I have had a question that could be relevant to many of you right now with the current conditions and I wanted to share it with all of you:
Question: “I wondered if you had any advice to post on breaking a lease during these unprecedented times. My real estate have been pretty full on so far (emails before the gov intervention action to remind all tenants that failure to pay rent equals breach of contract and therefore eviction!) so I imagine they’ll be trying to force me to pay out the rent till August… What advice do you have”?
Answer: On Sunday night the Prime Minister mentioned a “six month moratorium on evictions” now what that means is a temporary hold on something. This is a huge announcement. Now with this announcement there are two things which you need to understand fully:
- NOTHING AS YET HAS BEEN PASSED IN PARLIAMENT
- IF IT DOES PASS, IT WILL ONLY BE ELIGIBLE FOR PEOPLE AND BUSINESS IN FINANCIAL DISTRESS AND HARDSHIP DUE TO CORONAVIRUS.
If it does pass in Parliament, the States and Territories will be advised to consider certain principles of the moratorium. These include:
- Temporary moratoriums on evictions if rent isn’t paid for on commercial tenancies hit by “severe rental distress” due to coronavirus
- Reducing or waiving rental payments for a set time for affected tenants
- Tenants could ask to end leases or seek out mediation on grounds of “financial distress”
- Landlords and tenants not badly impacted by coronavirus to honour their rental agreements
The laws, if passed by Parliament, will give “no effect” to rent arrears or eviction notices for an initial emergency period of 120 days due to the coronavirus crisis, with an extension of 90 days in exceptional circumstances.
Let me be very clear here though that if they do pass, a moratorium isn’t legally binding until the States and Territories have changed the laws. Until there’s some sort of legislative or regulatory boundaries on it, it’s hard to enforce. So, don’t count on it being passed and if it does, don’t assume it is a legally binding Australia-wide law.
So, the short answer is YES right now, if you do not pay your rent, you can be evicted as per each State and Territories Tenancy Laws but even if you get behind on your rent, your landlord can’t evict you straight away. You’re allowed to be behind in rent for a certain amount of time, then you get a notice, and once you get that notice, you’ve got some additional time to actually pay back the rent that is owing. The time required will vary depending on which state or territory you’re in.
If you’re facing eviction because of non payment of rent, one thing that’s important to think about is the risk of being ‘blacklisted’. If you hold onto the tenancy and the debt is accruing, that will be a trigger for the landlord to potentially list you on the tenant databases which can affect your rental history for three years, so if you can leave earlier, it can end up being less harmful to your long-term tenancy.
If you want to break lease right now you need to follow the standard Tenancy Laws for your State or Territory for doing this.
My Advice:
Be proactive and negotiate while you wait for the outcome of the moratorium on evictions. If you’re facing the inability to pay your rent or have considered breaking your lease early because of Coronavirus were are a few things to keep in mind:
- Keep your landlord or rental agent in the loop
- Be transparent about your situation
- Get anything you agree on in writing
- Get some independent advice (tenant advocate)
I think we need a system where renters aren’t saddled with massive debts at the end of all this. We need to make sure that the whole community can bear the cost of this in a fair way, and that we can all join in the recovery.
This crisis is a whole community problem – the whole community has a role to play here. And that means banks as well as landlords will have to realise their incomes may be affected and reduced, as workers have been affected.
This is why so many are standing up and are arguing that governments need to step in to facilitate rent relief. There’s probably more coming out of this Friday’s National Cabinet meeting – But please, don’t wait. If your struggling or worried you will get go through the steps above.
