Information for Landlords and Agents impacted by COVID-19

INFORMATION FOR LANDLORDS AND GRANTORS 

This information is current as of 2 September 2021 and will be updated if the Commonwealth Government or the ACT Government announce new measures or changes. Residential tenancy laws differ across the States and Territories and COVID-19 response measures are also based on local circumstances. You should always make sure the information you are relying on relates to the ACT. Please note that the effects of the changes discussed below will depend upon the circumstances of the individual residential tenancy agreement (including whether it is for a fixed term or periodic). You may wish to seek legal advice about your individual circumstances.

The present COVID-19 situation in the ACT is impacting individuals and households in our community in a number of ways. The ACT Government recognises that some of the lockdown requirements are causing financial distress and that a growing number of people are subject to directions to quarantine for periods of time in their homes. As a result, some tenants and landlords are having difficulties meeting their financial agreements or are uncertain about their rights during the COVID-19 public health emergency.

The ACT Government has taken steps to help reduce the risks of homelessness and financial hardship during the COVID-19 public health emergency.

This information explains the residential tenancy response measures put in place by the ACT Government to assist tenants who are financially impacted by COVID-19 or are subject to quarantine directions.
Further information for tenants can be found here.

 

Do the COVID-19 emergency response measures change any of my rights or obligations?

As part of the emergency response measures, a number of temporary changes to the Residential Tenancies Act 1997 (the Act) have been introduced with the commencement of the Residential Tenancies (COVID-19 Emergency Response) Declaration 2021 (No 3) (the declaration) on 2 September 2021. 

The declaration has introduced temporary measures to protect households that have been identified as being impacted physically or financially by COVID-19 including:

  • a 12 week moratorium on evictions for non-payment of rent where tenants are a COVID-19 impacted household;
  • protection for households subject to a public health direction to quarantine or self-isolate from being required to leave their home during the quarantine period; 
  • a relaxation on the time period for non-urgent repairs;
  • a rental increase freeze for COVID-19 impacted households;
  • restrictions on physically accessing rental premises and alterations to the way inspections should be performed; 
  • restrictions on COVID-19 impacted tenants and impacted households being added to tenancy databases;
  • the ability for impacted households to end a fixed term tenancy early and without penalty by providing 3 weeks’ notice and evidence that they are so impacted;
  • allowing tenants from impacted households who have had a termination and possession order made against them or a warrant for eviction issued, but who are still in their rental premises, to apply for the orders to be suspended during the moratorium period;
  • allowing tenants from impacted households who had a termination and possession order suspended or warrant stayed during the moratorium period to apply to the ACT Civil and Administrative Tribunal (ACAT) to reconsider those orders at the end of the moratorium period in certain circumstances; 
  • a 12 week transitional period following the moratorium period which prevents evictions on the basis of debt accrued during the moratorium where rent is being paid when it falls due during the transition period; 
  • the ability for landlords, tenants, grantors and occupants to negotiate reduced rent or occupancy fees or a deferral of rent payments;
  • a requirement for ACAT to consider making a payment order (a type of repayment plan) instead of an eviction order where a termination order is sought against an impacted household where they are not still protected by the eviction moratorium. 

To date, all other rights and obligations under residential tenancy and occupancy agreements remain the same.

Can a tenant be evicted from their household if they are subject to a public health direction to quarantine or self-isolate?

No. If a tenant, or any member of their household, is directed to quarantine or self-isolate under a public health direction and a notice to vacate has been issued, that takes effect during the quarantine period, the tenant is not required to vacate the premises during their quarantine period. 

When the quarantine period ends, the tenant may nominate a day they will vacate the property not more than two weeks after the quarantine period ends. If the tenant does not nominate a day themselves, they must vacate on the day 2 weeks after the day the quarantine period ends unless otherwise agreed with the lessor. 

If a tenant has issued a notice of intention to vacate and they are subject to a quarantine or self-isolation direction on their intended date of leaving the premises they can withdraw their notice of intention and issue a new notice of intention to vacate.

