Analysis
Posted
Australia's 8 million residential renters remain in
limbo as governments sew together a meagre patchwork of laws that leave
both tenants and landlords with questions and growing problems.
Despite Prime Minister Scott Morrison declaring a six-month "eviction ban" in late March, it's merely a slogan until each state and territory parliament passes bills to make it law. Fewer than half have.Tenants in financial trouble are urged to negotiate a rent reduction with their landlords, but there's no Plan B for if the landlord refuses.
"There are no incentives for landlords to negotiate," said Tamara Spence, managing solicitor of Darwin Community Legal Service.
"Tenants are already vulnerable and there is a distinct power imbalance, so landlords are not likely to concede in a negotiation".
Evictions are still underway around the nation, in some cases sped up as agents rush to boot tenants before stronger protections are enacted into state and territory law.
"Tenants in the Northern Territory are being evicted now," Ms Spence said.
"Nothing has changed despite [tenants] thinking that it has changed, so they are confused and terrified of eviction.
"This is a public health issue and it serves no-one to have tenants on the street homeless and empty properties for landlords."
The National Cabinet composed of the Prime Minister, Premiers and Chief Ministers, delayed six times a decision on how to deal with the one-in-three Australians who rent their homes. Last week, it finally handpassed the issue to state and territory governments.
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The 'Big Four' banks that underwrite the bulk of Australia's mortgages have agreed to 'pause' repayments for up to six months, which should give landlords breathing space if their tenants are unable to pay. And most states have banned evictions for the next six months, if tenants have lost income because of the public health measures around the virus.
But Benedict Bartl, acting principal solicitor for the Tenants' Union of Tasmania, said there's no solution for a massive sting in September.
"The problem in Tasmania with the Government is similar to that around the nation, it's passed the buck," he said.
"In three months, six months down the track when all these tenants have accrued thousands of dollars in rental arrears … what's the plan to sort out that?"New South Wales' new protections seek to balance the interests of renters with landlords who require payments to cover mortgages, rates, costs and to provide an income. A landlord must negotiate a rent reduction with the tenant "in good faith" and can only seek to evict someone after 60 days if it is "fair and reasonable" in the circumstances.
Minister for Better Regulation Kevin Anderson, who covers housing issues, said the new regulation would help keep the system working, for both sides of the equation.
"Together these will help ensure tenants are able to stay in their homes during this key period of social isolation," he said in a statement.
"Given the number of new rental property listings [in NSW] has increased by close to 20 per cent in the last fortnight, there is a strong incentive for landlords to keep existing tenants, rather than risk trying to find a new tenant in the current environment."
Some agents and landlords are evicting renters who've lost their income in the crisis, but using a different excuse to skirt the protections now enshrined in regulation.
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Tenants are being told they are to be evicted under the reason of "any grounds". Some agents are suggesting landlords want to repossess or sell the property, even if there is no evidence of either action.
Mr Anderson said the new laws are meant to push landlords and tenants to work together through the extraordinary period. For example, if landlords are pausing their mortgage, they should also be offering rent reductions or waivers.
"Landlords will be required to negotiate in good faith with tenants who are COVID-affected and Fair Trading will be able to request certain supporting documents from both parties as part of the process," he said.
"This may include evidence that the landlord has negotiated with their lender. NCAT [the NSW Civil and Administrative Tribunal] is also able to consider the financial position of the landlord in their consideration of any orders it makes, including any mortgage relief that has been provided by their bank."
Movers busier than ever
For now, a key indicator of movement, the work rate of furniture removalists, is holding up.
"There seems to be a bit of a spike at the moment. Some of our members are doing a lot more work than they'd normally expect to see at this time of year," said Joe Lopino, executive director of Australian Furniture Removers Association (AFRA).
He said some customers have hastened plans for moves they were considering ahead of potential stricter rules.
"We're an industry that's directly related to movements of people, tied to the real estate market. It's still going, but the question is: 'Who will sell? Will people be moving tenancies in the next few months?'. We don't have any answer for that," Mr Lopino said.
Co-founder of Little Red Trucks Joel Griffith has the same question about the future.
"We're definitely thinking about rice and bean meals we can make if it goes down," he said.
The Melbourne moving company has been busier than ever, potentially spurred by the Victorian Government's frequent assertions of stricter restrictions on movement if infection rates spike.
