In brief - on 24 April 2020 the Queensland Parliament passed the Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Regulation 2020 (Regulation). The Regulation falls under the umbrella of Part 8 of the COVID-19 Emergency Response Act 2020 (Act) and the Residential Tenancies and Rooming Accommodation Act 2008 (RTRA Act)
The temporary provisions of the Regulation will apply retrospectively from 29 March 2020 and will cease to have effect on 31 December 2020.
Application
The Regulation applies to:
-
All residential tenancy agreements and rooming accommodation agreements (Agreements) entered into before or after 29 March 2020; and
-
All tenants, lessors, residents and providers and their agents.
COVID-19 excessive hardship
Importantly, the Regulation is limited to tenants who have suffered excessive hardship because of the COVID-19 pandemic. The tenant qualifies as a person suffering excessive hardship if the tenant:
- Suffers from COVID-19;
- Is subject to a quarantine direction;
- Has their place of employment closed, or trade or business that is conducted by their employer is restricted, because of a public health direction;
- Is self-isolating because they are a vulnerable person, live with a vulnerable person or is the carer of a vulnerable person;
- Is prevented from returning home due to a restriction on travel;
- Suffers a loss of income of 25% or more; or
- Suffers a loss of income of less than 25% but the effect of the reduced income means that the rent payable is now 30% or more of their income.
If there is more than one tenant, then there must be a reduction in 25% or more of the combined income of all of the tenants, or the rent payable must be 30% or more of the combined income of all of the tenants.
If a tenant qualifies under one (or more) of the above categories of excessive hardship, the Regulation's protective provisions will apply to the tenant.
Evidence of hardship
In providing evidence of hardship, a landlord may require a tenant to produce evidence of the tenant's claim for hardship provided the requested information is of a similar nature to the information requested by the landlord prior to the commencement of the Agreement (e.g. separation certificate from employer, payslips or a Centrelink statement).
The Regulation imposes a penalty on any person producing a document or providing information that is false or misleading for the purpose of substantiating excessive hardship.
Moratorium of evictions
The Regulation imposes a moratorium on the eviction of a tenant for the failure to pay rent as required under an Agreement provided the failure is due to excessive hardship.
However, the following circumstances do not prevent a landlord from evicting a tenant:
- A breach arising from any reason other than a failure to pay rent;
- A failure to pay rent not arising from excessive hardship due to the COVID-19 pandemic; and
- Where a notice to leave, or order from a tribunal, has been served on the tenant before 29 March 2020.
The moratorium on evictions will cease to have effect on the earlier of 29 September 2020 or the last day of the COVID-19 pandemic (as declared by the Federal Government).
Extending agreements
If an Agreement has a fixed term expiring on or before 29 September 2020 and the tenant is suffering excessive hardship, the landlord must, before the expiry of the Agreement, offer the tenant an extension to 30 September 2020 or an earlier date requested by the tenant with the Agreement to continue on the same terms.
A landlord is not required to extend the Agreement in circumstances where:
- The Agreement ended before 29 March 2020; or
- Any of the following occurred before 29 March 2020;
- The landlord gave the tenant a notice to leave;
- The tenant gave the landlord a notice of intention to leave or for rooming accommodation agreements, terminated the agreement;
- A party applied to the tribunal for a termination order.
Rent
The Regulation also prohibits a landlord from giving the tenant a statutory notice to remedy a breach if the rent has remained unpaid for 7 days and the landlord knows, or should reasonably be aware, that the tenant is suffering excessive hardship.
However, the landlord can still serve the tenant with a show cause notice either requiring the tenant to pay the unpaid rent or inform the landlord that the tenant is suffering from COVID-19 excessive hardship within fourteen days.
The protective provisions of the Regulation do not allow a tenant to unilaterally cease paying rent. In addition, it does not allow a landlord to demand payment of rent and issue a notice to remedy a breach where a tenant has been impacted by COVID-19. If however, a tenant does not give notice of excessive hardship then a landlord is entitled to issue a notice to remedy breach under the RTRA.
The Regulation does not provide express obligations to defer rent or permission to withhold rent, but rather creates a framework for the parties to reach a mutually beneficial resolution. If the parties do not reach a resolution on their own, then either party may make a dispute resolution request, which is discussed below.
