Amid the COVID-19 pandemic facing the world globally right now, it is important that tenants and landlords for both commercial and residential leases, stay updated and know their rights as we navigate through this unprecedented and unpredictable time.
Can my landlord evict me during the coronavirus pandemic?
On 29 March, the federal government announced a six-month moratorium on evictions for all residential and commercial tenants that are in financial distress and unable to meet their commitments due to the impact of coronavirus. This new decision will allow tenants with commercial or residential leases to maintain their occupancy if they can identify the virus as the cause of their financial hardship and issues related to their rental situation.
It is important to note however that the moratorium does not mean that amounts due and payable under an existing lease or tenancy agreement are not payable, or that failure to pay an amount when due will not amount to a default. The moratorium simply restricts a landlord from evicting a tenant for non-payment during the 6-month moratorium where the virus has impacted the tenant’s ability to pay.
However, landlords can exercise other rights, including taking legal action against a tenant and/or a guarantor in the event that the tenant defaults in its obligations.
In an effort to avoid an increase in litigation in this area, the government have announced that measures will be put in place by way of regulation to encourage agreements between landlords and business owners who have been forced to close their doors temporarily, as part of the idea of ‘hibernating’ businesses until the coronavirus crisis passes.
It is important that if you are a tenant and cannot pay an amount due and payable under your lease that you reach out to your landlord to try and negotiate an alternative arrangement.
Likewise, if you are a landlord and your tenant is unable to pay an amount due and payable under the lease the federal government is requesting that you work with your tenant to negotiate an alternative arrangement.
State governments are also currently considering income tax cuts and other assistance for landlords who reduce rental amounts that tenants must pay, although the nature of that help is still being negotiated.
Tips to navigate this difficult time:
- Communication is key – If you think that you will be unable to make your next rental payment, you should immediately communicate this to your landlord and/or agent. This is the first step to minimising a potential fallout due to your recent business closure or change in employment situation.
Although the landlord is not obligated to waive or reduce your rent, it is encouraged that landlords are compassionate with tenants affected by the pandemic and in some circumstances, they may be able to assist. It is important that any payment plan agreed with your landlord should be put in writing.
- Check if your eligible for Rent assistance, unemployment benefits or government funding – At the federal level, the government offers rent assistance to eligible renters. You typically need to be receiving government support already to qualify. You may also be eligible for the Job Seeker or Job Keeper measures which has been implemented due to COVID-19.
Landlords should also suggest that their tenants explore any grants made available to small businesses under the stimulus measures that have recently been announced.
That said, caution needs to be applied where advice is given as the Australian Securities and Investment Commission (ASIC) have recently issued a warning to the Real Estate Institute of Victoria (REIV) that certain advice may be considered financial advice and must only be given by a financial adviser.
- Contact your bank – If you are a property owner, lenders have expanded their hardship assistance programs and most banks are now offering their customers in need of support due to COVID-19, the chance to defer their mortgage repayments for up to six months.
- Contact SLF Lawyers – If you are a landlord or a tenant and are concerned that you or your business may be adversely affected as a result of COVID-19, if you need assistance in negotiating your existing leasing arrangements or if you need any other legal advice please contact us on 9600 2450.
Article written by Lucy Young.