Moratoriums are over, but landlords face new rules and restrictions

Eviction moratoriums and holds on rent increases have been wound back across Australia, but landlords in some states are grappling with new rules and regulations in regards to how they deal with non-paying or late paying tenants. 

Put in place to assist tenants whose incomes were affected by the pandemic, the end of the moratoriums has been welcome news to landlords across Australia, who in many cases were left to bear the financial cost of providing rental support.

But while tenants can again be evicted and rents can be put up, most Australian states have put in place new rules and regulations governing the dynamics between landlords and renters.

One of the most impactful changes has occurred in Victoria, where a recent overhaul to the state’s Residential Tenancies Act significantly altered the landscape for landlords dealing with non-paying tenants. 

Part of a comprehensive suite of reforms that took effect at the end of March is the introduction of a ‘strike system’ to respond to repeated late or non-payment of rent.

For repeated rental arrears, if a tenant owes 14 days or more rent the landlord can give them 14 days notice to vacate, but if the outstanding amount is paid within a 14 day period, the eviction process will not proceed.

That process would apply for the first four times a tenant is given notice to vacate over a 12 month period, while if the tenant is in arrears for a fifth time in a year, the notice to vacate would be valid whether or not they repay the rent within 14 days.

If the tenant does not vacate within the 14 day period the landlord can apply to the Victorian Civil and Administrative Tribunal to evict the tenant, an application VCAT cannot dismiss on the grounds that the tenant can pay back the rent on a payment plan.

In the case of non-payment of rent, if a tenant has been issued with a notice to vacate and has not paid back the full amount within 14 days, the landlord can also apply to VCAT to evict the tenant, regardless of how many strikes they have received.

VCAT will assess the possibility of placing the tenant on a payment plan to repay the overdue amounts, and if that occurs, the eviction will not proceed.

An eviction will occur if a payment plan is not a feasible option or if the renter does not make payments on their repayment plan.

North of the border in New South Wales, the state government’s latest COVID support legislation has drawn the ire of the state’s peak real estate body.

REINSW chief executive Tim McKibbin said a new bill recently passed in NSW Parliament, which included a six-month transition period to ensure tenants in rental arrears were protected from eviction, did nothing to lift the financial burden on landlords.

If a tenant falls into rental arrears in the transition period, the NSW Department of Fair Trading will assist to negotiate a rental repayment plan.

Landlords would only be able to evict tenants if they can demonstrate that they have attempted to negotiate a repayment plan in good faith, while it also must be proven that it is fair and reasonable to evict.

In Western Australia, the moratorium on evictions and rental increases expired on March 28, with a Residential Rent Relief Grant Scheme put in place by the state government to assist tenants.

WA rental markets are among the tightest in the country in terms of vacancy rates, with competition for available properties pushing up median rents in Perth by $40 per week year on year.

Tenants facing a rental increase of more than 5 per cent per year can apply for the rental assistance if their landlord agrees to a fixed-term six month lease.

The grant is capped at $2,000 per tenancy.