COVID-19: Rent Freeze and Tenancy Terminations
On Monday 23 March the Government announced a freeze to residential rent increases and greater protections for tenants against having their tenancies terminated. This has been applied as law through the COVID-19 Response (Urgent Management Measures) Amendment Act.
In the wake of Covid-19, it’s more important than ever to ensure that tenancies are sustained and tenants do not have to face the prospect of homelessness during a global pandemic.
It’s also critical from a public health perspective that people self-isolate in their own homes by ensuring that they can remain in their rental properties for the duration of this crisis.
- There is now a freeze on rent increases.
- A rent-increase notice from a landlord will not have the effect of increasing a tenant’s rent, unless the rent increase has already taken effect.
- Tenancies will not be terminated during the lock-down period, unless the parties agree, or in limited circumstances, regardless of when notice was provided.
- Tenants will still be able to terminate their tenancy as normal, if they wish
- Tenants will have the ability to revoke termination notices that they have already given, in case they need to stay in the tenancy during the lock-down period.
Period of the measures
- The measures take effect by Thursday, 26 March
- The rent freeze applies for an initial period of six months.
- The protections against terminations will apply for an initial period of three months.
- At the end of both initial periods, the Government will evaluate whether they need to be extended.
Protections against terminations
Landlords will be unable to terminate existing tenancies unless limited and specific, justified, reasons apply. The Tenancy Tribunal will act as a check to ensure that the limited and specific termination grounds are being used lawfully.
These reasons are where the tenant:
- substantially damages the premises; or
- assaults or threatens to assault the landlord, their family, or the neighbours; or
- abandons the property; or
- engages in significant antisocial behaviour (defined as harassment; or any intentional act, if the act reasonably causes significant alarm, distress, or nuisance); or
- is 60 days behind in rent, which is increased from 21 days (and the Tribunal will need to take into account fairness and whether the tenant is making reasonable efforts to pay the rent)
Tenancies will also be able to be terminated upon the death of a sole tenant, or where the premises are uninhabitable.
Tenants will still be able to terminate tenancies as usual, although they are encouraged not to unless absolutely necessary and to think carefully about whether they are managing the risk of spreading Coronavirus in doing so. If you’re a tenant and you’ve given notice yourself but now need to stay in your current rental property, you can withdraw your notice.
Fixed-term tenancies will also convert to periodic tenancies upon the expiry of the fixed term, unless the parties agree otherwise or the tenant gives notice. This means that if your fixed term expires during lockdown, you’ll be able to stay in your tenancy.
Enforcement of the measures
The measures take effect by Thursday, 26 March. However, if a landlord had already given a rent-increase or termination notice that comes into effect after this bill comes into force this notice is of no effect.
If you are a tenant and you’ve been served a termination notice other than for the reasons set out in the Bill, before this Bill comes into effect your tenancy will continue, if you want it to. You will be able to self-isolate in your rental property.
If the Tribunal has made an order terminating the tenancy that will come into effect after this Bill comes into force, that order is suspended until the 15th day after the time period that the protections against termination apply (initially three months).
Penalties for breach of the measures
Increasing rent within the relevant timeframe or purporting to terminate a tenancy without grounds are new unlawful acts with the Tenancy Tribunal able to order exemplary damages of up to $6,500 in each case.
Boarding houses will also be subject to the rent freeze and similar protections against terminations. However, in most cases a landlord will be able to issue a boarding house termination by notice in order to manage the safety and security of tenants in a shared boarding house tenancy. A boarding house landlord will still need to go to the Tribunal to terminate a tenancy because of rent arrears or anti-social behaviour.
Role of the Tenancy Tribunal
The Bill also provides that the Tenancy Tribunal has the power to have hearings on the papers, without attendance from parties, if necessary. The Tribunal may also have hearings by telephone or videoconference. This amendment is to give the Tribunal some flexibility in its proceedings during this period. It will be up to the Tribunal how it manages this flexibility.
If you need financial assistance or emergency accommodation, you should talk to Work and Income. In the first instance, you can visit Work and Income's Emergency housing website.
Published: March 25, 2020