Proposed changes to tenancy and property owner laws ‘lack balance’

Proposed COVID-19 changes to property owner and renter laws have drawn fierce criticism from one peak body and raised serious concerns for another about why the full details need to be released.

The Real Estate Institute of Queensland says the State Government’s proposed COVID-19 tenant and property owner protection package announced yesterday has forgotten Mum and Dad investors.

Housing Minister Mick de Brenni announced changes which propose a special pandemic related freeze on evictions, a waiver on rental payments and a ban on non-essential inspections and maintenance.

“Neither landlords nor tenants are to blame for this, and now is the time for them to work together to get through this pandemic” Mr de Brenni said.

But REIQ CEO Antonia Mercorella said the package had a sweeping range of tenancy protections and while the REIQ was supportive of tenants, “unfortunately todays’ announcement is disappointing”.

“What concerns us is a lack of support and protection mechanism for the owners,” she said.

“We knew a moratorium on evictions was going to be announced and we have said from the outset it was important and we welcomed it.”

“What is concerning is this entire package is solely protecting the tenants, not just protecting them in terms of an eviction but also protecting them from having to pay the full rent but also goes further and goes to break-leases, a little surprise we weren’t expecting and also allows tenants to refuse entry.”

Housing Minister Mick de Brenni. Picture: Alix Sweeney

Ms Mercorella said there was very little “in here for the investor”.

“In Queensland thirty-five per cent of people rent the home they live in and ninety per cent of that supply is provided by the Mum and Dad investors.

“When it comes to providing shelter for Queensland in this state, this government appears to be concerned with protecting only one party.”

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She said property owners listening to “this news today would think this Government has forgotten about them”.

She said there is “so little on the tenancy hub website for owners .. one sentence ‘talk to your bank’ but that is too simplistic”.

“The idea that all property owners have to do is press pause on their mortgage is too simple,” she said.

“Even if you are able to press pause it is fairly evident interest will continue to capitalise.”

In another blow, Ms Mercorella said the proposed legislation was in direct conflict with the instruction of the Federal Government in recent weeks which was that “renters will have to pay the rent back”.

She said the REIQ understood, through discussions with the Department of Housing, that renters would have to pay the rent back but this no longer appeared to be the case.

“It’s not just about the immediate impacts (of the changes) today it is that this will shatter confidence in the sector, the value of properties and the flow on effects are limitless.”

“It does all feel like a surprise. Tenants may have a sense of comfort over Easter but it will be causing major stress and anxiety for owners all across Queensland and interstate (for interstate investors).”

Michael Berkman Member for Maiwar. Photographer: Liam Kidston.

Greens MP for Maiwar Michael Berkman said his greatest concern was Labor would “capitulate to very noisy lobbying” and walk away “like they did from broader rental reforms”.

“I think it would be disappointing if we don’t see a draft bill or specifically what is proposed before it is tabled,” Mr Berkman said.

“There is a good amount of time (parliament sits again on April 22) and we need plenty of time to digest the detail.”

“Absolutely this needs scrutiny.”

He said the announcement did not make clear “how many grounds for eviction might still apply and how many people might be subject to eviction”.

“This is an inherently complex area and trying to rejig the balance, particularly in a temporary way, is problematic and we need to go carefully,” he said.

“I understand renters aren’t the only people doing it tough … and homeowners can rightly feel a bit at risk of the need for action but that shouldn’t be used as a measure to water down protections for renters.”

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Mr Berkman raised concerns the ban on evictions could have “some big loopholes”

“From a public health perspective it is crucial that no-one is forced out of their home during this shutdown, regardless of the landlord’s motives.

“Rent reductions should not depend on an arduous RTA conciliation process, so I’m considering moving amendments to make it easier to access rent relief.”

“If a tenant negotiates cheaper rent during this period due to lost income, we need to ensure they’ll be protected from rent hikes and so-called revenge evictions after the shutdown is over.”

“Tenants need confidence that if they ask for a rent-free period now, it won’t come back to bite them eight or nine months’ down the line.”

REIQ CEO Antonia Mercorella. Photo. supplied.

Ms Mercorella also raised concerns about proposed plans to prohibit owners from asking tenants for financial information regarding their inability to pay the rent and that tenants would only have to pay one week’s rent if they break their lease.

“This is a real kick in the guts to owners and I think once this makes its way into the community and owners become aware and tenants become aware I think it will cause a major revolt,” she said.

“We are absolutely already overwhelmed with feedback already in relation to this announcement.

Ms Mercorella said she hoped “we have got it wrong and we have misinterpreted the announcement and once we see the details there are protections .. there must be more to come and it can’t just be that owners have been forgotten about by this government”.

“We hope there is news around the corner that will provide relief,” she said.

“Certainly if we discover this is the final package we will continue to fight against these laws.”

She said the announcement parliament would sit again on April 22 gave the Institute “time to lobby and let owners know what is being proposed”.

“We think there is still time to work on a model that is fair for everyone. There are elements we absolutely agree with and we are supportive of tenants but tenants need to understand in the long term this will damage everyone and I think a reasonable tenant looking at this would see the owner has been forgotten and that is unjust.”

Ms Mercorella said the proposed measures included mandatory negotiations between property owners and rental tenants in “order to reach a compromise regarding any rent reduction” which could result in compulsory conciliation through the Residential Tenancies Authority.

A spokesman for Mr de Brenni said he would make no further comment and referred the News to the State Government’s Land Tax package announced yesterday.

The details of the property owner and tenants announcement can be viewed here.

KEY POINTS

Freeze on evictions: owners will be prohibited from evicting a tenant if their lease expires during COVID-19 public health crisis.

“This means that a property owner must offer an extension to the lease for at least a further 6 months,” said Mr de Brenni

“Alternatively, if a tenant cannot pay rent due to impacts of coronavirus and wants to end their lease early, they will be allowed to do so.

“Tenants will still be required to demonstrate respect for their property and neighbours by maintaining their home in accordance with their tenancy agreement.”

Rental Support: introduction of measures to support tenants experiencing hardship and unable to access or waiting for other financial support be there for Queensland tenants if all else failed.

“New eligibility criteria is now in place for rental grants of up to four weeks rent, or a maximum of $2,000,” Mr de Brenni said.

“This is a last resort for Queenslanders in need of support while they are waiting for federal government support to prevent homelessness.”

DFV Protections: legislative protections that will allow Queenslanders experiencing domestic and family violence to leave a rental property in a hurry.

“We want all Queenslanders to be safe at home, but for some people this is just not the case,” Mr de Brenni said.

“If you need to escape in a hurry, we won’t allow paperwork to stand in your way.”

“Immediate support to end tenancies quickly, change locks without seeking approval, access bond and separate from co-tenancies will be introduced.”