27 April 2020

COVID-19 Regulations – A Summary for Residential Landlords

Bill Purcell
Bill Purcell Property Lawyer

In his latest article, Bill Purcell looks at the Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Regulation 2020 from A Landlord’s Perspective. He discusses the Regulation and its implications on those with a residential tenancy agreement in place. 

This Regulation was made on 24 April 2020 under the COVID-19 Emergency Response Act 2020.

This article seeks to explain the Regulation from the perspective of landlords of residential premises under the RTRA Act (Residential Tenancies and Rooming Accommodation Act 2008) who are parties to tenancy agreements under that Act.

In this article, for simplicity, those types of agreements will be referred to as “tenancy agreements”. Also, the article prefers to use “landlord” to describe a person which is known in the Act as a lessor.

Proposed application to residential tenancies

The Regulation applies to-

  • all residential tenancy agreements entered into before or after 29 March 2020
  • landlords, tenants and their agents involved in those agreements.

Evictions

A landlord (including its agent) must not evict a tenant by reason of its failure to pay rent in accordance with the tenancy agreement if –

  • the tenant is suffering excessive hardship; and
  • the cause of the hardship is the COVID-19 emergency.

To do so would give rise to an offence carrying a maximum penalty of 50 penalty points (currently $6,672.50).

The word “evict” has a very broad meaning and includes, for example, the landlord or its agent –

  • giving a notice to leave;
  • applying to QCAT for an order terminating the tenancy agreement;
  • coercing a tenant into signing an agreement which terminates the tenancy;
  • preventing free access to the subject premises, including by intimidation;
  • causing the tenant to vacate by giving false or misleading information; or
  • causing the tenant to vacate by committing other acts of intimidation.

But a landlord may evict the tenant-

  • for any other reason which would be lawful under the RTRA Act – an example of which would be a tenant’s failure to comply with a notice to remedy a breach within the allowed remedy period; or
  • for failure to pay rent under a Tenancy agreement other than because of excessive hardship caused by the COVID-19 emergency; or
  • if, before 29 March 2020, the landlord gave the tenant notice to leave or applied to QCAT for an order terminating the Tenancy agreement.

The restriction on evictions applies during the period commencing 29 March 2020 and ending on the earlier of –

  • 29 September 2020;
  • the last day of the COVID-19 emergency period.

What is the COVID-19 emergency period

The COVID-19 emergency period commenced on 29 January 2020 and will continue until the relevant Minister puts an end to the declared public health emergency under section 324 of the Public Health Act 2005 (Qld).

Extensions of fixed-term tenancy agreements

Where there is a fixed-term tenancy agreement which will end on or before 29 September 2020 and the tenant is suffering excessive hardship because of the COVID-19 emergency –

  • the landlord must offer the tenant an extension of the term until 30 September 2020;
  • the landlord must make the offer before the term of the tenancy agreement ends;
  • the tenant does not have to pay any costs incurred by the landlord for the extension.

The extension may be for a shorter period if that is requested by the tenant.

When the offer is accepted by the tenant the terms of the tenancy agreement continue to apply.

If a landlord does not offer that kind of extension to the tenant, the landlord will commit an offence for which the maximum penalty is 50 penalty points (see above).

But, if before 29 March 2020 –

  • the tenancy agreement ended; or
  • the landlord gave the tenant a notice to leave; or
  • the tenant gave the landlord a notice of intention to leave; or
  • the landlord (or the landlord’s agent which is a party to the agreement) or the tenant applied to QCAT for a termination order

the landlord is not required to offer the tenant an extension of the term, unless –

  • the landlord’s notice to leave is invalid; or
  • the tenant’s notice of intention to leave is invalid; or
  • the QCAT application is rejected.

None of those three events occurring before 29 March 2020 will bring the tenancy to an end and, consequently, would not relieve a landlord from its obligation to offer to extend the term.

Unpaid rent

When a landlord believes on reasonable grounds that –

  • rent payable under a tenancy agreement has remained unpaid for 7 days; or
  • the tenant has breached another term of the agreement and the breach has not been remedied

Section 280 of the RTRA Act permits the landlord to give the tenant a notice requiring the tenant to pay the rent or remedy the other breach.

However, despite section 280, a landlord must not give the tenant a notice, under that section, to pay rent, but, instead, may give the tenant a show cause notice for the unpaid rent.

The show cause notice for unpaid rent must be in a form which will be approved under the Regulation.

Within 14 days after being given the show cause notice the tenant must –

  • pay the unpaid rent; or
  • tell the landlord that the reason for non-payment is that the tenant has been or is suffering excessive hardship because of the COVID-19 emergency.

If the tenant takes neither of those steps, the landlord may give the tenant a notice under section 280 requiring the tenant to pay the unpaid rent.

If the tenant is given a show cause notice and –

  • does not pay the unpaid rent within 14 days; and
  • tells the landlord (as mentioned above) that the reason for non-payment is that the tenant has been or is suffering excessive hardship because of the COVID-19 emergency

the landlord may request the tenant to enter into an agreement varying the tenancy agreement.