Tenants still have obligations to continue paying rent during this period. 

If ACAT has made a termination order or issue a warrant for eviction and the tenant, or any member of their household, is directed to quarantine, the tenant may apply to the ACAT to suspend the termination order or stay the warrant to ensure they can comply with the direction to quarantine. ACAT can suspend an order or stay a warrant for up to 2 weeks after the end of the quarantine period.

When is a household impacted by the COVID-19 pandemic?

A household is COVID-19 impacted if:

  • one or more rent-paying members of a household have lost income (or had a reduction in income) due to measures taken by any State, Territory or the Commonwealth in response to the COVID-19 pandemic (for example, COVID-19 business closures or stand-downs); or
  • one or more rent-paying members of a household have had to stop working or reduce work hours due to illness with COVID-19 or to care for a family member who is ill with COVID-19; and
  • on or after 12 August 2021:
    • the household’s or individual household member’s gross weekly income is 20% less than their income before it was stopped or reduced; or
    • a rent-paying household member has lost 8 hours of work or more.

Alternatively, a household is also impacted if a member of the household became eligible for the Commonwealth Disaster Payment or the ACT Government Small Business Grant on or after 12 August 2021. 

The moratorium on evictions and certain other protections only apply to households that can demonstrate they are impacted by COVID-19.

What is the moratorium on evictions for rental arrears?

The moratorium on evictions applies to households that can demonstrate they are impacted by COVID-19. These households cannot be evicted because of their failure to pay rent during the moratorium period (12 weeks – unless extended). 

Tenants who are not considered a household impacted by the COVID-19 pandemic can have their residential tenancy agreement terminated for failure to pay rent. 

For impacted households, during the moratorium period landlords must not

  • give a tenant in the impacted household a Notice to Vacate or termination notice because of the tenant’s failure to pay rent;
  • apply for a termination and possession order or a payment order under sections 49, 49A and 49B of the Act; or
  • apply for a warrant for the eviction of a tenant under section 41 of the Act.

Please be aware, evictions can still occur on other grounds.

It is important to note that even if the moratorium on rental arrears evictions applies to a tenant, that does not mean that the tenant does not have a legal obligation to pay the rent during that period. The tenant cannot be evicted during the moratorium period, but they will still legally owe the full amount of their rental arrears to their landlord, unless both the tenant and the landlord have agreed to a lesser amount.

Will the moratorium on eviction for rental arrears period be extended?

The moratorium period is currently 12 weeks. If the health and safety measures and public health directions currently in place for COVID-19 need to continue for a longer period, the Attorney-General may decide to extend the moratorium period.

Are there any restrictions on rent increases for households impacted by the COVID-19 pandemic?

If a household is impacted by the COVID-19 pandemic as defined, landlords must not increase the amount of rent payable under the residential tenancy agreement during the moratorium period.  This does not apply to rent where the amount of rent paid is based on the tenant’s income (for example, if the tenant is in a social housing property and the rent they pay is calculated as a percentage of their income).

Are there any restrictions on listings in tenancy databases for households impacted by COVID-19?

If a household has been deemed to be impacted by the COVID-19 pandemic, information about a tenant’s breach of a residential tenancy agreement during the moratorium period must not be published in a residential tenancy database if the breach relates to a failure to pay rent under the agreement. 

This restriction remains after the end of the moratorium period if the tenant remains in arrears for rent payable during the moratorium period.

Rent reductions or deferrals by mutual agreement

Landlords and tenants may come to an agreement to reduce or defer rent if the tenant is suffering from financial hardship due to the COVID-19 pandemic.

The mutual agreement can be given effect by:

  • Including a COVID-19 temporary rent reduction clause in the residential tenancy agreement (please see further detail on this clause below); OR
  • Including a COVID-19 temporary rent deferral clause in the residential tenancy agreement (please see further detail on this clause below); 

and

  • Providing a written confirmation of:
    • the agreed reduced rent; and 
    • the period the reduced rent applies.
What is the COVID-19 rent reduction clause?

