Victoria extends stay on evictions, offers landlords new grants

Victorian landlords will be able to access rent relief grants of up to $3,000, under a new support scheme introduced after the state government extended its moratorium on evictions and rental increases until the end of the year.

The moratorium was intended to be shelved in September after being put in place in March alongside a suite of other measures designed to ensure tenants did not lose their home or workplace because of the COVID-19 pandemic.

To support landlords and tenants, Victoria has expanded its Rental Relief Grant program, with eligible applicants to receive up to $3,000 in rental payments

Land tax discounts have also been doubled from 25 per cent to 50 per cent, to provide relief for residential and commercial landlords.

The Victorian government has also put in place a $60 million fund for small commercial landlords to access grants, also capped at $3,000.

“No one should have to be worried about losing a roof over their head right now,” Victorian Premier Daniel Andrews said in a statement.

“This will give tenants certainty and security that they won’t lose their home or business while we fight this deadly pandemic.”

Over the past four months, nearly 26,000 agreements for reduced rent have been registered with Consumer Affairs Victoria, with advice and dispute resolution services accessed more than 80,000 times.

CAV said more than 90 per cent of those contracts had found solutions, with more than 8,400 cases resolved through its Residential Tenancies Dispute Resolution Scheme.

Banks have been encouraged to work with their customers, both residential and commercial, struggling to repay mortgages because of COVID-19.

A $600,000 funding package will be created to ensure advocacy groups can continue to represent vulnerable clients, with Tenants Victoria, the Victorian Council of Social Service, Financial Counselling Victoria and Registered Accommodation Association Victoria to provide training and resources to resolve disputes with landlords.

Property Council of Australia Victoria executive director Cressida Wall said while the lobby group welcomed the additional land tax relief, there were grave concerns on the impacts of the announcement for commercial landlords.

Australian Property Investor Magazine reported earlier this year that the first round of protection measures for commercial tenants placed disproportionate pressure on landlords to bear the cost of providing rental relief. 

Ms Wall said she had similar concerns around the new measures.

“The extension will push many landlords to their limits or beyond,” Ms Wall said. “Landlords cannot keep propping up the system

“As the crisis goes on, we will need goodwill and action from both banks and governments to ensure that these businesses do not go under and take down the economy with them.”

Pitcher Partners director Andrew Clugston also raised concerns with the new scheme, particularly its requirement for commercial landlords to provide rent relief in proportion to the tenant's reduction in income.

"I’m not sure how this can be considered fair if it does not allow the landlord to take into consideration their own financial capacity to provide relief," Mr Clugston said. 

 "In mandating this approach to all situations it suggests that a reduction in turnover is always the most appropriate way to determine the required relief. 

"In our assessment of dozens of request for relief, a decline in turnover was not necessary a reflection of a need for relief.

"A number of business we saw were more profitable and had stronger cash flow due to Jobkeeper and Cashflow boost than they had pre COVID.

"A simple turnover test is not appropriate in many situations - the previous regulations recognised this."