The Queensland Government passed the COVID-19 Emergency Response Act on 22 April 2020. This Act allows Ministers to make extraordinary Regulations that override other legislation if they are satisfied that the Regulations are necessary for the COVID-19 Emergency Response Act’s purposes.
The Government subsequently passed the Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Regulation (“the Regulation”) which is designed to provide additional protections to landlords and tenants during the COVID-19 emergency response period (which is currently due to expire on 31 December 2020). While in force, the Regulation will override the provisions of the Residential Tenancies and Rooming Accommodation Act 2008 (“the Act”) in a number of areas.
EXCESSIVE HARDSHIP
It should firstly be noted that a number of the protections given to the tenant only apply if the tenant has suffered an “excessive hardship because of the COVID-19 emergency” – the Regulation provides that this occurs if during the COVID-19 emergency period:
any of the following apply:
the tenant (or anyone else in their care) suffers from COVID-19;
the tenant is subject to a quarantine direction;
the tenant’s place of employment is closed, or their employer’s business is restricted, because of a public health direction;
the tenant is self-isolating because they are a vulnerable person (or they live with or are the primary carer for a vulnerable person);
a restriction on travel imposed by a public health direction (or other law) prevents the tenant from working or returning home; or
the COVID-19 emergency prevents the tenant from leaving or returning to Australia;
and
the tenant:
suffers a loss of income of 25% or more; or
the rent payable under the tenancy agreement is 30% or more of the tenant’s income
(noting that if there is more than one tenant, the above percentages apply to the combined income of all of the tenants).
AMENDMENTS TO ACT
The Regulation amends a number of the provisions of the Act, so far as they are inconsistent with the provisions of the Regulation, while the Regulation remains in force:
Moratorium on Evictions
From 29 March 2020 to the later of 29 September 2020 and the last day of the COVID-19 emergency period, a landlord can’t evict a tenant for failure to pay rent if that failure relates to the tenant suffering excessive hardship because of the COVID-19 emergency.
It’s important to note however that the Regulation provides that this moratorium doesn’t prevent the landlord ending the tenancy agreement:
for any reason other than failure to pay rent;
for failure to pay rent that was not related to the tenant suffering excessive hardship; or
if the landlord gave a notice to leave before 29 March 2020.
Extension of Fixed Term Agreements
If:
the tenancy is an existing fixed term tenancy agreement that ends on or before 29 September 2020; and
the tenant is suffering from excessive hardship because of the COVID-19 emergency
the landlord must, before the end of the current term, offer to extend the term to 30 September 2020 (or any earlier date requested by the tenant) and the tenancy will then continue until the extended date on the same terms.
This provision does not however apply if:
the fixed term agreement ended before the Regulation commenced; or
the landlord gave a valid notice to leave before the commencement of the section (or the tenant gave a valid notice of intention to leave before that date).
Note that this extension provision does not prevent the ending of the tenancy agreement under the relevant provisions of the Act (subject to the limitations of the Regulation).
Ending Tenancy Agreements
TERMINATION BY LANDLORD
The Regulation now allows a landlord to give the tenant notice to leave (noting it must however give at least 2 months’ notice – but that this can now be earlier than the end of a fixed term agreement) if:
the landlord is preparing to sell the premises and the preparation requires the premises to be vacant;
the landlord has entered into a Contract requiring vacant possession;
the landlord, or a member of their immediate family, needs to occupy the premises; or
the premises are required for use under a program administered by the State.
Landlords are however prohibited from giving any information in the notice that is false and misleading and can’t let the premises to a person under another tenancy agreement.
The Regulation also prohibits the landlord giving the tenant a notice to leave without grounds if the tenant is (or has been) suffering excessive hardship because of the COVID-19 emergency (and any notice given is of no effect until the end of the emergency period).
TERMINATION BY TENANT
A tenant can now give a notice of intention to leave, within 7 days after they first occupy the premises, if the premises are not in good repair, are unfit to live in or do not comply with a prescribed minimum housing standard (unless that condition was caused by a breach of the agreement by the tenant).
If:
the tenant is suffering excessive hardship due to the COVID-19 emergency; and
the parties have not been able to reach a conciliation agreement in dispute resolution procedures
the tenant can apply to the Tribunal to terminate the tenancy agreement.
RELETTING COSTS
The Regulation only allows tenancy agreements to include a provision requiring the tenant to pay the landlord’s costs in reletting the premises if:
it is a fixed term agreement;
the tenant is only made liable if it terminates the agreement in a way not permitted under the Regulation; and
the payment is limited to the landlord’s reasonable costs.
However, any reletting costs provision is void if the agreement is ended because of a termination order, a notice ending residency under the new domestic violence provisions (see below) or a notice by the tenant because of the condition of the property (see above).
Further, if the tenant suffers a loss of income of 75% or more and the tenant has less than $5,000 in savings (combined if there is more than one tenant), the tenant is only liable to pay reletting costs equal to one week’s rent.
Unpaid Rent
If the rent is overdue by at least 7 days but the landlord knows (or ought reasonably know) that the tenant is suffering excessive hardship because of the COVID-19 emergency, the landlord can’t serve a notice to remedy breach, but can give a show cause notice to pay the unpaid rent.
If a tenant receives a show cause notice for unpaid rent, within 14 days it must either pay the rent or advise the landlord that it is suffering excessive hardship because of the COVID-19 emergency.
