VIC Government Proposed Rent Relief Package - FAQ's For Landlords
The Victorian Government has proposed to bring urgent legislation to the Parliament to support tenants and landlords through the Coronavirus pandemic by reforming residential and commercial tenancy laws.
The laws will apply to you if you’re the landlord of a residential property, the operator of a rooming house, the owner of a caravan park, or a provider of specialist disability accommodation.
In order to help you navigate the new proposed legislations, we have compiled the following FAQ’s.
Please note these proposed changes have not been legislated and are subject to change. We will update this article when the final legislated changes are announced by the Victorian Government.
What does the Victorian Government Rental package of measures include?
- Evictions are banned for residential tenancies for six months, other than in exceptional circumstances
- Evictions will be banned for six months for the non-payment of rent for commercial tenancies involving small and medium sized businesses
- Rental increases are also banned for commercial and residential properties for six months
- The Victorian Government will create an $80 million rental assistance fund for renters facing hardship to due to Coronavirus
- $420 million in land tax relief. If a landlord provides tenants impacted by coronavirus with rent relief, they will be eligible for a 25% discount on their land tax, while any remaining land tax can be deferred until March 2021
- Tenants and landlords who struggle to agree a deal over rent reductions will be given access to a fast-tracked dispute resolution service, with Consumer Affairs Victoria or the Victorian Small Business Commission
My tenant says they can’t afford to pay the rent because of coronavirus (COVID-19). What can I do?
Under the new laws, your tenant will not be able to stop paying the rent. But they will be entitled to:
- Apply to leave the tenancy if they want to for financial hardship, without paying fees for breaking the lease; or
- Stay and negotiate a rent reduction with you.
Under this reform, landlords will not be able to evict tenants, except in specific exceptional circumstances (including if tenants damage the property, use it for criminal activity, or serious violence occurs).
You will still have the same responsibilities to your tenant that currently exist under your lease, including carrying out repairs.
The new laws will apply from 29 March 2020. This means that you cannot serve a notice to vacate from that date.
What financial help is there for me as the landlord?
Contact your insurance and mortgage providers to determine the terms covering your situation.
Your tenants may be eligible for support under a new and dedicated $80 million in rental assistance for those facing financial hardship. Tenants may be entitled to up to $2,000 from the Victorian Government, to help cover any shortfall in their rent. This money is paid directly to you.
If you agree to reduce the rent, you may also be eligible for a 25 per cent land tax reduction. A deferment to 31 March 2021 may also be possible.
How do I work out the rent reduction amount?
If your tenant approaches you seeking a rent reduction:
- Work out what rent reduction is possible in your financial position and negotiate a rent reduction with the tenant
- Take into account other support you may have access to such as mortgage relief from your bank
- Check the details of your insurance policy
- Investigate state government schemes that may be available such as land tax relief, if you agree to a reduced rent amount
After you’ve done that, you should contact your tenant as soon as possible. Negotiate with them to reach an amount of rent that is acceptable to both of you. When you settle on an amount, get the agreement in writing.
What if my tenant and I can’t agree on a rent reduction?
If you’re still not able to reach an agreement, you will be referred you to our dispute resolution service.
These services are free. Accredited mediators will help you and your tenant agree on a payment plan. If you still can’t reach an agreement, the disputes resolution team will be able to issue a binding order, setting out the terms of a rental agreement.
How long will my new rent be frozen for?
The laws will remain in effect for six months to 26 September 2020. You will not be able to increase the rent during that time.
Can I end the tenancy early?
In limited circumstances a landlord or tenant may apply to end the tenancy. These include, financial hardship, where the property is not fit for habitation, the landlord has sold the property or needs to move in, or either party puts the safety of others at risk or there is malicious damage to the property. Special circumstances will apply for situations of family violence.
What measures are proposed to help commercial tenants?
- A six-month moratorium on commercial tenancy evictions from 29 March 2020 for the non-payment of rent for small to medium enterprises with an annual turnover under $50 million that have experienced a minimum 30 per cent reduction in turnover due to coronavirus (COVID-19)
- Freeze on rent increases during the moratorium for commercial tenants
- A rental payment waiver or deferral proportionate to commercial tenants’ income reduction due to coronavirus (COVID-19), to be negotiated between tenant and landlord
- A mediation service for commercial tenants and landlords to support fair tenancy negotiations
The Victorian Government will also provide land tax relief to commercial landlords that provide rent relief to their tenants, provided:
- The tenant’s annual turnover doesn’t exceed $50 million
- Is an eligible business in the Commonwealth’s JobKeeper program, and
- Is suffering financial stress or hardship as a result of the pandemic.
Where can I learn more?
To stay updated on changes to renting laws and to be notified when the Victorian services are available, subscribe to their email list.
You can also ask questions, including registering your interest, by lodging an enquiry.
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