Variation agreements
In the event that the rent remains unpaid and the tenant gives the landlord notice that they are suffering excessive hardship, the landlord may request the tenant enter into a variation agreement. A variation agreement will have the effect of either reducing the rent due for a particular period or proposing a payment plan for unpaid rent.
A shortcoming of the Regulation is that the tenant is not obliged to enter into a variation agreement. The remedy of this however, is that where a request is made and agreement is not reached, the landlord may make a dispute resolution request to the Residential Tenancy Authority.
A dispute resolution request will trigger a conciliation conference under the RTRA Act. The Regulation provides that if a resolution is not reached during the conciliation conference, then either party may apply to the tribunal for an order with the powers of the tribunal to remain unchanged. This means the tribunal may make an order requiring payment of the unpaid rent, restraining any action in breach of the Agreement, or to compensate the aggrieved party, to name a few.
Terminating agreements
The Regulation allows a tenant to apply for a termination order provided the tenant has both made a dispute resolution request and the parties did not reach an agreement from the subsequent conciliation.
After this a tribunal may make an order terminating the Agreement for reason that the tenant is suffering excessive hardship. The tenant is not liable to compensate the landlord for any reletting costs but may have limited liability where the lease is terminated under a non-COVID-19 related mechanism.
Inspections, repairs and maintenance
A landlord or its agent must not enter the premises for usual inspections, repairs and/or maintenance if:
- The person at the premises is subject to a quarantine direction;
- The landlord or its agent is subject to a quarantine direction;
- The entry would contravene a public health direction; or
- The tenant refuses entry because the tenant, or another person staying at the premises, is a vulnerable person.
Inspections relating to smoke alarms, safety switches, emergencies, protecting the premises from an imminent threat or where the tenant agrees are exempt from the above restriction.
The Regulation does provide circumstances where the tenant must facilitate a virtual inspection, for example to show a prospective buyer the premises or where the tenant refuses entry because a person staying at the premises is a vulnerable person.
Landlords will therefore be temporarily released/prohibited from undertaking usual maintenance and repair obligations where that obligation is inconsistent with a public health direction or social distancing requirement.
Similarly, if a tenant serves the landlord with a notice to remedy a breach relating to a maintenance and/or repair obligation, the remedy period for the notice is extended to the earlier of the day that the obligation is no longer inconsistent with a public health direction or social distancing requirement, or the day the pandemic ends (as declared by the Federal Government).
For the removal of doubt, the relevant maintenance and/or repair obligations for residential tenancy agreements includes maintaining the premises in a way that it remains fit to live in, maintaining the premises in good repair, dealing with issues of health or public safety and cleaning common areas.
As for rooming accommodation agreements, the relevant maintenance and/or repair obligations include ensuring the resident has access to the room, bathroom, toilet facilities and common areas, ensuring the room is safe and secure and maintaining the common areas and room to a standard, fit for the resident to live in.
For clarity, these are the statutory obligations prescribed by the RTRA Act and the Regulation does not prescribe additional maintenance and/or repair obligations.
Tenancy databases
The Regulation also restricts the publication of personal information where, during the COVID-19 pandemic, either a tenant has failed to pay rent or the Agreement has ended. Essentially, a tenant's personal information is prohibited from being listed on a tenancy database (e.g. Tica), provided the reason for unpaid rent or the ending of the Agreement is due to excessive hardship or the tenant complied with a public health direction.
Penalties
The Regulation provides various penalties that will be imposed on a landlord where the action taken is contrary to the provisions of the Act, such as:
- Evicting a tenant;
- Failing to offer the tenant an extension of the Agreement;
- Listing a tenant on a tenancy database.
What does this mean?
The Act has changed the landscape for parties subject to both residential tenancy and rooming accommodation agreements, and for others associated with the industry such as letting agents and property managers.
Additional financial burdens are likely to be borne by landlords and providers as a result of the operation of the Act, however the intent of the Act is for parties to work co-operatively to negotiate mutually agreeable outcomes, rather than empowering one party to unilaterally determine an inequitable outcome.