Information for Landlords and Agents impacted by COVID-19

Many members of our community are being impacted by COVID-19 in ways which are causing them to experience financial distress.  As a result, some tenants and landlords are having difficulties meeting their financial agreements.

The ACT Government is making changes to help landlords and private tenants reduce the risks of homelessness and financial hardship during the COVID-19 public health emergency.

These changes include:

  • Applying rebates to your land tax and rates bills if you reduce rent for tenants suffering financial hardship which is directly related to COVID 19; and
  • Stopping you from evicting people who cannot afford to pay their rent.

This fact sheet explains the measures put in place by the ACT Government to assist tenants and landlords who are financially impacted by COVID-19, in order to help you understand your rights and find solutions.

Use ACT law

Residential tenancy laws differ across the States and Territories and our 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. This fact sheet will be updated if the Commonwealth or ACT Governments announce new measures to help tenants and landlords.

Summary of Changes

A range of temporary changes that have been made to the Residential Tenancies Act 1997 to protect tenants impacted by COVID-19 and to assist landlords.

The changes are:

  • a moratorium on evictions for non-payment of rent for COVID-19 impacted households;
  • the ability for landlords, tenants, grantors and occupants to negotiate reduced rent;
  • a relaxation on the time period for non-urgent repairs;
  • a rental increase freeze;
  • restrictions on the way certain inspections should be performed;
  • restrictions on negative listing being made about COVID-19 impacted persons or households on tenancy databases; and
  • the ability for COVID-19 impacted tenants to terminate their fixed-term tenancy agreements early, without penalty.
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The moratorium commenced on 22 April and will be available for six months (to 22 October 2020) consistent with National Cabinet’s announcement.

However, if your tenant fell behind in their rent before 22 April 2020 and you have already issued your tenant with a notice to vacate or if you have had an eviction order or warrant issued against them, they may still be covered by the moratorium if they have not moved out of the property yet (see further below).

All other rights and obligations under residential tenancy and occupancy agreements remain the same.

Moratorium on evictions for non-payment of rent

Households that can demonstrate that they are impacted by the COVID-19 pandemic cannot be evicted because of their failure to pay rent during the moratorium period. At this stage, the moratorium will be available for six months (to 22 October 2020).

If you fell into rent arrears before the commencement of the moratorium period, you may still be covered in certain circumstances (see further below).

Tenants who are not impacted by the COVID-19 pandemic must continue paying rent in full and honour their existing residential tenancy agreement.

For impacted households, during the moratorium period landlords must not:

  • issue a notice to vacate or termination notice because of the tenant’s failure to pay rent;
  • apply to the ACT Civil and Administrative Tribunal (ACAT) for a termination and possession order or a payment order; or
  • apply to ACAT for a warrant for the eviction of a tenant.

Evictions can still occur on other grounds.

Do these changes apply to my tenant?

The moratorium applies to households that can demonstrate they are impacted by COVID-19 in the following ways:

  1. A member of the household became eligible for the JobSeeker or JobKeeper payment from the Commonwealth on or after 20 March 2020 OR
  2. Where the household income (inclusive of any government assistance) has reduced by 25% of more due to:
    1. one or more rent-paying members of the household being impacted by 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
    2. 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 COVID19.

Tenants who have had their income significantly impacted by COVID-19 are encouraged to engage with their landlords or managing agents to discuss alternative payment arrangements.

One option is to offer tenants a rental payment freeze (stop collecting rent) until they have access to some income. Any rent that is not collected during this period would become a debt owed to you.

If your tenant’s household income has not been impacted by COVID-19, the moratorium on rent arrear evictions does not apply to them.

How can my tenant demonstrate that they are impacted by COVID-19?

Tenants may be able to provide some documents to demonstrate that they have been impacted by COVID-19. The sorts of simple evidence that may show they are a COVID-19 impacted household could include, for example:

  • proof of eligibility for JobSeeker or JobKeeper payment;
  • proof of job termination or stand-down such a letter or email from your 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
  • making a statutory declaration.

Landlords should be aware that some tenants, particularly if they have had informal work arrangements, may have difficulty providing some forms of evidence. Statutory declarations should be taken as an acceptable form of evidence. Landlords and tenants are encouraged to work together to resolve any issues.

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

If you have already made an application to evict your tenant due to non-payment of rent and have an upcoming hearing date with the ACT Civil and Administrative Tribunal (ACAT), your tenant can ask that ACAT to delay making a decision on the eviction until the end of the moratorium period if they are COVID-19 impacted.

What if an order has already been made by the ACAT prior to 22 April 2020?

The changes to the law mean that the ACT Civil and Administrative Tribunal (ACAT) may suspend existing orders (made prior to the moratorium period) in relation to a failure to pay rent for a stated period of not more than the moratorium period if:

  • the tenant is a member of an impacted household; and
  • the tenant has not vacated the premises.

The tenant will need to make an application to ACAT to have these orders set aside.

Will my tenant need to pay back any rent they don’t pay during the moratorium period?

Yes. They will still need to pay back any rental arrears. This may be a reduced amount if you have agreed to a reduction in rent.  Your tenant will not be required to repay the difference between the original rent amount and the reduced rent if you did agree to a rent reduction.

