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The PropertyNow Blog

Surviving Covid-19: Help and Guidance for Landlords

spraying disinfectant on a table
covid19 for landlords The coronavirus epidemic is putting financial strain on landlords and tenants across Australia. It may be, your tenant is struggling to pay their rent, putting pressure on you as a landlord if you’re still bound by mortgage payments and outgoings. The good news is, there is help available to both landlords and tenants to ease the squeeze. Here we explore the restrictions in action across each state, the support measures available and what to do if your tenant is struggling to pay their rent.

A state-by-state summary of the Covid-19 regulations and support measures

Each state is enacting the moratorium differently, putting their own relief measures in place for both residential and commercial landlords and tenants.

Victoria

Updated on 28th March 2021

Moratorium conditions:

  • Rent reduction agreements can no longer be lodged with Consumer Affairs Victoria 
  • Rental providers (landlords) can issue a notice to vacate to renters (tenants) and raise the rent again, but new rights and responsibilities apply
  • Apply directly to the Victorian Civil and Administrative Tribunal (VCAT) for dispute resolution

Support measures:

  • Applications for the rent relief grant have closed
  • If you have an unresolved dispute about a rent reduction that was registered with Consumer Affairs Victoria before 29 March 2021, it will be referred to VCAT.
  • Renters can contact Consumer Affairs Victoria for advice if their rent reduction agreement is expiring and they continue to have trouble paying rent.

New South Wales

Updated 27th March 2021

Moratorium conditions:

  • Landlords will only be able to evict these tenants for these arrears if they have first attempted in good faith to negotiate a repayment plan. It also has to be fair and reasonable to evict.
  • If a landlord and tenant have agreed to a repayment plan, the tenant cannot be evicted unless they have failed to meet agreed repayments on two consecutive occasions.
  • Tenants and landlords will continue to be able to apply to NCAT to terminate tenancy agreements on the basis of hardship.

Support measures:

  • Tenants and landlords will be assisted by Fair Trading to negotiate repayment plans for arrears accrued during the moratorium period.
  • COVID-19 impacted tenants are also permanently protected from being listed on tenancy databases for arrears accrued during the moratorium period.
  • A six-month transitional period means COVID-19 impacted tenants who accrued rent arrears between 15 April 2020 and 26 March 2021 will not be subject to the standard tenancy eviction rules for those arrears.

Queensland

Moratorium conditions:

  • Protections for tenants against being listed in a tenancy database for rent arrears caused by COVID-19 impacts
  • Limits on reletting costs for eligible tenants who end their fixed term tenancies early
  • Short term tenancy statement extensions for moveable dwellings
  • Relaxed repair and maintenance obligations.

Support measures:

  • Provisions allowing tenants experiencing domestic and family violence to end their tenancies quickly
  • Applications for the rent relief grant have closed

South Australia

Moratorium conditions:

  • There is a short-term moratorium on eviction for non-payment of rent due to severe rental distress as a result of COVID-19
  • Landlords cannot increase rent
  • Landlords may use technology such as face-time, live video or time-stamped photos for routine inspections where possible, unless there are exceptional circumstances and sufficient safety measures in place for an inspection in person

Support measures:

  • Tenants cannot be blacklisted as a result of circumstances caused by Covid-19.
  • The South Australian government has cut land tax by $189m from July and extended a $13m relief package to allow deferment of 2019-20 land tax bills by six months.

Western Australia

Updated 28th March 2021

Moratorium conditions:

Support measures:

  • Landlords and tenants are encouraged to act and negotiate in good faith to agree on reasonable and workable tenancy arrangements, helping to create a safe and secure renting future for everyone.

Tasmania:

Moratorium conditions:

  • Changes to the Residential Tenancy Act 1997 have been introduced  to allow the Residential Tenancy Commissioner to issue a repayment order which will allow landlords to recover any outstanding rental arrears which have been accrued during the COVID-19 emergency period.

