Rent negotiations

On Tuesday 13 July 2021,  the NSW Government's announced that it will provide financial incentive to landlords who provide rent relief to tenants during the July 2021 Moratorium which commenced on the 14th July 2021 and will end on the 11th September 2021. 

During this 60-day stop on evictions a landlord is prevented from taking any action to evict an 'impacted tenant' for rent arrears if they have been notified that the tenant is an impacted tenant and the tenant has paid at least 25% of the weekly rent.

You will need to contact the landlord or the agent and let them know you are an impacted tenant and you cannot afford to pay the full rent and you would like to negotiate a rent reduction. You should ensure this communication is in writing. While you are negotiating with the landlord it is important that you continue to pay at least 25% of the weekly rent to ensure you are protected by the 60-day stop on evictions. You can use this NSW Fair Trading template to initiate any negoitiations for a rent reduction with your landlord or agent. 

If your landlord waives some of your rent from the 14th July 2021, they can claim the amount waived (up to $1500) under the Residential Tenancy Support Program or as a deduction of any land tax (they cant claim both). The rent waiver can be for a longer period than the 60 days and they can also waive more than $1500. 

When you reach an agreement it must also be in writing.  When you reach an agreement for a rent reduction with your landlord/agent, it must also be in writing. You can use this NSW Fair Trading template agreement  to ensure your agreement for a rent reduction is in writing. 

These new laws do not affect any existing agreements that you currently have with your landlord to repay arrears or to waive or defer your rent payments due to COVID-19 but you may want to renegotiate with your landlord as there are now financial incentives for landlords who provide a rent reduction during this period.  

Have you accrued rental arrears before 26/3/21?

Impacted tenants who have rent arrears accrued during the period 15 April 2020 to 26 March 2021 have other protections which place some restrictions on the landlord terminating your agreement. If you have accrued arrears over this period and do not already have a repayment plan for the arrears, you should negotiate one with your landlord and use the Formal Rent Negotiation Process by NSW Fair Trading.  

You will need to contact the landlord or the agent and let them know that you need to negotiate a repayment plan. 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. You can find a template letter proposing a repayment plan to your landlord agent from NSW Fair Trading here.

When you reach an agreement it must also be in writing. Please find a template agreement here


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. 


What are ‘good faith’ negotiations? 


In general 'good faith' negotiation means parties dealing honestly and fairly with one another to genuinely work towards a mutually beneficial agreement in a timely manner. 'Good faith' will depend on the circumstances of each case and parties must act reasonably and be prepared to change their position or make concessions to achieve an agreement.

Good faith requires:

  • a willingness of the parties to share loss not caused by either;
  • a willingness of the parties to share information; and
  • active cooperation in the combined aims of the parties and of public health.

Active cooperation includes putting forward options for consideration and considering options proposed by the other party or the facilitator.

Parties should consider the interests of both parties and be:

  • honest
  • fair
  • reasonable and proportionate

Negotiations should be undertaken on a 'without prejudice' basis. 'Without Prejudice' means that the communication between the parties is made in an honest attempt to settle the matter, and any concessions made in the communication cannot be later put into evidence in Court/Tribunal.

The Landlord’s Financial Situation 

As part of 'good faith' negotiations you are expected to consider the landlord’s financial situation and any hardship they might be experiencing, or that may result from a reduction in your rent.

Landlord’s Insurance

The landlord may say they are not able to enter into negotiations for a rent reduction or a repayment plan for the arrears because their landlord insurance does not allow them to do this. While a landlord’s demonstrated inability to claim against loss via landlord insurance might be one factor considered when assessing the landlord’s anticipated financial situation, it does not follow that a landlord can refuse to negotiate a rent reduction or repayment plan with their tenant.

Relative financial position

Just as the landlord and the Tribunal will consider any assets you might have, the comparison of 'relative financial position' also includes an assessment of the landlord’s assets. Often their main asset will be the property you live in. The property may have increased in value since they purchased it – this is relevant to their financial position.

The Government has announced financial incentives for landlords who provide a rent reduction to tenants during the July 2021 Moratorium. You should ask your landlord if they are eligible for these incentives. 

See below for the types of information you can ask of the landlord.

General market rents and trends

Landlords should consider the alternatives to negotiating with you – if your tenancy is terminated due to arrears of rent or charges, the property may sit vacant, or they may need to drop the rent significantly. Refer to the result on our Rent Tracker Postcode Tool. You can adjust it to match your property type, size and postcode. This shows what similar properties in your area are actually being rented for.

You can download a PDF of your Rent Tracker result by clicking on the pdf download symbol download image at the bottom of the chart. You can then provide this to the landlord, agent or the Tribunal. You should also consider the vacancy rate in your area. If there are a large number of properties vacant, this is an indication that the landlord will find it more difficult to find a tenant (and also, that it may be easier for you to find a better deal if you need to leave).