If the tenant informs the landlord that it is suffering excessive hardship, the landlord can ask the tenant to enter into a tenancy variation agreement. A tenancy variation agreement can cover rent reduction for a stated period or a payment plan for unpaid rent. Note that the rent increase provisions of the Act don’t apply to an increase in rent at the end of the term of the variation agreement. If the parties can’t reach agreement on the terms of any tenancy variation agreement, either party can request dispute resolution in relation to the unpaid rent.
If the tenant does not pay the unpaid rent or give notice of excessive hardship within the 14 days, the Landlord can then serve a notice to remedy breach.
Note also that if an application is made to the Tribunal for a termination order because of unpaid rent, the Tribunal can’t grant the application if the rent was unpaid because the tenant has been suffering excessive hardship because of the COVID-19 emergency.
Entry to Premises
The landlord (or its agent) mustn’t enter the premises (and the tenant can refuse entry):
to inspect;
for repairs or maintenance (or to inspect repairs or maintenance undertaken);
to show the premises to a prospective buyer or tenant;
to allow a valuation of the premises;
if the landlord thinks the premises has been abandoned; or
to inspect to see if the tenant has remedied a breach after a notice to remedy a breach has been given
if
the landlord (or its agent) is subject to a quarantine direction;
any person at the premises is subject to a quarantine direction;
the tenant refuses entry because the tenant, or anyone staying at the premises, is a vulnerable person; or
entry would contravene a public health direction.
The landlord can also refuse to enter the premises (e.g. if it believes any of the above apply).
If the landlord wishes to enter the premises to inspect it or show it to a prospective buyer or tenant, but the tenant refuses entry because they (or another person at the premises) is a vulnerable person, the tenant must allow the Landlord to undertake the inspection by virtual inspection, video conferencing or by the tenant giving the landlord access to photographs or video (of sufficient quality to enable the landlord to judge the condition of the property) of the premises.
Repairs and Maintenance
If the landlord’s obligation to maintain and repair under the Act:
is inconsistent with a public health directive or social distancing; or
would require the landlord to enter the premises but it is no longer able to (see above)
the landlord is released from the obligation (to the extent of the inconsistency) until the earlier of the date the obligation stops being inconsistent with the public health direction or social distancing and the date the COVID-19 emergency period ends.
The landlord is also released from the obligation until necessary tradespeople or supplies are available (or the COVID-19 emergency period ends), if they are not available at the time the repair and maintenance obligation arose.
Note that the landlord is still however required to make emergency repairs.
Domestic Violence
If a tenant believes that they can no longer safely occupy the premises because of domestic violence against them, the Regulation now allows them to terminate the tenancy agreement. When giving notice, the tenant must however give the landlord supporting evidence – e.g. protection order, injunction for personal protection under the Family Law Act or a report about domestic violence from a doctor, social worker, refuge or crises worker, domestic and family violence support worker or case manager, Aboriginal and Torres Strait Islander medical service or solicitor.
If the landlord receives a notice ending the tenancy under these provisions, it must advise the tenant who gave it:
whether the landlord intends to apply to the Tribunal to have the notice set aside because it does not comply with the requirements of the Regulation; and
if there are other tenants under the tenancy agreement:
that the other tenants will be informed that the tenant gave the notice – and when the other tenants will be given this notice; and
that the agreement continues for the other tenants.
If the landlord does not believe that the requirements of the Regulation have been met by the tenant, it can apply to the Tribunal to set aside the notice – which it must do within 7 days of receiving the notice. The Tribunal will hear this application as an urgent matter.
If the tenant that gives this notice is the sole tenant under the agreement, the agreement will end 7 days after the notice is given by the tenant (or the date it hands over vacant possession if that is earlier).
The Regulation also allows the tenant to make an application to the Tribunal seeking termination of the tenancy agreement (or so far as it relates to them) because of domestic violence committed against them.
Under the Regulation, the vacating tenant is not liable for costs incurred by the landlord in reletting the premises.
The Regulation also provides that:
the tenant’s obligations to keep the premises clean and not to damage it, don’t apply to the extent that the obligations would require the tenant to repair, or compensate the landlord for, damage caused by domestic violence experienced by the tenant; and
the tenant can change the locks to the premises (so long as they use a qualified tradesperson or locksmith) if they believe it is necessary to protect themselves (or another occupant) from domestic violence.
Tenancy Database
The Regulation prohibits a user from listing personal information relating to a failure to pay rent or the ending of a tenancy agreement in a tenancy data base if the failure or termination happened during the COVID-19 emergency period and was because the person suffered excessive hardship because of the COVID-19 emergency or was complying with a public health direction (unless the tenant didn’t advise the landlord that the failure or termination was for these reasons).
HOW THE REGULATION MAY AFFECT PURCHASES AND SALES
The provisions of the Regulation will not only affect the dealings between the landlord and tenant, but may also affect a sale and purchase of the property.
For example,
the above moratorium on evictions, extension of fixed term agreements, increased ability for tenants to terminate, reduced ability for landlords to claim reletting costs and restrictions on addressing unpaid rent may result in buyers being less inclined to purchase tenanted properties as investments;
the limits on landlord’s right to inspect may make it more difficult to market and sell the property and for any buyer to undertake any inspections it may require; and
the moratorium on evictions, extension of fixed term agreements and restrictions on termination due to unpaid rent may affect:
the ability to provide a buyer with vacant possession; and
a buyer’s ability to claim duty concessions (e.g. principal place of residence and first home concessions).
Please feel free to contact our Property Law team if you have any queries in relation to the new residential tenancy provisions and how they may affect your property.
This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.
The post New Emergency Residential Tenancy Provisions Due to COVID-19 Emergency appeared first on Murdoch Lawyers.
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