24.04.2020 at 05:59
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Corona Virus Changes to Tenancy Laws in Victoria – What does this mean for Landlords and Tenants?


The Victorian Parliament has just passed the COVID-19 Omnibus (Emergency Measures) Act 2020 which is in effect for 6 months beginning 29 March 2020. Here is a summary of what it says about residential tenancies.

Increases/reductions to and payment of rent

-       Landlords are prevented from increasing rent (s 539(1)) and cannot give a notice of a proposed rent increase to a tenant (s 539(2))

-       If a tenant wants their rent to be reduced, or a payment plan put in place, the tenant has to apply to the VCAT. The Tribunal can then make an order to either reduce the rent payable for a specified period, or they can order the tenant to enter into and abide by a payment plan to pay the rent, or a reduced amount of rent, and any arrears under the tenancy for a specified period of time.

-       Centrepay, a bill paying service administered by the Department of Human Services, is now also included as a method of payment to landlords by tenants. The Centrepay requirement is only applicable to eligible landlords. Those who are eligible must allow payment of rent by Centrepay if the tenant wishes to do so. (s 541)

 

Breaches of tenancy agreement

-       If a tenant or landlord breaches a term of the tenancy agreement or a duty provision, that breach is not to be treated as a breach if the tenant or landlord was unable to comply, or if it was not reasonably practicable for them to comply because of a ‘COVID-19 reason’. The Act lists what is a COVID-19 reason under s 537, which includes:

o   illness (regardless of whether the illness is caused by COVID-19);

o  compliance with the exercise of emergency powers, and/or public health risk powers by the Chief Health Officer or other authorised officer under the Public Health and Wellbeing Act 2008;

o  compliance with the exercise of a power or the giving of a direction under section 24(2) of the Emergency Management Act 1986 by the Minister administering that Act;

o  compliance with a recommendation that is publicly announced by the State or made by the Chief Health Officer in relation to the COVID-19 pandemic;

o  if they cannot comply without suffering financial hardship;

o  as a result of any exceptional circumstances in relation to the COVID-19 pandemic.

 

Fixed Term Tenancy Agreements

-       A party to a fixed term tenancy agreement can apply to the Tribunal for an order to reduce the term of the agreement and make any variation to the terms of the agreement that are necessary due to the reduction of the term. The Tribunal will only make this order to reduce the term if they are satisfied the applicant will suffer severe hardship and the applicant’s severe hardship will be greater than the other party’s severe hardship if the order is not made.

 

Notices to vacate

-       Landlords cannot give a tenant a notice to vacate a rented premises, and any notice given has no effect.

-       However, tenants are also unable to give landlords a notice of intention to vacate unless specific limited circumstances apply. Such circumstances include requiring special care that they cannot receive unless they vacate, a written offer of public housing, the requirement of temporary crisis accommodation or suffering severe hardship. If the tenant falls within the allowed circumstances, they must give a minimum of 14 days’ notice and will not liable to compensate the landlord for any losses associated with the early termination, including loss of rent.

-       Therefore, not only do the changes restrict landlords from evicting their tenants, it also substantially restricts tenants from moving out of their rental properties. 

 

The most important point is that, even if evictions are not possible, rental obligations are not abolished. This means they can still be enforced in the same way as any other debt, such as bank account seizures or wage deductions. See your solicitor about these if necessary. 

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