It’s fair to say that the outbreak of COVID-19 sees us living in times like we never have before, and for many amongst us, this is causing extreme stress. Nobody is living without change, but for some, the flow-on effects are far more extreme than others, with the loss of incomes and jobs now more pronounced than ever. As a company, Noel Jones is committed to assisting tenants and landlords in sailing these unchartered waters as smoothly as possible.
With 29% of Victoria’s population living in rental accommodation, this has left a generous proportion of our community in a vulnerable position; something that was recognised by both our federal and state governments who have implemented measures for those who need the additional assistance, and a level of security in this unprecedented time. This also includes measures to assist landlords who are not immune to the financial ramifications of COVID-19, something that has been acknowledged by our government. Many of them are feeling the impacts of financial stress as well; a case made worse by the reliance that a large proportion of them have on rental income to meet their own monetary commitments.
On 29th March 2020, a number of new ‘temporary laws’ were introduced to protect Victorian landlords and tenants from the impacts being experienced by the pandemic. These laws will remain in place for the next six months; this has also seen the postponement of the Residential Tenancies Amendment Act 2018, which will now be introduced on the 1st January 2021.
These rules cover a range of topics including a moratorium on evictions, suspension of rental increases and a new dispute resolution process.
You can find further information at www.consumer.vic.gov.au/resources-and-tools/advice-in-a-disaster/coronavirus-covid19-and-your-rights however, below are a few key points.
Key points for landlords:
- If you are a landlord of a residential property, the operator of a rooming house, the owner of a caravan park, or a provider of specialist disability accommodation, then these new laws apply to you.
- You cannot evict the tenant for non-payment of rent unless you can establish that the non-payment is wilful. This may include a ‘rent strike’, or not paying rent when they haven’t experienced financial hardship.
- If you are suffering financial hardship as a result of COVID-19 or your tenant’s inability to meet their commitments in full, you should contact your insurance and mortgage providers to determine what assistance is available to you.
Key points for tenants:
- If your landlord served you a notice to vacate after the 29th March, it does not apply. There are, however, some circumstances in which a landlord can apply to VCAT to terminate your tenancy. These include but are not limited to; if you damage the property, use it for criminal activity, if serious violence occurs, or if the landlord wants to sell or move back into their property.
- If you are unable to pay your rent due to circumstances caused by COVID-19, your landlord must not blacklist you on a residential tenancy database.
- Your rent cannot be increased in the six months following 29th March 2020; however, after this time, your landlord can increase your rent, as long as it’s within the terms of your lease agreement and the Residential Tenancies Act.
On 15th April, the Andrews government announced a $500 million plan for Victorian landlords and tenants to help ease some of the financial burdens in the sector. This plan has been put in place to support the temporary laws that were introduced on 29th March.
Under the package, $80 million has been set aside for tenants in rental stress, and a further $420 million will be spent on land tax reductions for landlords of commercial or residential properties.
For landlords to qualify:
To be eligible for a 25% discount on land tax reductions, and the ability to defer payments until March 2021 on any remaining land tax, domestic landlords need to prove they have negotiated a rent reduction agreement with their tenants, whilst commercial landlords must show a turnover of less than $50 million per year.
See further information at the following link: https://www.sro.vic.gov.au/coronavirus
For tenants to qualify:
Under the scheme, eligible tenants will receive up to $2000 in relief payments. To qualify for these payments, however, tenants must prove they are in rental distress and that they’re paying more than 30% of their wage or current entitlements on rent; they must also have less than $5000 in savings in the bank. This payment is paid directly to the landlord of the property, not to the tenant.
See further information at the following link: To learn more about the rent relief grant and check your availability visit this site: housing.vic.gov.au/help-renting/rentrelief
If you are not eligible for the above, you may be eligible for Commonwealth Rent Assistance through Centrelink and you should contact them to enquire.
Both of the financial assistance schemes rely heavily on the landlord and the tenant first trying to reach a solution that is agreeable to both. Your Noel Jones Property Manager will be more than happy to assist you with the facilitation of such discussions.
This can be done in a number of ways however having both parties communicating directly may see you reach an agreement more easily. If a property manager or estate agent is negotiating on your behalf, they should act in the same manner and be transparent in their role as agent between both the landlord and the tenant.
All negotiations should be carried out in good faith; there is a high level of trust required in situations of this nature. This means:
- All parties should negotiate with the intention of reaching an agreement
- Both parties should try to understand the others situation and point of view
- Showing a level of flexibility where you can
- Taking all relevant information into account
- Not making assumptions about the other party’s position (this is particularly dangerous)
- Engaging freely in discussion and listening to what the other party is saying
At this point it is hoped that there can be an agreement reached, either relating to a lower rent, or another alternative seen as reasonable by both parties. Assuming an adequate solution is reached, it’s imperative that details are registered with Consumer Affairs Victoria so that everyone is clear on the details of the agreement.
Consumer Affairs Victoria state that they are not prescriptive about the form an agreement should take, however it should include the following key elements:
- name of landlord
- name of tenant
- property address
- rent pre-agreement
- rent for the period of the agreement
- time period agreement will be in place
- any other relevant information
In the unlikely event that you cannot come to a suitable agreement, you should contact Consumer Affairs Victoria who can assist you.
More than ever, this is a time that parties need to work together, showing empathy and compassion while finding solutions that allow everyone to move forward in the best way possible. It won’t necessarily be easy, but rest assured that your trusted property manager and the staff at Noel Jones are here to assist you in any way that we can.
** Rental accommodation figure taken from savings.com.au in August 2019