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QLD Government introduces Regulations to support residential tenancy relief measures

The Queensland Government has now issued the first of its Regulations under the COVID‑19 Emergency Response Act 2020, dealing with residential tenancy relief[1] during the COVID-19 Pandemic. The Regulation is retrospective and has effect on and from 29 March 2020.

As expected, the Regulation imposes:

  • a moratorium on certain evictions;
  • a moratorium or cap on ‘break costs’, depending on the circumstances;
  • an obligation for landlords to offer to extend residential leases, that would otherwise expire before 29 September 2020, to 30 September 2020 or an earlier date requested by a tenant;
  • restrictions on entry to leased premises for health and safety reasons; and
  • releases landlords from their obligations to undertake routine repairs and maintenance where prevented for health and safety reasons, or the unavailability of qualified personnel or materials.

Perhaps surprisingly, the only issue it does not specifically address is the scope of any rent relief that landlords must offer to tenants, leaving that to negotiation and, if negotiations break down, to dispute resolution via the Residential Tenancies Authority (the RTA).

However, landlords need to bear in mind that, to access the Land Tax relief being offered by the Queensland Government, requires them to comply with the government’s residential ‘leasing principles’. Those leasing principles are largely addressed in the Regulation, except for the lead principle that a landlord must negotiate in good faith with tenants to seek a mutually agreeable resolution if their ability to pay rent is impacted by COVID-19. The obligation to negotiate, though, is implicit throughout the Regulation and is discussed more fully below.

The Regulation protects tenants who are ‘suffering from Excessive Hardship’ i.e. they fall within any of the following circumstances:

  • they have COVID-19, are subject to a quarantine direction or are self-isolating because they are a vulnerable person or live with or care for, such a person;
  • their place of employment has closed or is restricted because of a public health direction (e.g. cafes only being permitted to offer takeaway); or
  • a travel restriction, imposed by law, prevents tenants from being able to work or return home,

and, if a sole tenant, they have suffered a loss of income of 25% or more; if there is more than one tenant, the combined total income of all tenants must have been reduced by 25% or more, or the rent normally payable under the residential tenancy agreement is 30% or more of the combined total income of all the tenants. ‘Income’ is defined as the net weekly income (after tax) of a tenant and includes any governmental financial assistance.

To evidence a loss of income, a landlord is entitled to require evidence from the tenant provided that the evidence is similar in nature to the information a tenant is normally required to provide when seeking to enter into a lease. The Regulation provides examples such as a separation certificate from an employer, confirmation from Centrelink and medical certificates but, clearly, it will also include the right to be given copies of current payslips.

If a landlord doesn’t consider that the evidence provided establishes that the tenant is suffering from Excessive Hardship, it may make a dispute resolution request to the RTA. The RTA can then require the tenant to provide additional evidence to support their claim and, based on that further evidence, advise the landlord whether or not the RTA is satisfied the tenant is suffering Excessive Hardship.

The Regulation also addresses the need for relief for domestic violence victims. It is outside the scope of this article to set out the application of relief in these circumstances[2].

To vary a residential tenancy agreement to provide rent relief, the Queensland Government has introduced an approved form ‘Tenancy Variation Agreement’[3] that must be used to evidence the variation. These Variation Agreements can be entered into at any time as determined by the parties, or they can arise following issue of a Show Cause Notice[4].

If a tenant has failed to pay their rent for at least seven days and the landlord knew, or ought reasonably to have known, that the tenant is or has been suffering Excessive Hardship, the landlord is prohibited from issuing a Notice to Remedy Breach and must issue a Show Cause Notice.

Within 14 days of the tenant having been given the Show Cause Notice, the tenant must either pay the outstanding rent or inform the landlord that the rent is unpaid because the tenant is suffering Excessive Hardship. If the rent is unpaid because of Excessive Hardship, the landlord can request the tenant to enter into a Tenancy Variation Agreement to evidence their agreed negotiations regarding rent relief.

In very limited circumstances, a tenant can terminate their lease for Excessive Hardship, as follows:

  1. negotiations between the landlord and tenant must have broken down (or never started due to the recalcitrance of (presumably only) the landlord);
  2. the tenant must have made a dispute resolution request to the RTA;
  3. despite that resolution request, the parties were unable to reach a conciliation agreement; and
  4. finally, the tenant must have made application to the RTA for a termination order.

The RTA may only make such a termination order if it is satisfied that the tenant has established the ground in the application, including if the tenant is suffering Excessive Hardship.

Prohibition or limitation on ‘break costs’

If a residential tenancy agreement is terminated pursuant to a termination order issued by the RTA, or under the domestic violence provisions of the Regulation, no break costs are payable by the tenant.

In other circumstances, provided that the residential tenancy agreement is for a fixed term, the landlord is permitted to claim reasonable costs incurred for reletting and the tenant terminates the agreement in a way that is not permitted under the Act[5], and:

  1. a sole tenant has suffered a loss of income of 75% or more and has less than $5,000 in savings (whether in case or held in a bank account); or
  2. a multiple tenancy’s occupants have suffered a reduction of 75% or more in the combined total income of all the tenants and, the combined savings of those tenants are less than $5,000,

the break costs are limited to one week’s [pre-relief] rent.

Evictions are prohibited for a failure to pay rent if that failure is caused by the tenant suffering Excessive Hardship. ‘Eviction’ includes coercion, changing the locks or intimidating the tenant.

However, a landlord retains its right to evict if the tenant breaches its lease for a reason other than failure to pay rent, or if the failure to pay rent was not related to Excessive Hardship. Other specific rights of eviction are permitted e.g., if the landlord is selling the property and requires vacant possession, if the property is required by the State for use under a program established under legislation, or if the premises are required for occupation by the landlord or a member of their immediate family.

As with most legislation these days, ‘the devil will be in the detail’. The Regulation permits the relevant Minister to make guidelines providing guidance to persons about the application of the Regulation to the rights and obligations of landlords and tenants during the COVID-19 Pandemic. These guidelines may, or may not, help.

If you require any assistance in relation to COVID-19 and residential tenancy matters or would like to discuss the above issues further, please do not hesitate to contact us.

[1] The Regulation also addresses the rights of Rooming Accommodation residents during the COVID-19 Pandemic in a similar fashion

[2] Should you, or someone close to you, specifically require advice on this issue, please do not hesitate to contact us

[3] which can be found at https://www.rta.qld.gov.au/Newsroom/New-forms-for-COVID19.html

[4] found at https://www.rta.qld.gov.au/Forms-and-publications/Forms/Forms-for-general-tenancies.html

[5] Residential Tenancies and Rooming Accommodation Act 2008

"The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication."