Tenants told to prove financial losses to avoid eviction

As tenants are warned they must prove financial strife from coronavirus to avoid eviction over unpaid rent, we asked the State Government 16 important questions about COVID-19 rental disputes. READ THE FULL RESPONSE

TENANTS have been warned against using coronavirus as an excuse for “rent strikes, rorts and rip-offs’’ after a landlord backlash forced a State Government backflip yesterday.

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Housing Minister Mick de Brenni said tenants seeking rent reductions would have to prove they had lost a quarter of their income, or would have to pay more than 30 per cent of their income in rent, as a result of COVID-19 lockdowns, job losses or business closures.

Mr de Brenni said the Government would publish revised guidelines for tenancy disputes before legislating a backdated ban on evictions when Parliament sits next Wednesday.

“We’ve seen a threat of rental strikes in NSW and Victoria,’’ he said. “It is not appropriate just because the Prime Minister says there’s a moratorium on evictions, to simply say, ‘I’m just not going to pay the rent’.

“We know that many of those ‘mum and dad investors’ are not rich, they’re not wealthy, they have simply invested in a property for their family’s future. We want to make sure no mum and dad investor loses their home because of coronavirus.’’

Mr de Brenni said the federal JobSeeker and JobKeeper payments of $1500 a fortnight for sacked workers and struggling businesses “will ensure most Queenslanders will be able to meet their rental obligations’’. The State Government would legislate to backdate a ban on evicting tenants who have failed to pay rent since March 29 as a result of coronavirus job losses. Tenants would be protected from eviction until September 30.

“To be able to be covered by the freeze on evictions you will need to demonstrate the 25 per cent,’’ he said.

“There’s no rorts here, no ripoffs, you have to be able to demonstrate lost income.’’

Mr de Brenni said if landlords and tenants could not agree on a temporary rent reduction, they would be forced to conciliate through the Residential Tenancies Authority.

But landlords, as well as tenants, would have to disclose their financial details.

The RTA yesterday refused to answer The Courier-Mail’s questions about whether landlords can take unpaid rent out of tenants’ bond money.

It also refused to say if landlords retain their legal right to pursue debts for unpaid rent.

The Courier-Mail asked the RTA to answer 16 questions about COVID-19 rental disputes. Here are the responses sent by a State Government spokesperson.

1. What is the legal status of the ban on evictions? Do property owners retain their legal right to evict a tenant who is refusing to pay rent?

The National Cabinet freeze on evictions that was announced on 29 of March for those impacted by COVID-19 and facing financial hardship. The freeze on evictions allows time for conciliation should a tenant be unable to pay their current rent and requires agreement on a new rent. Property owners may still end tenancies including where the tenant has seriously breached a tenancy agreement, including malicious damage to the property or anti-social behaviour.

2. What will happen if a landlord tries to evict a tenant over refusal or failure to pay rent?

If the tenant has proved they are impacted by COVID-19 the property owner would not be permitted to issue a notice to leave for rent arrears.

3. Landlords can ask for evidence of job loss or Centrelink payments but cannot ask for any other financial information. Is it fair that tenants who may have adequate money in the bank could withhold rent, and the property owner has no way of ascertaining this? Failure to pay rent is causing great financial hardship for some property owners.

Property owners and tenants are asked to communicate openly and honestly to come to mutually agreed outcomes. If tenants and property owners are having difficulty reaching agreement, free mandatory conciliation with the Residential Tenancies Authority will be required where both parties must provide detailed financial information.

4. You say that landlords and tenants should negotiate. What are the guidelines for this? Is a week a fair amount of time for a negotiation? What if either party refuses to negotiate or ignores communication and "fobs off'' the other party? At what point should the matter go to the RTA for conciliation?

Guidelines are being developed in consultation with stakeholders which will support the legislative changes which will cover off on for example, provision of supporting documentation.

5. Are RTA conciliation decisions legally binding?

Conciliation will look at individual circumstances of both tenants and property owners and will be enforceable.

6. What happens if a tenant has failed to pay rent and refused to negotiate changes to the lease or to offer part-payment?

Under the new legislation, mandatory conciliation will be required through the RTA. If an agreement is unable to be reached with the RTA owners will have to go to QCAT.

7. Can unpaid rent be taken out of bond money?

Question not answered.

8. Do landlords retain their legal right to pursue debts for unpaid rent?

Question not answered.

9. What protections do property owners have to prevent tenants using COVID-19 as an excuse to stop paying all rent? Should Centrelink recipients be required to pay some rent?

If the tenant has demonstrated hardship as a result of COVID-19, a new agreement should be arranged for a new reduced rent, and if the difference in rent will be re-paid. Usual tenancy rules still apply for anyone who is unaffected by COVID-19 income loss.

10. Will the RTA rule that tenants should pay no more than 30 per cent of their income as rent? Eg a household with two people receiving $1500 per week from Centrelink would pay no more than $500 per week. Will this be legally binding?

Conciliation will look at individual circumstances of both tenants and property owners and will be enforceable.

11. Are landlords able to offer tenants the option of ending a lease earlier if they cannot afford to pay rent, so long as it is not an eviction?

Under current legislation, it is possible provided both parties will come to an agreement.

12. Will tenants be required to backpay rent that has been unpaid up until the point of a negotiated change to the lease agreement? How can landlords ensure they are back paid rent?

Usual tenancy laws apply around non-payment of rent, unless the tenant has been impacted by COVID-19. It’s up to owners and tenants to agree whether back pay of rent is payable, and if it can’t and agreement will be conciliated.

13. If banks refuse to provide mortgage relief to a landlord who is then forced to sell the property due to a tenant's failure to pay rent, can the tenant be evicted?

An owner would be able to end a tenancy if they are selling the property. The Palaszczuk Government has announced rental grants for those at risk of homelessness. .

14. Will tenants who refuse to pay rent or negotiate changes to a lease have a black mark on their credit rating or rental history?

If the tenant is facing financial hardship as a result of COVID-19, and they are able to demonstrate this, they would not be able to be evicted during the six month period or listed in a tenancy database for rent arrears or for other tenancy agreement breaches due to the impacts of COVID-19.

15. How many disputes/requests for conciliation over COVID-19 rents have been lodged with the RTA?

As tenants and lessors work to understand this changing tenancy environment, we would expect increased requests for conciliation. Many landlords and tenants have already made their own private agreements and we anticipate that this will increase as people start to understand their new rights and obligations during COVID-19.

16. What is the time frame for dispute resolution – ie if a tenant or landlord notifies a dispute today, will it be resolved in a week, a month, 3 months? What happens in the meantime?

There is no set timeframe for dispute resolution, though all parties will want to resolve matters in a timely fashion.