Tenancy guarantee: information for landlords and agents
Last published 22 Oct 2018
The Tenancy Guarantee program encourages private sector landlords and agents to rent properties to people who are having difficulty entering the private rental market even though they have the income and skills to sustain a successful tenancy.
What is a Tenancy Guarantee?
A Tenancy Guarantee of up to $1,500 (including GST) is available to landlords/agents to cover rental arrears and/or property damage over and above the rental bond. The Tenancy Guarantee is valid for the fixed-term period of the tenancy agreement for up to 12 months, or until the tenancy is terminated, whichever is sooner.
Tenancy Guarantees are issued by the Department of Communities and Justice (DCJ) and Social Housing Management Transfer community housing providers
Why is a Tenancy Guarantee needed?
The Tenancy Guarantee offers an incentive and added security for landlords and agents to accept people they might otherwise refuse as tenants. The Tenancy Guarantee is only intended to supplement the rental bond for the initial fixed-term period of the lease.
The Tenancy Guarantee also helps tenants build a successful tenancy history, and reduces the disadvantages they previously experienced when trying to access the private rental market.
Tenancy Guarantees are available to people who:
- meet social housing income eligibility criteria, and
- have already looked for private rental accommodation without success, and
- have been assessed as able to afford a private rental, and
- have been assessed as able to sustain a private rental, and
- do not have a current Tenancy Guarantee, and
- have agreed to the conditions for receiving a Tenancy Guarantee.
The Tenancy Guarantee only applies to agreements or premises that are covered by the Residential Tenancies Act 2010. Please refer to sections 6 and 7 of the Act.
Steps to establishing a tenancy with a Tenancy Guarantee
There are three simple steps to establishing a tenancy with a Tenancy Guarantee.
Applications for a Tenancy Guarantee are assessed by FACS or Social Housing Management Transfer community housing providers.
2. Tenancy Guarantee Offer
If the client is approved, we will provide a letter confirming the Tenancy Guarantee Offer.
A client with a Tenancy Guarantee will show the offer letter when seeking to rent from you. The letter will be printed on letterhead and will include:
- a Tenancy Guarantee registration number, and
- confirmation of the Tenancy Guarantee offer and expiry date, and
- maximum weekly rent, and
- conditions of the Tenancy Guarantee offer, and
- contact details of the social housing provider issuing the offer.
If you are able to offer the client a tenancy, you should:
- prepare and sign a Residential Tenancy Agreement with the client, and
- return a copy of the signed tenancy agreement, a completed landlord/agents acceptance of Tenancy Guarantee and a copy of the signed condition report to the client and the social housing provider.
3. Activating the Tenancy Guarantee
Once the above documents are received, the social housing provider will:
- confirm that the property is eligible for a Tenancy Guarantee, and
- confirm your Acceptance of a Tenancy Guarantee and condition report, and
- contact you to ensure that you understand the terms of the Tenancy Guarantee, and
- activate the Tenancy Guarantee, and
- confirm with you in writing that the Tenancy Guarantee has been activated.
Landlord/agent responsibilities during the tenancy
By signing the landlord/agent’s acceptance of Tenancy Guarantee, you have a responsibility to mitigate loss, act if a tenancy breach occurs, and liaise with the social housing provider if problems arise.
Duty to mitigate loss
In accepting the Tenancy Guarantee, you agree to take prompt and appropriate action to avoid or minimise loss if the tenancy agreement is breached. This includes notifying the social housing provider of any breaches, conducting regular property inspections, and making courtesy contact with tenants if rent falls behind.
If you claim against the Tenancy Guarantee, you must demonstrate that all reasonable action was taken to mitigate loss.
Action for tenancy breach
If a tenancy breach occurs you must:
- notify the tenant in writing within seven days that:
- they have fallen into rent arrears and/or
- you are aware of damage to the property and/or
- you are aware of any other loss that is the tenant’s responsibility
- give notice that the tenancy will be terminated if the breach is not resolved within 14 days of that notice
- contact the social housing provider within seven days for help in resolving the situation.
Liaison with the social housing provider
You should contact the social housing provider if:
- there are changes to a shared household that is subject to a Tenancy Guarantee
- you are aware of problems affecting the sustainability of the tenancy
- the tenancy has been breached
- the tenant fails to rectify tenancy breaches.
At the end of the tenancy
You will be informed when the Tenancy Guarantee is due to expire. If you are satisfied with the tenancy you may agree to the continuation of the residential tenancy agreement beyond the fixed-term period on a week-to-week basis.
Making a claim against the Tenancy Guarantee
The social housing provider must be notified of your intention to lodge a claim:
- within seven days of becoming aware of a breach of the residential tenancy agreement that will lead to a claim, or
- within seven days of the expiry of the Tenancy Guarantee.
