A win for the real estate industry! The proposed COVID-19 rental reforms amended
TUESDAY, APRIL 21, 2020
A win for the real estate industry! The proposed COVID-19 rental reforms have been amended following pressure from industry stakeholders.
Note: this article is accurate at time of posting however the regulations in relation to COVID19 responses change very frequently. The proposed amendments discussed in this article have not been passed into law as at the date of writing.
On 17 April 2020, the Real Estate Institute of Queensland (REIQ) made announcements in relation to the Queensland Government’s proposed COVID-19 rental reforms.
The proposed reforms were announced by the Queensland Government on 9 April 2020 in response to the COVID-19 pandemic. This also followed the Commonwealth Government’s announcement of a moratorium on evictions.
According to Mr Mick de Brenni, Minister for Housing and Public Works, “the Queensland framework and Guidelines were designed to enable the government to respond flexibly to the concerns of tenants and property owners due to the changing nature of the pandemic.”
The new principles for residential landlords that were to be implemented under the reforms, included:
- “You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19.”
- “You will not end a tenancy for any reason other than on an approved ground; this does not include the tenant’s inability to pay rent or the end of a fixed term lease.”
- “You will allow a tenant to refuse entry for nonessential reasons, including routine repairs and inspections, particularly if a member of the household has a higher risk profile if exposed to COVID-19.”
However, the reforms were criticised by industry stakeholders as ignoring the rights and needs of property owners throughout Queensland.
Antonia Merocella, CEO of the REIQ, said, “the proposed measures in their current form will seriously harm over 600,000 property owners who provide the vast majority of rental housing supply to 35% of Queensland’s population who rent.”
“We support the protection of tenants who are in financial distress due to this pandemic. However, the scope of these proposed measures are too broad in their application. In fact, they are the most onerous of their kind for property owners across all Australian jurisdictions to date.”
The REIQ’s campaign called for changes to the reforms, which included to
- “Introduce a minimum income reduction threshold for tenants to meet before they qualify for the protection measures.”
- “Remove the proposed break lease right that allows tenants to simply walk away from tenancy agreements with only 1 weeks’ notice notwithstanding that those tenants are afforded all the other protections provided under the Renter Protection Package.”
- “Remove the proposed automatic right to a 6-month tenancy agreement extension which in effect introduces a 12-month moratorium in Queensland with the consequential imposition of permanent rent waivers that would be extended over this additional period.”
- “Introduce a standard requirement for tenants to substantiate a rent reduction request to allow landlords to make properly informed and fair decisions about rent reductions.”
The campaign encouraged real estate supporters to send letters to Premier Annastacia Palaszczuk, insisting an immediate review of the rental reforms.
On 17 April 2020, the REIQ announced the success of the campaign. The Queensland Government approached the REIQ, which resulted in the following outcomes:
- “Rent payments and unpaid rent: Property owners and tenants can now agree on the terms of reduced rent and deferred repayment requirements.
- Financial hardship requirements: The combined income of tenant/s must have reduced by more than 25% as a direct result of COVID-19 or where the rent amount exceeds 30% of income/s and tenant/s cannot afford to pay the rent.
- Substantiation of financial hardship: Tenants must provide the same level of proof of income as is required at the start of the tenancy to seek a rent reduction.
- Entry requirements: The Government will provide clear guidance to ensure access for essential repairs and maintenance, the sale of a property and virtual inspections.
- Break lease: To qualify for the Government’s break lease provisions, tenant/s must be in severe financial hardship which is defined as a 75% reduction in combined tenant/s income and have less than $5,000 in savings.
- Extension of a tenancy: A fixed term tenancy will be automatically extended to 30 September 2020 unless agreed otherwise.”
The rental reforms are to be introduced before parliament tomorrow, on Wednesday 22 April 2020.
The Minister for Housing and Public Works affirmed the majority of the above changes and announced the formation of a new COVID-19 Housing Security Sub-Committee, comprising of the Residential Tenancies Authority, REIQ, QShelter, Tenants Queensland and QCOSS.
Mr de Brenni also announced that the Queensland Government has developed, in conjunction with industry stakeholders, the Residential Tenancies Practice Guide COVID-19 for property owners and tenants.
He says, “The Guide will support owners on a range of COVID-19 issues along with free, impartial and expert conciliation from the Residential Tenancies Authority if parties need additional support to reach agreement.”