget you can speak with a financial counsellor. See the Financial Rights Legal Centre website or National Debt Hotline for free resources, or to find a free service near you. You might also find the budgeting resources available on the moneysmart.gov.au website useful.
We have heard from renters who’ve contacted their landlords or the real estate agents about being in financial distress, and have been told to consider applying for early release of their superannuation and/or documentation of this before their request for a rent reduction or early release from their lease is considered.
The Australian Securities and Investment Commission has made clear they believe this behaviour may be a breach of the Corporations Act and an agent found to be in breach could face hefty penalties. If the agent or landlord actively encourages you to access your super you might want to provide them this ASIC letter and consider lodging a complaint with ASIC.
Step 2: Write to the landlord/agent with your proposal
Request a rent reduction
Write to the landlord/agent with your proposal. We have a template letter you can use.
Outcome in writing
If they agree to reduce your rent make sure you have that agreement clearly in writing. You can use our template Rent Reduction Agreement.
Step 3: Negotiations
Depending on their response, you may need to negotiate with the landlord or their agent. For information on the how to negotiate, what to do if the landlord won't negotiate, and the Fair Trading Formal Rent Negotiation Process, see COVID-19 Guide: Rent negotiations
- What if I get a rent increase?
Unlike in commercial tenancies there are no new provisions to stop rent increases during this period for any residential tenants.
However, just because you receive a notice, does not mean that you have to immediately accept it. If you receive a notice of a rent increase you should respond quickly to the landlord or agent, asking them to reconsider. You can make the following points:
- Question why you are being notified of an increase at a time when landlords are being advised to respond to the current crisis by offering rent reductions (Please see NSW Fair Trading’s guidance for negotiating rent payments here);
- Advise if an increase will cause you financial stress;
- Point out that market rents are dropping and they need to consider keeping you in the tenancy or they will have to look for a new tenant at a lower rent.
You can also apply to the NSW Civil and Administrative Tribunal for an order that the new rent is excessive. You must apply to the Tribunal within 30 days of getting a rent-increase notice.
Make sure you read Factsheet 4: Rent increases for the processes to follow.