What information needs to be shared in negotiation?


Establishing you are a COVID-19 ‘impacted tenant'

Initially when you approach the landlord about a rent reduction or a repayment plan for arrears they might ask you to demonstrate you are an ‘impacted tenant’. See eligibility criteria: COVID-19 Guide: Am I a COVID-19 'impacted tenant'?

You will need to provide some basic evidence of the change in your financial situation to demonstrate eligibility. This could include basic documents, such as:

  • proof of job termination/stand-down, or loss of work hours
  • other proof of reduced income
  • proof of any Government income support you are receiving or have applied for – indicate to the landlord or agent which of these is relevant
  • proof of prior income 

A landlord or agent may request a range of other financial information when you first initiate negotiations. Demonstrating eligibility should only require relatively limited documentation. However, it is likely you will need to share further financial information about your overall financial situation when you begin the next step of 'good faith' negotiations – but this is a two way street. You should also expect the landlord to be open and reasonable about sharing information about their financial situation during negotiations. 

Information to be shared during 'good faith' negotiations

During 'good faith' negotiations there is an expectation you will need to share the necessary personal financial information required to provide an honest and open indication of your financial position and any hardship you are facing.

Renters have sent us examples of very intrusive forms requesting all types of detailed financial information. There is no legal obligation to provide these details, however, refusing outright may lead to failed negotiations.

If you have lost your employment as a result of the health crisis, ask your ex-employer to provide you with a short email (if you don't already have some documentation) which you could forward to the landlord/agent. You could also choose to provide your bank statement with appropriate redaction so that, for example, purchases made cannot be seen. A letter or statement setting out of your financial position (which you have absolute control over in terms of content) may also assist. NCAT has a useful financial statement form which you can use to summarise your financial position in writing. You can also find a template letter from NSW Fair Trading here

Similar to negotiating the amount of information, you should negotiate the extent of the information provided.

The Australian Securities and Investments Commission warned real estate agents in this letter that they face up to five years jail if they ask tenants to withdraw super in order to pay the rent. 

Information from landlords

It is important to note that negotiations are not intended to be a one way flow of information. There is an expectation on landlords to also be open about their situation. NSW Fair Trading says the landlord should respond to you including information about:

  • their financial situation – being open and honest, including whether they rely on the rental income to cover mortgage repayments or other expenses;
  • conversations with their lender about waiving or reducing their own mortgage repayments;
  • the value of the property.

The Government has announced financial incentives for landlords who provide a rent reduction to tenants during the July 2021 Moratorium. You should ask your landlord if they are eligible for these incentives. 

Privacy concerns and considerations

You may be concerned about whether personal financial, health  or other information you share may be held after negotiations, and if so how this will be stored. In negotiation, privacy should be discussed very early in the process. It may be possible for the destruction of any personal information and/or documents to be negotiated.

It is certainly worth asking about the destruction of documents created in the negotiation process, except the final agreement.

Real estate agents may have some reasons for keeping records of events/transactions under the Property, Stock and Business Agents Act. If they can demonstrate the need to keep a copy of any personal information shared, you can ask what measures are in place to ensure this information is stored securely and confidentially.  If an agent has annual turnover of more than $3 million they may be covered by Commonwealth privacy law, details can be found here.

If you are using the Fair Trading formal dispute resolution process ask early on how to clarify what will happen to information collected and used during negotiations. This should be clarified for each party, but also for information collected by Fair Trading in their mediation role.

Fair Trading's general Privacy Statement can be found here and a guide to NSW privacy laws is on the Information and Privacy Commission website. If health information is provided the Health records and Information Privacy Act will apply, see details here.


What can I expect in negotiation? 

While there is no guarantee what your first attempt at negotiating will look like, it is useful to be aware that NSW Fair Trading requires landlords and tenants to approach negotiations with an open mind and an empathetic ear. Understanding of both the tenant’s and landlord’s financial position will help to ensure a workable outcome. Parties should be prepared to look at a range of options where these are affordable, such as but not limited to:

  • agreeing to a longer repayment period for tenants to repay arrears;
  • waiving arrears;
  • allowing the tenant to end a fixed-term agreement early, possibly without or with a reduced penalty or by applying the break fee formula that applies in agreements entered into after 23 March 2020 to earlier agreements.

This information is good to keep in mind and refer the other party to.


The role of the agent

Where an agent is involved, the agent must contact the landlord as soon as practical to inform them of the tenant’s circumstances and explore opportunities for a repayment plan. 

It is important to always remember that agents are engaged by landlords to act in the landlord's interests, and their Code of Conduct requires them to generally act in the client’s (landlord's, not tenant's) best interests. The agent does not have you as a client – they work for the landlord. However, they do have obligations to act fairly. You should consider a complaint to NSW Fair Trading if they do not.