"If you looked at our books and didn't know the virus was going on, you wouldn't know the virus was going on," he said.
State vs state
| Eviction ban | Rent increase ban | |
|---|---|---|
| NSW | 6 months | No |
| Vic | 6 months* | 6 months* |
| Qld | 6 months* | 6 months* |
| SA | 6 months | 6 months |
| WA | 6 months* | 6 months* |
| Tas | 4 months | For commercial tenants |
| ACT | 6 months* | 6 months* |
| NT | NA | NA |
* Announced, still to be made into law
Victoria
- Forced negotiation: Yes*
- Tax relief for landlords: Yes*
On Wednesday it announced a temporary ban on evictions and rent increases for six months and offered land tax relief for landlords who offered rent reductions. With most states only offering cash to landlords (Victoria is offering $420 million in land tax relief for them), the Education State is also offering $80 million in relief payments for renters.
Tenants Victoria chief executive Jennifer Beveridge welcomed the package.
"We need to be able to work together. We see the new engagement between renters and landlords in this situation as, hopefully, the start of something better, of compassion and partnership between the parties," she said.
New South Wales
- Forced negotiation: Yes
- Tax relief for landlords: Yes
Unlike the suggestions for renters to proactively approach landlords if they're in trouble, the scheme insists that landlords or the managing agent must begin negotiations with a tenant who is struggling to make rental payments.
In a sign of the seriousness of the measures, there's a 60-day stop on new applications to force evictions over rent arrears. At the end of that time, landlords can recover their property — if they're in financial hardship — and tenants won't get a 'black mark' against their name.
Queensland
- Forced negotiation: Yes
- Tax relief for landlords: Yes*
Forced negotiation between parties is already part of Queensland law, and essentially means there can be no arbitrary evictions. The package offered tax relief for landlords, if they're paying land tax.
Alone among the states, Queensland has offered a $500-per-week rental relief payment to bridge the four-week gap until expanded Centrelink payments will begin.
Tasmania
- Forced negotiation: No
- Tax relief for landlords: No
Tasmanian Parliament has also passed new legislation that would ban inspections, maintenance and evictions for non-payment of rent during the crisis, except in emergencies. The laws also have provisions for either party to end a lease if they are experiencing severe hardship.
ACT
- Forced negotiation: No
- Tax relief for landlords: Yes*
If landlords agree to lower rents by at least 25 per cent, they can get tax relief. Additionally, households that have experienced a 25 per cent drop in income can defer rates for 12 months.
Emergency legislation passed last week has cemented some of the changes, such as a ban on evictions for being unable to pay until at least June 30. Others can be made by the Attorney-General without the need to recall Parliament.
Tenants' Union ACT spokesperson Deb Pippen said the initial response was promising, but lacked detail.
"The potential is there, but we just don't know what's going to happen. Tenants are still being given rent increases. Just something that says 'No rental increases in this period of time' would be a start. We don't want people trying to make money out of this situation," she said.
South Australia
- Forced negotiation: No
- Tax relief for landlords: No
Not-for-profit organisation SYC, which helps people on low incomes who rent, welcomed the changes.
"SYC is pleased that the SA Government is moving towards these sensible and timely changes," chief executive Paul Edginton said in a statement. A sign of the crisis has been a 700 per cent surge in visits to the organisation's website since the the pandemic began.
"The huge spike in enquiries to our service clearly shows that some of our most vulnerable residential tenants are very concerned about their housing outlook, particularly those who have been so severely impacted by recent business closures and job losses," he said.
Western Australia
- Forced negotiation: Yes*
- Tax relief for landlords: Expected
Premier Mark McGowan said on Tuesday it was important landlords and tenants negotiated in good faith towards a "shared beneficial outcome".
The Premier has said he was prepared to amend the laws, which aren't yet passed, if renters who haven't seen their income affected by coronavirus stop paying rent.
Northern Territory
- Forced negotiation: Announced
- Tax relief for landlords: Only for commercial landlords
"But we don't know what this will look like, we don't know if they are going to consider measures similar to those of other states … these comments give us no reassurance," she said.
"We have implored that they consider measures which reflect the Prime Minister's announcement of a moratorium on evictions and other tenant protections similar to Western Australia's."
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