How to navigate rent negotiations

By Emma Ryan 26 May 2020 | 1 minute read

NSW Fair Trading has clarified what landlords in the state can do should they find themselves in a position of negotiating a rental agreement with their tenant.

How to navigate rent negotiations

In a statement issued last week, NSW Fair Trading outlined what steps landlords can take if a tenant can no longer pay their full rent due to the impact of COVID-19.

The first step to take in this situation is for the landlord and tenant to discuss whether they can agree to a reduced rent or repayment arrangement, according to NSW Fair Trading.

“Landlords may be able to negotiate reduced repayments or a repayment freeze with their mortgage provider,” it said.

“…Landlords and tenants should be aware of what they are agreeing to in rent negotiations.


“It's important to distinguish between a deferral of part or all of a tenant’s rent payments and a waiver of part of or all of rent payments.”

  • Waiver: the tenant won’t be required to pay back an agreed amount of rent.
  • Deferral: the tenant must pay back an agreed amount of rent in the future.

“The amount of rent which is waived or deferred may be some or all of the regular weekly rental cost,” NSW Fair Trading said.

“Any agreement reached should specify what amount of rent will be waived or deferred.

“If rent is deferred, the agreement should specify when the rent is to be paid back, and how payments will be made to cover the amount (repayment plan).”

Elsewhere, landlords may embark on “good faith negotiations”.

“In general, a good faith negotiation means parties dealing honestly and fairly with one another to genuinely work towards a prompt and mutually beneficial agreement,” according to NSW Fair Trading.

“Good faith will depend on the circumstances of each case. All parties must act reasonably and be prepared to change their position or make concessions to achieve an agreement.

“If a negotiated agreement can’t be reached, both landlord and tenant will need to show they’ve attempted to negotiate in good faith.”

About the author

Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of content at Momentum Media.

Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.

Email Emma on: [email protected]Read more

How to navigate rent negotiations
How to navigate rent negotiations
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