During this time it is useful to be able to draw to an agent’s attention that NSW Fair Trading has said the COVID-19 pandemic presents a highly unusual set of circumstances and means agents may have to change the way they relate to both parties. The NSW Fair Trading expects agents to play more of an intermediary role between the tenant and landlord to comply with both the letter and spirit of the tenancy laws and the government’s broader relief package.

They have said what was in the landlord’s best interests before COVID-19 may well not apply now, so due consideration should be given to whether maintaining an existing tenancy with changed terms may be more viable than seeking termination and attempting to re-let the property.

NSW Fair Trading encourages agents to:

  • Ensure the process for tenants is accessible and easy to understand
  • Ensure both parties are aware of the option to engage Fair Trading for dispute resolution if the parties cannot reach an agreement
  • Ensure that correspondence is passed on/communicated in a timely manner
  • Ensure any evidence required from tenants is reasonable and sufficient to demonstrate the person is COVID-19 impacted and has suffered a loss of household income
  • Keep good documentary records of their interactions and discussions with landlords and tenants during negotiations, which will be especially important if the matter eventually progresses to NCAT and good faith negotiations must be demonstrated.


What if the landlord won't negotiate?

Rent reduction during the July 2021 Moratorium

You should keep paying at least 25% of your weekly rent to ensure you are covered by the 60-day stop on evictions. These provisions commenced on the 14th July 2021 and will end on the 11th September 2021. 

Formal arrears repayment negotiation process

If you are unable to pay the accrued arrears and your landlord won't negotiate a repayment plan, your landlord may move to evict you, so you have two options: to seek to enter the Fair Trading formal arrears repayment negotiation process, or to move out (see: How do I end my tenancy agreement?).

NSW Fair Trading provides a dispute resolution process that landlords and tenants can use if they can’t reach an agreement themselves. See below for more detail. 

Fair Trading will request evidence from the tenant about their previous income and current income from all sources. Information will also be sought about any application the tenant has made for income support.

Tenants need to have an idea of how much they can afford in rent and repayments when considering negotiations. Fair Trading will then contact the landlord to seek a mutual agreement on a temporary arrangement for the payment of rent.


Formal Arrears Repayment Negotiation Process – facilitated by Fair Trading


What is the NSW Fair Trading Formal Arrears Repayment Negotiation Process? 

The Formal Arrears Repayment Negotiation process facilitated by NSW Fair Trading is one of the key measures announced by the NSW Government in response to COVID-19. This formal negotiation process is an administrative intervention to facilitate negotiations between landlords and tenants. Whilst it is an administrative intervention, regulations have been created to give it effect. 

How to initiate the Formal Arrears Repayment Negotiation Process? 

It is important to initiate the Formal Arrears Repayment Negotiation Process in order to fully access the range of protections noted above. And we recommend that tenants insist on engaging in this process if the landlord/agent refuses to engage with you properly about a repayment plan for arrears. 

You can initiate the Fair Trading Formal Rent Negotiation Process online by completing and submitting these two forms:

  1. Formal Arrears Repayment Negotiation application form, and
  2. Property Enquiry/Complaint form

There are five sections to the Property Enquiry/Complaint form. We recommend that you print out each section as you go so that you do not lose any important information. Four of the five sections of the Application require details of the parties and the property:

  1. Your details
  2. Other household member details
  3. The landlord/agent’s details
  4. Property details

Dispute Details

The section in the Formal Arrears Repayment Negotiation Process application form regarding “Dispute Details” is where you will need to outline how you have attempted to engage in negotiations for an arrears repayment plan but without any success. If possible, provide plenty of detail, including all your attempts at negotiation (you can attach files, e.g. email correspondence), and how and why your case needs to be considered urgently.

Sample ‘Dispute Details’

I seek assistance from NSW Fair Trading for a facilitated formal arrears repayment negotiation process. On [date] I wrote to my landlord/agent and requested a repayment plan due to my circumstances. Unfortunately, we have not been able to negotiate successfully. My rent is currently [$x] and I am currently [$x] in arrears. If there is no urgent assistance from Fair Trading, I will go into further debt and financial hardship. I ask Fair Trading to give urgent consideration to my case and I attach all the relevant information for your consideration. I am seeking to pay off my arrears by making weekly payments of [$x] from [date] to [date] in addition to my contract rent. I await your early reply. 


Attached: (i) Email to landlord/agent, (ii) Response from landlord/agent about repayment plan for arrears, (iii) Financial Plan (if any), (iv) Rent ledger showing arrears, (v) a short statement from you about your circumstances

Other Considerations

You will need to have an idea of how much you can pay when considering negotiations. 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.