The COVID-19 temporary rent reduction clause is an optional additional standard term that tenants and landlords may choose to include that amends their existing tenancy agreement to give effect to an agreed rent reduction.  If you and your tenant voluntarily agree to include a rent reduction clause in your existing agreement it is taken to be a COVID-19 temporary rent reduction clause

The COVID-19 temporary rent reduction clause provides:

  1. The parties agree that because of financial hardship suffered by the tenant arising from the COVID-19 pandemic, for the period stated in writing by the parties the rent payable under the agreement is reduced to an amount stated in writing by the parties. 
    Note: Writing includes any way of representing or reproducing words in visible form including email or text message (see Legislation Act, dict, pt 1, def of writing).
  2. The parties may, in writing, extend the period in which rent is reduced for a further stated period if the tenant continues to suffer financial hardship because of the COVID-19 pandemic.
What is the COVID-19 rent deferral clause?

The COVID-19 temporary rent deferral clause is an optional additional standard term that tenants and landlords may choose to include that amends their existing tenancy agreement to give effect to an agreed rent deferral. 

If the rent deferral clause is included in a form other than in the form set out below, the clause will be taken to be a COVID-19 rent reduction clause. This is intended to provide certainty to both parties as to whether rent deferral or rent reduction is agreed. 

The COVID-19 rent deferral clause provides:

  1. The parties agree that because of financial hardship suffered by the tenant arising from the COVID-19 pandemic, for the period stated in writing by the parties the rent payable under the agreement is deferred for the period and for the amount stated in writing by the parties.
    Note: Writing includes any way of representing or reproducing words in visible form including email or text message (see Legislation Act, dict, pt 1, def of writing). 
  2. The parties may, in writing, extend the period in which rent is deferred for a further stated period if the tenant continues to suffer financial hardship because of the COVID-19 pandemic. 
  3. The parties agree that at the end of the period in which the rent is deferred, the amount of deferred rent is payable to the lessor in accordance with— 
    1. the arrangements agreed between the parties; or 
    2. if the parties cannot agree—the terms decided by the ACAT taking into account what is reasonable for both parties.
Are landlords required to agree to a rent reduction or deferral?

No. Landlords and tenants can come to an agreement about reducing or deferring rent, but they are not required to do so. Where a rent deferral clause is voluntarily agreed to be included in your existing agreement it must be in the form set out by the COVID-19 rent deferral clause or it will be taken to be a rent reduction and not a deferral.  This is intended to provide certainty to both parties as to whether rent deferral or rent reduction is agreed. If you and your tenant voluntarily agree to include a rent reduction clause in your existing agreement it is taken to be a COVID-19 temporary rent reduction clause.

What happens after the period of reduced rent ends?

Landlords and tenants may extend the period by agreeing to the extension in writing if the tenant continues to suffer from financial hardship due to the COVID-19 pandemic.

If the reduced rent period is not extended, the rent payable reverts to the amount stated in the residential tenancy agreement. This reversion is not an increase in rent for the purposes of the Act. This means that the rent can return to its pre-COVID-19 amount without it counting towards the requirement that rents only be increased at intervals of more than 12 months or that the rent increases be limited to a prescribed amount or without the landlord needing to issue a notice that the rent will increase.  The reduced rent amount that was agreed to will not be rent arrears or a debt owed to the lessor.

What happens after the period of deferred rent ends?

Landlords and tenants may extend the period by agreeing to the extension in writing if the tenant continues to suffer from financial hardship due to the COVID-19 pandemic.

If the deferred rent period is not extended, the rent payable will revert to the amount stated in the residential tenancy agreement. This reversion is not an increase in rent for the purposes of the Act. This means that the rent can return to its pre-COVID-19 amount without it counting towards the requirement that rents only be increased at intervals of more than 12 months or that the rent increases be limited to a prescribed amount and the landlord is not required to issue a notice that the rent will increase. The amount of the deferred rent is arrears and therefore a debt that is owed to the lessor. Parties are encouraged to agree to a payment plan in relation to the deferred debt.  Where they are unable to agree they can apply to ACAT and ACAT can decide the repayment terms taking into account what is reasonable for both parties. 

Reduction in occupancy fees by mutual agreement

Parties to an occupancy agreement may also agree to reduce occupancy fees for a specified period if an occupier suffers from financial hardship arising from the COVID-19 pandemic.

The mutual agreement should specify the amount and duration of the fee reduction and be recorded in writing. Grantors and occupants may extend the period by agreeing to the extension if the occupier continues to suffer from financial hardship due to the COVID-19 pandemic.

If the period is not extended, the fee payable under the occupancy agreement reverts to the amount immediately before the fee was reduced. This reversion is not an increase in fee and the grantor does not need to issue a notice that the fee will return to its previous rate.

What if I already have an ACAT hearing date for a rent arrears eviction?

If you have already made an application for a termination and possession order because your tenant is behind in rent and you have been given an ACAT hearing date, you should still attend the hearing (or dial in, if it is being held via teleconference). If your tenant is in a COVID-19 impacted household, they may ask that the ACT Civil and Administrative Tribunal (ACAT) delay deciding on the eviction until the end of the moratorium period.

After the moratorium period has ended your matter may be relisted. However, if your tenants are in a COVID-19 impacted household during the moratorium, ACAT will be required to consider making a payment order (which is a type of repayment plan) before they can make a termination and possession order (see further information on payment orders below).

What if an order has already been made by the ACAT before the moratorium commenced?

During the moratorium period, the ACT Civil and Administrative Tribunal (ACAT) may suspend existing orders (made before the moratorium period) (pre-moratorium orders) in relation to a failure to pay rent for a stated period of not more than the moratorium period if:

  • the tenant was a member of an impacted household; 
  • the tenant had not vacated the premises; and
  • the tenant applied to have the order suspended.

If your tenant is in this situation, they will need to make an application to ACAT to have the orders suspended. 

After the end of the moratorium period, ACAT may vary or set aside pre-moratorium orders that were suspended during the moratorium if satisfied that, since the order was made, the tenant has paid part or all of the rent arrears (or the tenant can otherwise demonstrate that their financial circumstances have improved) and the tenant is reasonably likely to pay future rent as it becomes payable.

If your tenant is in this situation, they will need to make an application to ACAT to have the orders varied or set aside.

My tenants are in an impacted household and want to end their tenancy early, can they do this?

Some tenants may wish to terminate their agreements if they have alternative housing options available. Any tenancy can be ended at any time by agreement between the landlord and tenant. If you cannot agree, your tenant’s rights in relation to ending the tenancy will vary depending on whether you are in a fixed-term or periodic tenancy.

Terminating a periodic tenancy

If your tenant is on a periodic tenancy, they can terminate the agreement at any time (regardless of whether they are COVID-19 impacted) by giving you at least 3 weeks written notice of their intention to vacate. The tenancy will end on the date specified (assuming that date is at least 3 weeks after the notice is provided).

Your tenant will not have to pay any compensation to you if they decide to end a periodic tenancy.  However, if they are in rental arrears, at the time they terminate the agreement they will still owe this money to you.

You will need to go through the end of lease procedures in relation to an end of lease condition report and bond. Speak to your tenant about how this can be done in a way that complies with any social distancing requirements and any public health directions that are in force.

Terminating a fixed term tenancy

If your tenant is in a COVID-19 impacted household, they can give you 3 weeks written notice to end the fixed term tenancy early. They will also need to provide you with evidence that they are a COVID-19 impacted household. Evidence could include:

  • proof of eligibility for the Commonwealth COVID-19 Disaster Payment or ACT Business Support Grant;
  • proof of job termination or stand-down such a letter or email from their employer;
  • proof of loss of work hours such as rosters showing a reduction in hours;
  • proof of prior and current income in a bank statement or payroll; or 
  • a statutory declaration which sets out how they have been impacted.

You will not be able to charge you a ‘break-lease’ fee if they terminate the agreement in these circumstances. However, if they are in rental arrears at the time the tenancy is terminated they will still owe this money to you.

You will need to go through the usual end of lease procedures in relation to an end of lease condition report and bond. Speak to your tenant about how this can be done in a way that complies with any social distancing requirements and any public health.

Limiting access to premises

In all tenancies, restrictions on the ability of landlords and agents to access premises during the COVID-19 emergency have been put in place to assist in meeting social distancing requirements.

These measures mean that a landlord or agent cannot physically access any rental premises during the moratorium period unless:

  • they have the tenant’s consent; or
  • it is necessary to do urgent repairs to the premises; or
  • it is in accordance with an order by the ACT Civil and Administrative Tribunal.

These measures will remain in place during the moratorium.  After that time, the usual rules under the Residential Tenancies Act 1997 will apply.

What about property inspections?

In all tenancies, landlords and agents are encouraged to conduct ‘virtual’ inspections of the premises using audio-visual or other electronic means to avoid physically accessing the premises during the moratorium period.

Where a tenant does not consent, a landlord or agent is prevented from physically accessing any rental premises to undertake an inspection unless:

  • the tenant has already moved out of the property; or
  • the tenant has the audio-visual technology to facilitate the inspection but unreasonably fails to provide assistance to you or your agent to enable the virtual inspection to be done.

If your tenant unreasonably fails to provide assistance to facilitate virtual inspections, you can apply to the ACAT for an order that access be provided (see further information below).

Before conducting any physical inspections any public health directions that are in place should be considered and complied with. Where physical inspections are undertaken (and where public health directions permit), steps to protect the health and safety of the tenants and people visiting during an inspection should be considered. For example, landlords or agents may need to:

  • provide sanitiser or hand wash for people attending an inspection;
  • as far as practicable, ensure no one touches anything during the inspection;
  • if necessary, disinfect doorknobs or other surfaces where touching is required after the inspection has been finalised;
  • comply with distancing and requirements and restrictions on the number of people present.

These measures will remain in place during the moratorium period. After that time the usual rules in relation to inspections under the Residential Tenancies Act 1997 will apply.

What do these measures mean for repairs to property?

In all tenancies, where urgent repairs need to be undertaken at the premises, a landlord or agent is still permitted to physically access the premises (if public health directions allow).

Clause 60 of the standard residential tenancy terms outlines what constitutes urgent repairs. This includes, for example, repairs to a burst water service, a dangerous electrical fault or a gas leak.

Where non-urgent repairs need to be undertaken at any rental premises, this repair must be undertaken within a reasonable period as agreed to between the landlord or agent and tenant.

In deciding what is a reasonable period, the landlord or agent and tenant must have regard to the nature of the repair, the extent of access required to the premises to do the repair, and the hardship suffered by the tenant by the repairs not being done.

Where repairs are undertaken, landlords and tenants both need to be aware that it may be difficult to source tradespeople at this particular time. Tenants, landlords and tradespeople may also need to discuss how best to manage social distancing requirements while any work is undertaken.

This measure will operate during the moratorium period. After the moratorium is over, the usual rules under the Residential Tenancies Act 1997 will apply (subject to public health directions) and non-urgent repairs will need to be completed within 4 weeks of the landlord being notified of their need.

What is a payment order and when can ACAT make one?

A payment order is an order that the ACT Civil and Administrative Tribunal (ACAT) can make instead of making a termination and possession order (an eviction order) when the landlord has applied to ACAT to end the tenancy on the basis of rent arrears.  A payment order allows a tenancy to continue and is an order that the tenant pay their rent plus a specified amount towards the arrears.  In other words, it gives the tenant another chance to save their tenancy.

Before making a payment order, ACAT must be satisfied that the tenant will be reasonably likely to make the payments required under the payment order.

If your tenant breaches a payment order (by failing to pay their rent and any arrears amount specified in the order) you can apply to ACAT to have your tenancy terminated. You do not need to serve them with a new notice to vacate before you make this application.

How has COVID-19 affected ACT Civil and Administrative Tribunal’s (ACAT) operating procedures?

As the ACT Civil and Administrative Tribunal (ACAT) provides essential services, it is operating at this time. However, its capacity may currently be reduced due to the pandemic. ACAT continues to hear urgent occupancy and residential tenancy matters (including applications for termination and possession orders). 
 
For details about the arrangements ACAT has in place during the COVID-19 emergency response, please see https://www.acat.act.gov.au/what-to-expect/changes-due-to-covid-19 . You can contact ACAT by email on tribunal@act.gov.au or by phone on (02) 6207 1740.

What support will be in place for tenants after the moratorium has ended?

The ACT Government has put in place measures to continue to support tenants to provide a smooth transition out of the moratorium.

These measures are:

  • a transition period which limits evictions on the basis of rent arrears for COVID-19 impacted households in certain circumstances;
  • the continued ability to negotiate reduced or deferred rent or reduced occupancy fees;
  • 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 continued ability for a tenant in a COVID-19 impacted household to terminate their fixed-term tenancy agreement early and without penalty;
  • continued restrictions on a negative listing being made about a person from a COVID-19 impacted household on tenancy databases; and
  • 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.

These measures will be in place after the eviction moratorium has ended.

What is the transition period?

The transition or grace period provides a longer period to tenants to repay rent arrears accrued during the moratorium period before facing eviction.

The transition period will be in place for twelve weeks beginning from the end of the moratorium period (unless extended). 

If your tenant is in a COVID-19 impacted household and is in rent arrears at the end of the moratorium period, you will not be able to evict your tenant on the basis of those arrears during the transition period so long as your tenant pays their rent as it falls due throughout the transition period.

Does the Transition Period apply to your tenant?

The transition period applies to households that can demonstrate that they were impacted by COVID-19 and who accrued rent arrears during the moratorium period.

What happens if your tenant doesn’t pay their rent during the transition period?

If your tenant does not pay their rent as it falls due during the transition period, then you will be able to take the usual steps under the Residential Tenancies Act 1997 to end your tenancy. However, if you apply to the ACT Civil and Administrative Tribunal (ACAT) for a termination and possession order and your tenant is in an COVID-19 impacted household, ACAT must consider making a payment order before they make a termination and possession order on the basis of the rent arrears (see further below).

Your tenant applied to have a termination order or warrant suspended during the moratorium – what happens at the end of the moratorium?

At the end of the moratorium, ACAT may vary or set aside pre-moratorium orders if it is satisfied that, since the order was made, the tenant has paid part or all of the rent arrears (or the tenant can otherwise demonstrate that their financial circumstances have improved) and the tenant is reasonably likely to pay future rent as it becomes payable.

If your tenant is in this situation, they will need to make an application to ACAT to have the orders varied or set aside before the orders come into effect.

Where can I go for help?

Advice for Landlords

The Small Business Clinic at Legal Aid ACT is a free service that continues to operate at this time between 2pm and 5pm by telephone appointment only every Thursday. It provides small business operators with free information and advice regarding their business. This service may be able to provide advice to landlords.  To book an appointment, you can contact the Legal Aid ACT Helpline on 1300 654 314 or find out more information on their website: https://www.legalaidact.org.au/contact-legal-aid.

Landlords may need to seek private legal advice if in doubt about their rights and obligations.

Relevant Legislation

To access the relevant legislation, click on the links below:

Residential Tenancies Act 1997

Residential Tenancies (COVID-19 Emergency Response) Declaration 2021 (No 3)