Coronavirus: Rent must still be paid, code of conduct coming, says PM Scott Morrison

Scott Morrison has warned renters that a moratorium on evictions doesn’t mean they don’t have to pay rent.

Scott Morrison says residential tenants must still pay rent despite a six-month moratorium on evictions. Picture: AAP

Scott Morrison has warned residential renters that a moratorium on evictions does not mean they do not have to pay rent.

In an update on Thursday afternoon, the Prime Minister said further protection for residential tenancies still needed to be worked out by the national cabinet, but would be a priority in future meetings. “You will recall there was a moratorium on evictions. That doesn’t mean there is a moratorium on rents,” he said.

“It means people are responsible for their rents but there is a moratorium on evictions. We won’t have anyone thrown out of their homes, that’s very important.

“There will be further work done by the treasurers on residential tenancies.”

Mr Morrison and the national cabinet are also considering a mandatory code of conduct for commercial tenants and landlords, which would see rents reduced in line with declines in turnover.

The code is yet to be finalised but landlords and tenants – who are part of the JobKeeper wage subsidy program – would have room to reach their own agreements.

“What is important as part of this code is that both parties negotiate in good faith,” the Prime Minister said in Canberra.

“That there is a proportionality principle that needs to be in this code. And that proportionality principle is simply this: That the turnover reduction of the tenant needs to be reflected in the rental waiver of the landlord.

“Now, how that is done inside the lease is up to the landlord and the tenant.”

Solutions available to landlords and tenants included extending leases if there is a three or six month waiver of rent to protect both parties.

Businesses who were not receiving wage subsidies would have to abide by their current renting arrangements.

Mr Morrison also said he wanted industry to finalise the code and help tenants and landlords to make their own arrangements as much as possible.

“We want to ensure tenants and landlords are in the same room,” he said.

On Thursday the Prime Minister warned commercial landlords they would be looking for new tenants in a “very bad market six months from now” if they failed to show due concern for their renters during the current crisis.

The Prime Minister’s comments on Friday came after commercial watchdog the Australian Securities and Investments Commission had earlier warned real estate agents and landlords over advising tenant to tap into super if they were struggling to meet rent obligations.

ASIC warned doing so could breach financial advice laws restricting advice from unlicensed operators and break rules requiring advice be in the best interests of customers.

“ASIC intends to monitor this situation closely, and if contraventions of the licensing requirements of the Corporations Act are found, ASIC will not hesitate to act swiftly to protect vulnerable consumers,” ASIC enforcement director Tim Mullaly said.

The developments hit the stocks of listed real estate investment trusts, which fell dramatically on Friday afternoon.

Despite the parties formulating a package earlier in the week that was unanimously endorsed by key bodies including the National Retailers Association, the Australian Retailers Association, the Pharmacy Guild and Shopping Centre Council of Australia, a deal could not be struck, with an announcement pushed back to as late as Tuesday.

But despite the Prime Minister’s push, the lack of agreement saw the sector fall 3.4 per cent following the news, with Stockland losing 8.9 per cent, Vicinity shedding 4.1 per cent and Scentre giving up 5.5 per cent. Mirvac fell by 7.1 per cent while GPT group was down 3.3 per cent mid-afternoon.