INFORMATION FOR LANDLORDS AMIDST THE COVID-19 PANDEMIC
- Posted By Prince Lakshman
New laws are set to come into effect to help protect tenants in residential properties from eviction, other than in exceptional circumstances, and allow for the rent to be reduced if they are suffering financial hardship.
The laws are expected to be passed by the Victorian Parliament shortly. The services provided by the government agencies listed below, including Consumer Affairs Victoria, will be available to tenants and landlords when the laws come into effect.
The laws will apply to you if you’re the landlord of a residential property, the operator of a rooming house, the owner of a caravan park, or a provider of specialist disability accommodation.
MY TENANT SAYS THEY CAN’T AFFORD TO PAY THE RENT BECAUSE OF CORONAVIRUS (COVID-19). WHAT CAN I DO?
Under the new laws, your tenant will not be able to stop paying the rent. But they will be entitled to:
- apply to leave the tenancy if they want to for financial hardship, without paying fees for breaking the lease; or
- stay and negotiate a rent reduction with you.
We appreciate this is a really challenging time. To get through this crisis, all of us will have to work together.
Under this reform, landlords will not be able to evict tenants, except in specific exceptional circumstances (including if tenants damage the property, use it for criminal activity, or serious violence occurs).
You will still have the same responsibilities to your tenant that currently exist under your lease, including carrying out repairs.
The new laws will apply from 29 March 2020. This means that you cannot serve a notice to vacate from that date.
WHAT FINANCIAL HELP IS THERE FOR ME?
Contact your insurance and mortgage providers to determine the terms covering your situation.
Your tenants may be eligible for support under a new and dedicated $80 million in rental assistance for those facing financial hardship. Tenants may be entitled to up to $2,000 from the Victorian Government, to help cover any shortfall in their rent. This money is paid directly to you.
If you agree to reduce the rent, you may also be eligible for a 25 per cent land tax reduction. A deferment to 31 March 2021 may also be possible.
HOW DO I WORK OUT THE RENT REDUCTION AMOUNT?
If your tenant approaches you seeking a rent reduction, consider how much of a reduction you can afford. Consider the help available from the government, and other support that you might be able to get, such as mortgage relief from your bank.
After you’ve done that, you should contact your tenant as soon as possible. Negotiate with them to reach an amount of rent that is acceptable to both of you. When you settle on an amount, get the agreement in writing.
WHAT IF WE CAN’T AGREE?
If you’re still not able to reach an agreement, we will refer you to our dispute resolution service.
These services are free. Accredited mediators will help you and your tenant agree on a payment plan. If you still can’t reach an agreement, the disputes resolution team will be able to issue a binding order, setting out the terms of a rental agreement.
HOW LONG WILL MY NEW RENT BE FROZEN FOR?
The laws will remain in effect for six months to 26 September 2020. You will not be able to increase the rent during that time.