On 15 April 2020, the Residential Tenancies (COVID19) Regulation 2020 came into force. This is the Government’s reaction to the COVID19 virus to protect tenants who have lost their job. This law will remain in place until 15 October 2020.
It is a fair and equitable approach to the disaster. It can be considered that the legislation does two things:-
- It sets out who should be protected; and
- It sets out the type of protection.
The legislation is there to protect a “impacted tenant”. It does not protect those who are retarded in paying their rent or who has damaged the property. It is only set out there to protect those who are impacted by the COVID19 virus.
This legislation for the first time moves away from the concept of tenant. It deals with all persons in the household who contribute to the payment of the rent.
The household is protected where:
- A person is affected by losing their job due to the COVID19, their hours have been reduced due to COVID19 or they or somebody they care for has COVID19; and
- The household income has been reduced by 25% (which includes any Government allowance).
In short, this Act provides no protection unless a household can prove that they have lost 25% of their income due to the COVID19 virus.
The protection given to tenants is that the landlord or agent cannot;
- Terminate the lease;
- Make an application to NCAT to terminate the lease; or
- Make an application to NCAT for the payment of arrears.
The Act also applies a logical approach to the tenant who thinks this is a free kick. The change to the legislation does not allow a person to just not pay rent, it requires the tenant and the landlord to enter into negotiations. If negotiations cannot be successful, an application can be made under the dispute provision to Fair Trading to seek mediation.
If a tenant does not want to participate in mediation, the Act permits a 14 day termination notice to be issued after the 14 June where the tenant has not participated and the landlord has made offers in good faith.
In simple terms, a tenant has to:-
- Prove they were impacted by COVID;
- Negotiate a fair response; and
- Where negotiation does not occur, Fair Trading can step in as the mediator; and
- If Mediation is ineffective, the tenant can still be terminated in 14 days after 14 June 2020.
Leverage has produced a tool kit setting out a range of strategies with a complete turnkey operation for COVICD19. This tool kit sets out the mechanisms for management of tenants who are impacted by COVID19. It provides draft letters and correspondence and a strategy to deal with such operations. We would encourage persons to take advantage of this tool kit.
The COVID-19 Tenancy Toolkit
This COVID-19 toolkit contains a copy of the RTR, which all property managers should take the time to read, including:
- Residential Tenancies Amendment (COVID-19) Regulation 2020
- OFT Complaints Form for Tenancy
- Deed of Variation
- Rent Relief Questionnaire
- Template Letter to Tenant
- Template Letter to Landlord
- Template Letter of Acceptance
- Template Letter of Refusal