Myths and Facts regarding Residential Tenancy Agreements during COVID-19 – for landlords and tenants.

Myths and Facts regarding Residential Tenancy Agreements during COVID-19 – for landlords and tenants.

Some may have recently lost their job because of the coronavirus pandemic and are currently scrambling to pay the rent. What should they do? Rent breaks and price freeze are some of the common discussions among tenants, real estate investors and property owners during the COVID-19 crisis.

In this time of suffering and great uncertainty, real estate owners are encouraged to deal with their tenants sympathetically, but to what extent? And how should banks respond to negotiations for mortgages?

Find all the answers as we debunk some myths on real estate during COVID-19 Pandemic.

Myth #1: Tenants Don’t Have To Pay Rent For Six Months

This is false. The Prime Minister announced on 29th March that all State give a 6-month moratorium on evictions for tenants in financial distress. A moratorium is only a delay or suspension for evictions but tenants will still have to pay their rent after the coronavirus crisis. Tenants are still expected to pay up and honour their leases and rental agreements after the given date. Whatever rent or bills you owe, you still have to pay eventually.

Tenants who will not pay rent once the moratorium ends may face eviction. As of now, there are currently no special provisions for rent assistance and so far only Queensland has agreed for a one-off payment of $2,000 if you lost your job during the pandemic. For now, residential tenants, landlords, and agents are encouraged to discuss and agree on alternative arrangements.

Myth #2: You Can Evict A Tenant For Not Paying Rent

Landlords aren’t allowed to apply to the Tenancy Tribunal to evict tenants for rent arrears unless the tenant is at least 60 days behind in payment. The Tribunal will also look and consider the circumstances of the tenant and if the tenant made reasonable efforts to pay rent.

Landlords can proceed with legal processes however they must follow the processes by the Residential Tenancies Act 2010. Also, tenants can’t be evicted without orders from the NSW Civil and Administrative Tribunal (NCAT).

The Tenant’s Union and more than 100 organizations in the country are also calling the state to put stop on evictions during this health crisis.

A time of great suffering like this calls for solidarity and compassion amongst everyone. We are all worried about our own finances, but this isn’t the time to abandon our humanity.

What Options Do You Have as a Tenant?

Tenants can negotiate their cases with their landlords. If you’re already in serious trouble before the coronavirus crisis, it’s unlikely that your landlord will be penalized for evicting you. If you’re a good proactive tenant, you can also attempt to ask for a reduction for a short period of time or ask for a repayment plan. When creating repayment plans, make sure that the case is made in writing and both signed by the tenant and landlord.

Landlords are not obligated to agree but are encouraged to do so, especially if the tenant has shown sufficient evidence of a decrease in job hours, rates, or unemployment.

What Options Do Landlords Have?

Most banks are also extending help for landlords under financial woes. You may find that your bank is currently pausing loan repayments for six months.

You can call your respective broker or bank to discuss your financial uncertainty. You can also ask for help and check if you’re eligible for the Government’s stimulus package.

Myth #3 Landlords Should Reduce Tenant’s Rents

Tenants can negotiate rent reduction but landlords are not obligated to agree. When negotiating, landlords have the right to request personal information such as letters from employers if you lost your job or bank statements showing your financial situation.
To protect the people, the Minister of Finance has also announced a temporary freeze on rent increases and tenancy termination. This is a law announced on March 23 through the COVID-19 Response Amendment Act.

Myth #4 Tenants Should Pay Rent If They Signed a Lease on New Place

Due to the current movement restrictions, tenants can withdraw notices if they aren’t able to move into the new place. If your current tenancy is overdue, you should negotiate with your landlord to extend the current tenancy as much as possible. This guideline will prevent further burden to tenants who may be stuck to paying rent for two places at once during the course of the lockdown.