COVID-19 - Client Update 09/4/2020


COVID-19 - Client Update 09/4/2020

9/4/20 -Special COVID-19 Protections for residential tenants and owners in Queensland

****Note the following are the proposed and not yet passed as legislation - Parliament sits the first week after Easter and the REIQ are formulating a response as a matter of urgency ****

Today's announcement by Minster for Housing and Public Works, Mick De Brenni, has unveiled a package of measures to implement the freeze on evictions. We knew that this was coming. This is retrospective, and the Moratorium only applies to Rent Arrears due to financial impact arising due directly to COVID-19. But what we didn't know is it would be announced today. The eve of Easter Friday. 
Sure, great for tenant's but not the news we were wanting to hear to enable Landlords and Property Managers to relax.  

Key aspects of the announcement:

  • If a tenant feels that are suffering hardship, then we can ask why, but we cannot ask for specific information about their finances. The RTA will be the only party able to request information on this if we are unable to come to an agreement.
  • For those that can’t reach an agreement, there will be compulsory conciliation for COVID-19  related disputes between tenants and landlords through the Residential Tenancies Authority.
  • If a tenant is unable to pay the current rent amount, a new amount may be agreed upon by both parties. This becomes the new rent amount. For example, if the rent goes from $400 per week to $200 per week, this becomes the new agreed rent and the tenant is no longer liable for the old rent amount. A specific timeframe for the reduced rent, for example 6 months or until the income loss is resolved must be specified. The minister has ensured tenant's that debt's won't accrue for tenants, and they will not be placed on a Tenancy Database.  
  • New protections now mean that property owners will be prohibited from evicting a tenant if their lease expires during COVID-19 public health crisis. “This means that a property owner must offer an extension to the lease for at least a further 6 months,” said Mr de Brenni. 
  • Alternatively, if a tenant cannot pay rent due to impacts of coronavirus and wants to end their lease early, they will be allowed to do so.
  • The government has announced a cap on break lease penalties, as part of its response to the freeze on evictions. Tenant break lease costs will be capped at the equivalent of one week rent during the COVID-19 pandemic.
  • Tenant's will have the right to refuse entry to the property by an owner or agent/manager for non-essential reasons (including routine inspections), particularly if they have a member of the household with a higher risk profile if exposed to COVID-19. Repairs and maintenance may be required to keep the premises safe, and in many cases can be completed in-line with social distancing rules. But showing a prospective buyer or tenant is not clear. Smoke Alarm checks have not yet been outlined if it falls under an emergency or essential repair. We await further clarification.

Please take the time to review the Residential Rental Hub released today:

In following the REIQ in tonight's Facebook Live announcement CEO Antonia Mercorella provides an update for real estate industry professionals. I have summaried and agree with her sentiments.  

This announcement is ridiculous, a property owner and property manager should be able to request proof of tenant's new financial position. We do so when they are approved to live in a house, why is it unreasonable that we as the Property Manager can not ask for this when a Tenant is asking for a reduction or payment plan.

Originally the Federal Government indicated that any unpaid rent that would accumulate, would be payable, not waived. However, from the announcement today, this has yet to be defined.  This is disappointing and not what we had anticipated inline with what the Federal Government announced. 

Currently, in Tasmania, the unpaid rent has to be paid back. Unfortunately, Queensland has completely sided with the tenant with no protection for the Landlord or the Property Management business. 

As agents, we have to manage this process carefully.  If we don't get this correct it will have an affect on the property market post 2020.  

The REIQ will be seeking further clarification on behalf of the Queensland Real Estate Industry.  To review tonight's announcement by REIQ CEO see here:

Good news: 
If a Lessor/Agent issued a Notice to Leave before 29 March 2020, that notice may still apply if it was for Arrears not COVID-19 related, or alternatively it was an approved reason. 

We have received very positive feedback from our tenants and we have 10% of our Rent Roll (total number of properties under management) affected by joblessness. Most are placed well to still meet their rental obligations with the Governments Covid-19 stimulus packages such as JobSeeker/JobKeeper.  

As soon as legislation is passed, I will provide a detailed summary via email to Beautique Clients and again update this running blog. 

Please enjoy a wonderful Easter break. We hope you have created some new traditions to make the time fun filled as a distraction from our current issues.