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Financial assistance packages targeted at renters

The economic impact of COVID-19 is being felt by tenants and landlords across Australia as conditions are imposed to help slow the spread of the virus.

With at least one million Australians expected to be face unemployment as a result of the crisis, Commonwealth Bank, Westpac, NAB and ANZ Banks – who between them underwrite the bulk of Australia’s mortgages – have agreed to pause home loan repayments for up to six months.

In addition, following a directive from Prime Minister Scott Morrison, most states and territories have agreed to impose a temporary six-month ban on evictions of people and businesses unable to meet their commitments due to financial distress.

But what else is being offered to assist landlords and tenants to balance the interests of renters with those of their landlords who also need a financial return to help to cover mortgages, rates and the other costs associated with being a property owner?

New South Wales
Date Announced: April 13, 2020

The NSW Government has announced a $220 million commitment to help encourage residential landlords and tenants to reach agreement on rent reductions during “this difficult time”. This is part of a $440 million rent relief package that also incorporates the needs of commercial tenancies.

The six-month support package includes a moratorium on applications for forced evictions due to rental arrears for those financially disadvantaged by COVID-19, and new requirements for landlords and tenants to enter into negotiations over rental payments in good faith.

The measures include an interim 60-day moratorium on finalising existing matters, or making new applications to the NSW Civil and Administrative Tribunal (NCAT) for forced evictions over rent arrears related to COVID-19.

Where a household is struggling to make rental payments and has suffered a loss of income equal to or greater than 25 per cent due to COVID-19, there is a new obligation to enter into negotiations with their landlord or managing agent, prior to seeking a forced end to the tenancy.

Tenants will be protected from eviction until NCAT is satisfied that negotiations have concluded. Any unpaid rent will accrue as arrears during this period.

In addition, residential landlords would be eligible for a land tax waiver or rebate of up to 25 per cent if they passed the saving on to tenants in financial distress.

There is also a one-off $2.5 million boost to tenancy advocacy and advice services across the state.

Tenants and landlords will also have access to assistance from Fair Trading and access to the NCAT to resolve matters after the end of the 60-day period.

Unlike most other states, the NSW government has at this stage opted against a rent increase ban.

See here for further detail.

Victoria
Date Announced: April 15, 2020

The Victorian Government has announced a $500 million package aimed at giving certainty to residential and commercial tenants and landlords.

The measures include introducing a temporary ban on evictions, pausing rental increases for six months, and providing land tax relief for landlords and rent relief for tenants.

Tenants and landlords who struggle to strike a deal over rent reductions will be given access to a fast-tracked dispute resolution service, with Consumer Affairs Victoria or the Victorian Small Business Commission mediating to ensure fair agreements are reached.

To encourage landlords to do the right thing by their tenants, the Government will provide $420 million in land tax relief. If a landlord provides tenants impacted by coronavirus with rent relief, they will be eligible for a 25 per cent discount on their land tax, while any remaining land tax can be deferred until March 2021.

To provide much needed peace of mind and security, evictions will be banned for residential tenancies for six months, except in some circumstances. Evictions will also be banned for six months for the non-payment of rent for commercial tenancies involving small and medium-sized businesses. Rental increases will also be banned for commercial and residential properties for the same period.

The Government will also create an $80 million rental assistance fund for renters facing hardship due of coronavirus. To be eligible, renters will need to have registered their revised agreement with Consumer Affairs Victoria or gone through mediation, have less than $5,000 in savings and still be paying at least 30 per cent of their income in rent.

See here for further detail.

Queensland
Date Announced: April 9, 2020
Status: Expected to be passed by the Queensland State Government on April 22, 2020.

The Queensland Government has committed over $400 million to support landlords and tenants impacted by the COVID-19 disaster.

Initiatives include up to $400 million in land tax relief for eligible landlords, which must be passed onto tenants, and a crisis payment of $500 per week for up to four weeks in rent relief for residential tenants who are homeless, or at imminent risk of becoming homeless and have exhausted other options.

Temporary legislative changes will be made to protect eligible tenants, including eviction moratoriums and rent freezes.

See here for further detail.

South Australia
Date Announced: 7 April, 2020.
Status: The bill for rental relief has passed in both state houses but regulations are yet to be implemented.

The South Australian government has endorsed a number of temporary initiatives aimed at helping landlords and tenants whose incomes have been affected due to COVID-19.

Under the COVID-19 Emergency Response Act 2020 (the amending Act), property inspections must be conducted by audio-visual or other electronic means, except in exceptional circumstances. Neither the landlord nor the agent should physically enter the premises.

Landlords are not allowed to increase the rent payable for a property during the COVID-19 pandemic – even if it is specifically permitted in the tenancy agreement.

The South Australian Civil and Administrative Council’s (SACAC) powers have also been extended under the act, allowing it to make any other orders it considers appropriate in applications related to financial hardship due to COVID-19. Either a landlord or tenant may make an application to terminate a tenancy agreement on the grounds of hardship with SACAT also considering whether or not to make an order for compensation in favour of either party.

For the duration of the amended act, a landlord is unable to terminate a tenancy on the basis of a tenant’s breach of their obligation to pay rent or water invoices if the tenant is suffering financial hardship due to COVID 19.

The onus is on the tenant to prove they are suffering financial hardship as a result of the pandemic. This may include: a letter from their employer, a separation certificate or information about their business that shows they have lost their job; bank account statements to indicate little or no savings, evidence of applying for a Jobseeker payment from Centrelink or evidence of an application to the South Australian Housing Authority or other organisation for financial assistance with their tenancy.

SACAT still make orders for Possession (eviction) when the tenancy has expired and the landlord has served a valid notice.

However, it must take into account the consequences of making an order for eviction during the pandemic.

See here for further detail.

Western Australia
Date Announced: 14 April, 2020
Status: Not yet passed

In Western Australia urgent legislation to address commercial and residential tenancies impacted by rental distress due to COVID-19 will soon be introduced into State Parliament.

Dubbed The Residential Tenancies (COVID-19 Response) Bill, the new laws include a moratorium on evictions for residential tenancies for six months and provide urgent support measures for tenants and landlords in response to pandemic.

Highlights of the bill include relieving lessors of the obligation to conduct ordinary repairs if the reason they cannot do so is COVID-19 related financial hardship or a lawful restriction on movement; and enabling a tenant to end a fixed term tenancy prior to its end date without incurring break lease fees (tenants will still be liable for damage and rent arrears).

The laws will apply equally to tenants in public and private housing, park homes as well as boarders and lodgers.

See here for further detail.

Tasmania
Date Announced: 25 March, 2020
Status: Passed

The Tasmanian Government has passed new legislation that will ban inspections, maintenance and evictions for non-payment of rent during the COVID-19 crisis – except in emergencies.

Dubbed the COVID-19 Disease Emergency (miscellaneous provisions) Bill 2020, it includes provisions for either tenants or landlords to end their lease if they’re experiencing severe hardship.

See here for further detail.

Australian Capital Territories
Date Announced: 2 April, 2020
Status: Passed

Our national capital has in place measures that link financial relief to landlords that reduce rents for tenants.

If landlords agree to lower rents by at least 25 per cent, they can get tax relief. Additionally, households that have experienced a 25 per cent drop in income can defer rates for 12 months.

The COVID-19 Emergency Response Bill 2020 also includes a ban on evictions for being unable to pay until at least June 30.

See here for further detail.

Northern Territory
Status: Residential tenancy laws to be discussed in the NT Parliament on April 24, 2020.

The Northern Territory Government has indicated it’s working on measures to create ‘fairer terms’ for new leases, as well as longer negotiating periods between tenants and landlords.

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