Support for residential tenants during COVID-19

By Mark Rosanes | 15 May 2020

The COVID-19 pandemic has hit the economy hard and the number of Australians furloughed or laid-off from their jobs has reached the hundreds of thousands. Fortunately, tenants concerned about meeting their housing expenses during these tough times have several options.

Workers across Australia have taken the brunt of the economic impact from the COVID-19 pandemic. As social distancing measures were imposed, many workers were pushed out of jobs or had their hours reduced, significantly cutting their incomes. Without a stable source of livelihood, paying for daily expenses – including rent – has become a struggle for many Australians.

Prime Minister Scott Morrison’s announcement of a six-month moratorium on evictions last March was welcome news to tenants experiencing financial hardships. But without consistent national guidelines on how this will be implemented, states and territories bore the responsibility of setting the details. 

This has resulted in confusion among both residential tenants and their landlords as they are now dealing with different sets of legislation and financial support depending on where they reside.

Recently, Your Investment Property listed the various relief packages states and territories have enacted in support of residential landlords. Here’s how different jurisdictions are providing support for tenants.

New South Wales

Half of NSW’s $440m relief package  has been allocated to residential tenants and landlords. The package aims to keep tenants in their residences over the next six months.

In mid-April, the government has also imposed a 60-day moratorium on new applications for forced evictions due to rental arrears if a person in the house has suffered financial hardship due to the outbreak, meaning there was a reduction of 25% or more in household income.

Legislation for a six-month restriction on evictions followed shortly, with the state government insisting that landlords begin negotiations with tenants who are struggling to make rental payments.

Dispute resolution may also be provided by NSW Fair Trading. Unpaid rent accrues as arrears during the six-month period, but tenants will not be blacklisted.

Queensland

Queensland has implemented a six-month moratorium on evictions due to rent arrears caused by the COVID-19 pandemic. Landlords are also prohibited from evicting a tenant if his or her lease expires during the crisis.

The state government will also give one-off payments of up to four weeks rent, maximum of $2,000, for renters who do not have access or ineligible to other financial assistance schemes. Assistance will also be provided for tenants with $10,000 or less in savings.

Victoria

Evictions and rent increases on residential tenancies have been banned in Victoria for six months.

The state government has also released an $80m assistance fund dedicated solely to tenants in hardship. Renters can apply for grants up to $2,000, provided they have gone through mediation or registered their revised agreement with their landlords, and have less than $5,000 in savings. However, tenants are still required to pay at least 30% of their income in rent.

Western Australia

After introducing legislation for a six-month moratorium on evictions and freeze on rent increases, the WA government released a $30m relief package to support tenants during the crisis.

The residential relief grants, which are equivalent to four weeks’ rent up to a maximum of $2,000, will be paid directly to the landlords. The amount will be provided in addition to rental reductions negotiated between tenants and landlords.

To be eligible, tenants should have lost their job, applied to Centrelink for income support, have less than $10,000 in savings and are paying at least 25% of their income in rent.

South Australia

South Australia has legislated a six-month moratorium on eviction for non-payment of rent due to financial hardship and a ban rent increases. In addition, tenants cannot be blacklisted because of circumstances caused by the pandemic.

The government also has released a $50m tax relief package for residential and commercial landlords, modelled on similar packages in NSW and Victoria.

Under the emergency scheme, landlords will be offered a 25% reduction on their 2019-20 land tax liability on affected properties but would be required to pass on the full benefit of the tax relief to their tenants impacted by COVID-19 restrictions.

Tasmania

Tenants who lost their jobs because of the COVID-19 pandemic cannot be evicted for non-payment of rent until 30 June. The state government will review this measure after 90 days and may decide on an extension.

Australian Capital Territory

The ACT government has enacted a six-month moratorium on evictions and rental increases, and prevention of blacklisting of residential tenants unable to pay rent due to the crisis.

Renters and property owners are encouraged to reach an agreement to delay rental payments if a tenant is not earning income. Any outstanding rent during the moratorium period will be considered tenants’ debt to their landlords but should be free of interest.

Northern Territory

The NT government has opted against a moratorium on evictions, and instead implemented an extension on negotiating and notice periods between tenants and landlords.

Under the measure, tenants having difficulty paying their rent are given an up to 60-day extension from the current 14-day period to negotiate terms with their landlords. Once the extension ends and the landlord and tenant fail to reach an agreement, a notice period of up to 60 days raised from current 14 days may be imposed by the landlord.  

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