The Tenancy Guarantee will automatically expire if the tenancy is terminated.
Action to claim the rental bond or make an application to the NSW Civil and Administrative Tribunal (NCAT) should commence within seven days of the expiry of the Tenancy Guarantee.
All final claims with evidence must be lodged within three months of the expiry of the Tenancy Guarantee.
The Tenancy Guarantee only applies to agreements or premises that are covered by the Residential Tenancies Act 2010.
A claim will only be considered valid if you can show that all steps have been taken to mitigate loss.
Submitting a claim
To make a claim, the money owed from rent arrears or damage must exceed the bond. When this is the case, take the following steps.
- If the claim is seeking to cover damage, invite the social housing provider to inspect the property. If possible, this should occur before you have quotes for repairs.
- Submit a claim for refund of bond money form to the Rental Bond Board. You should state the total amount you believe the tenant owes.
- Send a completed Tenancy Guarantee claim form to the social housing provider. The claim must include:
- a copy of the tenancy agreement, and
- a copy of the Tribunal order if you have made an application to the NSW Civil and Administrative Tribunal (NCAT) specifying the amount owed to you, that is greater than the bond, including interest, and
- evidence of steps taken to mitigate the loss, and
- evidence that all of the bond has been paid to you, and
- evidence establishing the amount of debt, including rent records or receipts or quotes for repairs, and
- evidence of more than one quote for repairs if the damages claim is substantial (the social housing provider will determine whether this is necessary), and
- a forwarding address for the tenant (if available), and
- an itemised invoice up to $1,500 for the claim, including GST. The claim cannot be more than the total amount of loss stated on the Claim for Refund of Bond Money Form, minus the rental bond.
When a tenant disputes a landlord’s claim
If a tenant considers your claim to be unreasonable, the tenant will settle the dispute with you in the NSW Civil and Administrative Tribunal.
When a landlord or agent disputes a social housing provider's decision
If you disagree with a decision made by the social housing provider, you should first discuss your concerns with a staff member. The next step if you still believe the decision is wrong, is to ask for a formal review of the decision. To do this you should submit details of your dispute in writing to the social housing provider.
Assessment of the claims
After receiving a Tenancy Guarantee claim form, the social housing provider will assess the claim and if satisfied that the evidence justifies the claim, it will be paid. If there is insufficient evidence to support the claim, the social housing provider will notify you and ask for any additional, specific information needed to make a decision.
The social housing provider is not in any way liable to the landlord or any other person or body for any costs or damages arising out of the Tenancy Guarantee or the residential tenancy agreement over and above the express terms of the Tenancy Guarantee.
If the social housing provider deems the claim partly or wholly unsupported, it can:
- reduce the amount to be paid, or
- assess the claim as ‘not proven’ and pay nothing.
You will be informed in writing about the decision and your options for complaint or appeal.
If a social housing provider believes that the Tenancy Guarantee has been abused, it can recommend that you be excluded from further participation. If the claim is deemed fraudulent, the matter will be referred to the social housing provider’s Legal Services for further action.
Summary of Tenancy Guarantee conditions
The Tenancy Guarantee is offered subject to the following conditions:
- The offer only applies to private rental properties covered by the Residential Tenancies Act 2010 when there is a signed residential tenancy agreement in place. The Tenancy Guarantee covers the fixed-term period of the lease, to a maximum of 12 months or until the termination of the tenancy, whichever occurs first.
- The Tenancy Guarantee offer only applies to properties with a maximum weekly rent equal to or less than the amount identified in the Tenancy Guarantee offer letter.
- The social housing provider reserves the right to inspect the property before the completion of the condition report and in the event of a claim.
- A claim will only be considered valid if the landlord/agent has notified the social housing provider within seven days of becoming aware of a breach of the residential tenancy agreement and can show that all steps have been taken to mitigate the loss.
- All claims must be made to the social housing provider within seven days of the Tenancy Guarantee expiry.
- A claim can only be made against the Tenancy Guarantee after the rental bond is first claimed in full. Landlords/agents must lodge the claim for the rental bond within seven days of the Tenancy Guarantee expiry.
- Landlords/agents must commence any NSW Civil and Administrative Tribunal action within seven days of the Tenancy Guarantee expiry.
- Where the landlord/agent cannot gain vacant possession to assess damage or arrears, they should notify their social housing provider immediately and commence NSW Civil and Administrative Tribunal action within seven days.
- All claims must be lodged within three months of the Tenancy Guarantee expiry.
- Any claim must include copies of orders from the NSW Civil and Administrative Tribunal and an itemised invoice of the claim, including evidence establishing the amount of debt such as rent records and quotes/receipts for repairs.
Are all your questions answered?
For more information call the Housing Contact Centre on 1800 422 322, or visit your local FACS or Social Housing Management Transfer community housing provider office.