Support measures:

  • The Tasmanian Government is providing financial support for residential tenancies in the private market and who are experiencing financial hardship due to the impact of the coronavirus (COVID-19).
  • The COVID-19 Rent Relief Fund and Landlord Support Fund offers support of up to $2,000 or four weeks rent per fund to eligible tenants and landlords.
  • Tenants can apply for a first, second, third, fourth or fifth support payment if eligible.
  • Landlords can apply for a first, second, third and fourth support payment if eligible.
Additional support is available between 1 April 2021 and 30 June 2021

Australian Capital Territory

Moratorium conditions:

These measures commenced on 23 October and will operate until 30 April 2021 
  • A transition period which limits evictions on the basis of rent arrears accrued during the moratorium for COVID-19 impacted households in certain circumstances;
  • Continued ability to negotiate reduced rent;
  • Continued ability for tenants on pre 6 April 2020 fixed-term tenancies to pay just two weeks rent in advance (all other tenants are already able to do this)

Support measures:

  • A requirement for the ACT Civil and Administrative Tribunal (ACAT) to consider making a payment order instead of an eviction order for COVID-19 impacted household
  • The ability for a tenant from a COVID-19 impacted household who had previous ACAT orders suspended during the moratorium to apply to ACAT to vary or set aside those orders

Northern Territory

Moratorium conditions:

  •  Northern Territory has not enacted the moratorium into their laws

Can landlords still carry out property inspections?

As a property manager or landlord, you can still conduct routine private inspections, however you should ask that your tenant(s) not be present and take extra safety precautions, such as wearing protective gloves, sanitising door handles and surfaces and minimising contact. As always, give your tenant 24 hours’ written notice of your intent to carry out an inspection.

What should you do if your tenant can’t pay their rent due to Covid-19?

Through no fault of our own, we are all impacted by the Corona Crunch to some level. It’s important we support each other, while doing our best to protect our financial security and considering the help available to us. Refrain from putting pressure on your tenant or offering financial advice. The Australian Securities and Investments Commission has warned real estate agents or landlords could face fines and even jail time for offering unlicensed financial advice to tenants struggling to pay their rent amid the COVID-19 crisis. Remember, your tenant is obligated to try and meet their rental payments to the best of their ability, and it’s in your best interest to negotiate a new payment arrangement, so you receive at least part of your rental income.

3 financial relief options available for landlords

Before you begin negotiations with your tenant, it’s worth exploring the help available to you as a landlord.
  • Apply to your bank to have your mortgage repayments deferred (or partially deferred) for six months. Most banks are offering this to support customers facing financial hardship as a result of Covid-19. However, interest and repayments will be added to the length of your loan period. Your bank is likely to want proof of loss of rental income.
  • Confirm whether your landlord insurance covers rental loss due to Covid-19. Under usual circumstances, loss of rent is usually covered by landlord insurance for a certain period, but insurance policies may not provide cover for lost income in this new climate where tenants can no longer be evicted. The good news is, most insurers are standing behind their policies with existing terms and conditions not altered by the pandemic.
  • For newer apartment complexes, you may be covered by a rental guarantee. Check your contract of sale.

Negotiating a payment plan with your tenant

If your tenant has approached you asking for a rent reduction, try to stay calm and remember that you need to work together to establish a plan that will support you both through this period of uncertainty.

Come to an agreement that works for you both

In most states, the moratorium this period is over, and tenants are no longer eligible for rent reduction. In some states, it is expected that they pay back the shortfall in rent. However, as a landlord, you can still negotiate a payment plan with your tenant, considering your own financial pressures and those of your tenant. Try to work out a reasonable compromise based on the answers to these questions:
  • What mortgage relief are you experiencing either from a drop in interest rates or by deferring your loan repayments?
  • Does your landlord insurance cover rental loss?
  • Is your tenant earning or receiving government assistance?

When negotiations fail

During a pandemic, stress levels can be high. It may be that negotiations break down and you and your tenant are unable to reach an agreement for a new rental payment plan. If this is the case, it’s best to seek mediation from your state Rental Authority or Tribunal. Please note, the information in this article is intended to be used as a general guideline only. Before taking any course of action, we recommend you confer with your local real estate institute or fair trading commission.
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