Residential Rent Relief Package

The REIV has been involved in private briefings with the Office of the Minister for Consumer Affairs and can share the information below. As always, the detail will need to be examined once the government passes the new laws which is anticipated to occur on Thursday 23 April. At this stage, the REIV has not seen the proposed legislation around residential rent-relief announced by the Andrews’ Government on 15 April 2020.

Overview:

An $80 million rental assistance fund has been established to provide rent relief payments of up to $2,000 to Victorians experiencing rental hardship due to Covid-19.


Rental hardship:

• The tenant is paying more than 30% of their income in rent and have limited savings (less than $5,000) or access to other support.
• Household income must be less $100,000 per annum. 
• To be eligible for the rent relief payment the tenant must have now, or will soon have, a bond registered with the Victorian Residential Tenancies Bond Authority.
• The 30% test applies before the agreed, mediated or ordered rental reduction has been applied.

Rent Relief Payment:
In the first instance a tenant who is unable to pay their rent should contact the landlord or Property Manager to negotiate an alternative arrangment such as rent deferral or reduction. If an agreement is reached it must be in writing and lodged with CAV. The tenant may then be entitled to a rent relief payment. The REIV is seeking advice as to whether the agreement is to be in a pescribed form. 

• The rent relief payments are paid directly to the tenant’s agent, lessor or landlord as a contribution towards the rental payments.
• The payment will be used as a credit for rental payments at the agreed, mediated or ordered reduced amount.
• The rental relief payment is in addition to the agreed/mediated or ordered rental reduction recorded with CAV.

The Department of Health and Human Services will administer the rent relief payment (grant). Payments are expected to be paid within two weeks of an application being approved. They will only be granted in three circumstances:

• Where the tenant has negotiated a rental reduction with their landlord/property manager and that agreement is in writing and lodged with CAV; OR

As we understand it, the grant does not apply to rent deferral; 

• Where the tenant has undertaken a dispute resolution or mediation process with CAV; OR
• Where the tenant is subject to a VCAT decision which directs a grant be made.

Shared leases 
Any person who meets the eligibility criteria may qualify for a grant that represents their portion of the lease.   The REIV is seeking clarification as to the applicability of the total household income in these instances.
All tenants on the lease should try and negotiate an alternative arrangement such as rent reduction or deferral with the landlord/property manager.

Refusal to pay rent – Rent Strikes
Refusal to pay rent is likely to be a breach of the tenancy agreement 

Break lease arrangements
In circumstances where a tenant is experiencing financial hardship and cannot afford to pay the rent because of Covid-19 they will be able to apply to break the lease early. Break lease fees will not apply, and bond claims will remain the same process. The tenant must not be able to be listed on a residential tenancy database (blacklist).   

Reasons for Evictions
The REIV has been made aware of some of the grounds for evictions. The eviction moratorium is only for financial hardship cases caused by Covid-19. The reasons for evictions that we are aware of are:

• The owner is selling, extensively renovating or demolishing the property; or
• The owner is moving back into the property; or
• There is evidence of threatening or violent behaviour; or
• The property has been sublet without consent; or
• Malicious damage to the property; or
• The neighbours are in danger of injury or harm; or
• There is illegal activity on the property; or
• The property is unfit for occupation; or
• There is a VCAT order in effect to evict the tenant; or
• Wilful refusal to pay rent (if the person can afford to pay)

Previously issued Notices to Vacate
The new laws apply from 29 March 2020 therefore any notice to vacate for non-payment of rent served on or after that date will not be enforceable (other than wilful non-payment of rent).  The REIV is seeking clarity as to how to handle notices served prior to 29 March.

Rent increases
Landlords will not be able to increase rent until after 26 September 2020 (at this stage this the date until which the new laws will be effective).