Moratorium on rent increases

If your tenant is in a COVID-19 impacted household you will not be able to increase the rent during the moratorium period.

Reduction in rent by mutual agreement

Landlords and tenants may come to an agreement to reduce 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; and
  • Providing a written confirmation of:
    • the agreed reduced rent; and
    • the period the reduced rent applies.

If your tenant is still in financial hardship at the end of the agreed rent reduction you can also agree to extend the rent reduction period if you are in a position to do so.

What is the COVID-19 temporary 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.

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 happens after the period of reduced rent period 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.

Implications for landlords insurance

Some landlords hold landlord insurance policies in relation to rental property which may include protection for loss of income due to a tenant being unable to pay rent. If your tenant qualifies for the moratorium on evictions and is unable to pay rent, you should contact your insurer about your policy coverage and any potential claim.

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

If a household is 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.

Limiting access to premises

Restrictions have been put in place on the ability of landlords and agents to access premises during the COVID-19 emergency to assist in meeting social distancing measures.

These new measures mean that a landlord or agent cannot physically access the premises during the declaration 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.
What about property inspections?

Landlords and agents are encouraged to conduct ‘virtual’ inspections of the premises using audio-visual or other electronic means in order to avoid physically accessing the premises.

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

  • the tenant has already moved out of the property; or
  • the tenant fails to provide reasonable assistance to the landlord or agent to enable the virtual inspection to be done.

If your tenant does not provide reasonable assistance to facilitate virtual inspections, you can apply to the ACT Civil and Administrative Tribunal for an order that access be provided.

Where physical inspections are undertaken, 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 requirements and restrictions on the number of people present.
What do these new measures mean for repairs to property?

Where urgent repairs need to be undertaken at the premises, a landlord or agent is still permitted to physically access the premises.

Where non-urgent repairs need to be undertaken at the 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.

Rates and land tax rebates for landlords

If you choose to reduce your tenant’s rent by at least 25 per cent for up to six months the ACT Government will match 50 per cent of the rent reduction to a maximum of $2,600 over six months (or $100 per week).

For example, if you are renting your property for $600 per week and you reduce the rent by $200 per week, you will receive a total rebate of $2,600 (or $100 per week) over six months.

To benefit from this rebate, it must be a genuine rent reduction without a requirement for the tenant to pay the rent reduction amount back to you in the future. You can not claim the difference from your tenant at a later date.

This support will be backdated and effective from 1 April 2020 for up to six months. The baseline for the 25 per cent rent reduction is the rent payable on the property as at 1 March 2020.

The government’s share of the rent reduction will be provided to you through a rebate on your 2019-20 quarter 4 land tax bill and 2020- 21 quarter 1 bill. If your land tax bills are less than the rebate, the remainder will be applied to your general rates bills for those quarters.

How to apply

To access the rebate, you will complete a simple online application form and provide:

  1. a revised residential tenancy agreement;
  2. written confirmation to the tenant, from you or your managing agent, advising of the temporary rental reduction; and
  3. Your contact details or your managing agent’s contact details.

Significant penalties and clawback provisions will be in place for landlords that provide falsified information or if they do not pass the rental reduction to their tenants.

Other assistance for residential property owners

Other support property owners will automatically receive includes:

  • You will receive your 2019-20 quarter 4 residential general rates instalments and land tax assessments four weeks later than usual, payments will also be due four weeks later;
  • a $150 rebate for all residential rates bills; and
  • the Fire and Emergency Services Levy on 2020-21 residential rates bills will be the same as 2019-20.
How has COVID-19 affected ACT Civil and Administrative Tribunal’s (ACAT) operating procedures?

Tenancy and occupancy disputes (including applications to terminate agreements on the basis of hardship) can be resolved through the ACT Civil and Administrative Tribunal (ACAT). ACAT provides essential services and is still operating, although its capacity may be reduced due to the pandemic. However, ACAT has made changes to its procedures to manage COVID-19 social distancing requirements and to prioritise more urgent matters. These changes include closing the ACAT counter and premises from in-person visits and conducting hearings via teleconference. Most residential tenancy applications, including termination applications, will continue to be listed. There may be delays for non-urgent matters.

Mediation services

The Conflict Resolution Service (CRS) is available to provide a restorative free residential tenancy mediation service. CRS is a long-standing, trusted provider of mediation services in the ACT community. The service aims to resolve rental disputes between tenants and landlords in the ACT who are impacted by COVID-19, including in relation to reaching agreements to reduce rent.

The CRS will work with parties to resolve their dispute through a facilitated discussion, negotiate options and work to agree on a path forward. The CRS will also help to capture in writing the outcome of any agreement between the parties in dispute.

Parties can register to participate in the residential tenancy mediation on the CRS website crs.org.au or by phone on (02) 6189 0590. Further information about what parties need to do to prepare for mediation is also available on the CRS website.

Where can I go for help?

The Small Business Clinic at Legal Aid is a free service that continues to operate at this time between 2pm and 5pm 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.  You can contact them 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.

You can contact the ACT Revenue Office regarding access to the Government’s rates and land tax rebate using the following:

www.revenue.act.gov.au/contact-us

(02) 6207 0028

 

Please note that the effects of the changes discussed in this fact sheet 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.