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Tony, Michael and David Partners at ABKJ
ABKJ Lawyers

COVID-19 And Residential Tenancies

On 22 April 2020, the Queensland parliament passed the Covid-19 Emergency Response Bill 2020. The Bill gives the ability to the various Ministers to recommend that regulations be made in response to the COVID-19 pandemic. On 24 April 2020, the Residential Tenancies and Rooming Accommodation (Covid-19 Emergency Response) Regulation 2020 came into effect.

For the most part, the regulations take effect from 24 April 2020, however there are sections relating to moratorium on evictions that are retrospective and take effect from 29 March 2020.

The new regulations expire on 31 December 2020.

Moratorium on evictions

From 29 March 2020, until 29 September 2020 (or earlier in the event that the COVID-19 emergency was to end earlier) a tenant cannot be evicted for failure to pay rent if that failure relates to the tenant suffering excessive hardship. A breach of this restriction will incur a penalty of up to $6,650.

Please note however: tenants can still be evicted for doing the wrong thing and on other grounds.

What is Excessive Hardship

The new regulations provide very clear guidelines around what “excessive hardship” is. It is where a tenant (one of the following must apply):

  • Suffers from COVID-19 (or someone they care for suffers from COVID-19);
  • is subject to a quarantine direction;
  • works at place of employment that is closed or restricted;
  • is self-isolating for certain reasons;
  • is prevented from working or returning home due to a restriction on travel; or
  • is prevented from leaving or returning to Australia due to the COVID-19 emergency.

AND that person suffers a loss of income of 25% or more, or the rent payable is 30% or more of the person’s income.

In the event that there is more than one tenant, the reduction of income (or the percentage that rent bears to income) needs to take into consideration the combined income of all tenants or residents. This will need to be substantiated by providing the same financial information that tenants would normally do at the start of a tenancy.

In working out a tenant’s income, they need to include any financial assistance (such as jobkeeper, jobseeker or rental assistance) being received.

A tenant has an obligation to as soon as reasonably practicable inform the landlord of any change in circumstances where they are no longer suffering from excessive hardship (if they do not there is a penalty of $2,660.00).

Rent Reductions and Deferrals

There is no specific direction in relation to agreements for rent reductions or deferrals. It is up to the parties to enter into any variation agreement, including an agreement to either reduce the rent for a stated period or enter into a payment plan for unpaid rent.

The Government has continued with their request that parties work together in relation to a new temporary and sensible rent amount. The guidelines for these discussions are still being developed. The regulations allow the Minister to make more guidelines to assist with the application of the regulations.

In the event that the parties simply cannot reach an agreement, there is now a process for a conciliation. If that does not work, then an application to the tribunal for an order can be made – which can be any order that the tribunal considers appropriate.

The Residential Tenancy Authority (RTA) has strengthened its dispute resolution capacity to accommodate conciliation, and applications for dispute resolution relating to COVID-19 will be prioritised by the RTA. There is even a new COVID-19 dispute resolution request form (Form 16a) and an online portal for uploading supporting documentation.

Please note that in circumstances where the rent is reduced, it is not necessary to reduce the bond as a result of that reduction.

Unpaid Rent

As a new requirement, the regulations introduce a new show cause notice for rent that is unpaid for at least 7 days. In circumstances where the landlord knows or reasonably ought to know that the tenant is suffering excessive hardship, then the landlord is not able to serve the usual notice to remedy breach. Instead the landlord must serve a show cause notice in the approved form. The purpose of a show cause notice is to allow the tenant to inform the landlord of their excessive hardship. If they are experiencing excessive hardship, this gives the landlord an opportunity to request the tenant to enter into a variation agreement.

Extending Agreements

In cases where the residential tenancy agreement was due to end on or before 29 September 2020 AND the tenant is suffering excessive hardship, tenants must be offered an extension of the term of the tenancy to 30 September 2020 (or any earlier date requested by them).

Tenant termination of agreements

A tenant is not entitled to apply to a tribunal for a termination order because the tenant would suffer excessive hardship. This is unless they have first made a dispute resolution request and have been unable to reach an agreement. The Regulations make clear that the COVID-19 situation is not to be used by tenants as an excuse to get out of their tenancy agreements.

Landlord’s Entry to Premises

A landlord or its agent is not able to enter the premises for routine reasons if:

  • A person at the premises is subject to quarantine;
  • The landlord/agent is subject to quarantine;
  • Entry would contravene a public heath direction; or
  • The tenant refuses entry due to the tenant (or another person staying at the premises) being a vulnerable person.

A vulnerable person is someone who is:

  • over 70 years of age;
  • over 65 years of age who has an existing health condition or comorbidities;
  • an Aboriginal person or Torres Strait Islander over the age of 50 who has an existing health condition or comorbidities; or
  • an individual whose immune system is compromised.

It is clear that entry associated with smoke alarm compliance is still allowed, as is emergency entry, and where a landlord believes entry is required to protect the premises from imminent or further damage. These provisions are not a blanket permission to a tenant to deny entry to the premises. There are also circumstances in which the tenant must allow a virtual inspection or video conference.

Contact us

Please do not hesitate to contact our experienced Property Lawyers if you have any questions about the application of these new provisions. To make an enquiry, please use the contact page or call us on 07 5532 3199.

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