Tenancy variation agreements

A landlord and tenant may enter into a tenancy variation agreement which provides for a rent reduction for a stated period or a payment plan for unpaid rent.

The tenancy variation agreement must be in a form which will be approved under the Regulation and must be signed by the landlord and the tenant.

A tenancy variation agreement may exclude, change or restrict the application or operation of any provision of the RTRA Act and may be entered into at any time.

Conciliation of dispute about unpaid rent.

A landlord or a tenant may make a dispute resolution request to the Residential Tenancies Authority to try to resolve a dispute over unpaid rent under the RTRA Act if –

  • the landlord has requested the tenant to enter into a residential variation agreement, as mentioned above; and
  • the landlord and the tenant are unable to agree upon such an agreement.

Rent decreases under a residential tenancy variation agreement

If a variation agreement reduces the rent for an agreed part of the term of the tenancy agreement and rent is increased when the rent reduction period ends, the provisions of the RTRA Act which control rent increases will apply. Those provisions prescribe what landlords must do if they propose to increase rent; and permit tenants to apply to QCAT for an order to reduce or set aside the rent increase.

But those provisions will not apply so as to prevent the rent returning to the amount payable under the tenancy agreement before the variation agreement was signed by the landlord and the tenant.

Tenant’s failure to leave because of unpaid rent

If a landlord –

  • gives a tenant a notice to leave because of an unremedied breach; and
  • makes an application to QCAT for a termination order because of the tenant’s failure to leave

QCAT must not grant the application if –

  • the unremedied breach relates to unpaid rent in breach of the residential tenancies agreement; and
  • the rent is unpaid because the tenant has been or is suffering excessive hardship because of the COVID-19 emergency.

Rental bonds

The maximum penalty bond payable under a residential tenancy agreement is the aggregate of four weeks rent.

The RTRA Act makes it an offence for a person, for example, a landlord or landlord’s agent, to require payment of or accept a rental bond which exceeds the maximum permitted by the Act.

That Act makes provision for the amount of a rental bond to be reduced and the amount of the reduction to be paid to a tenant when, during the first 6 months of the term of the tenancy agreement, the rent payable decreases or is decreased.

That provision will not apply if, before the COVID-19 emergency period, a rental bond under a tenancy agreement has been paid in accordance with the RTRA Act and-

  • is not more than the maximum permitted under the Act, and
  • during that period the rent payable under the tenancy agreement decreases.

Entry to the premises

A landlord or its agent may enter premises –

  • to comply with the Fire and Emergency Services Act 1990, in relation to smoke alarms;
  • to comply with the Electrical Safety Act 2002, in relation to approved safety switches;
  • if the tenant agrees;
  • in an emergency;
  • if it is believed, on reasonable grounds, that entry is necessary to protect the premises or contents from imminent or further damage.

Entry for any other reason which normally would be permitted under the RTRA Act is prohibited if –

  • a person at the premises is subject to a quarantine direction by the Chief Health Officer under the Public Health Act 2005 (Qld); or
  • the landlord or its agent is subject to a quarantine direction; or
  • the entry would contravene a public health direction by the Chief Health Officer under the Public Health Act 2005 (Qld); or
  • the tenant refuses entry because any person staying at the premises is a vulnerable person.

For the purposes of the Regulation, a vulnerable person is a person –

  • over the age of 70 years;
  • over the age of 65 years who has an existing health condition or a combination of health conditions;
  • who is an Aboriginal or Torres Strait Islander who suffers from those types of conditions.

Virtual inspections

If  –

  • a landlord or its agent wishes to enter premises to inspect them or to show them to a prospective buyer or tenant; and
  • the tenant refuses entry because a person staying at the premises is a vulnerable person

the tenant must allow the landlord or its agent to conduct an inspection by –

  • virtual inspection – an electronic means of conducting visual inspection;
  • video conferencing;
  • giving access to photographs or videos sufficient to enable a judgement to be made on the condition of the premises and contents.

Repairs and maintenance

The RTRA Act imposes obligations on landlords while a tenancy continues (“statutory obligations”). For example, they included obligations in relation to maintenance and repair.

If a statutory obligation is inconsistent with a public health direction or social distancing, the landlord does not have to comply with it to the extent of inconsistency, unless it is an obligation to make emergency repairs.

If the Regulation does not permit entry to undertake a statutory obligation, the landlord does not have to comply with it until the landlord may enter the premises, lawfully.

If the Regulation permits a landlord to undertake a statutory obligation in relation to repairs or maintenance and –

  • another person, for example, a tradesperson, is needed to undertake the repairs or maintenance is not available; or
  • the supplies which are needed for the repairs or maintenance are not available

the landlord is released from the statutory obligation during the period of such unavailability.

A landlord need not comply with a tenant’s notice to remedy breach if the Regulation releases the landlord from doing so.

Landlords’ breaches

If a tenant gives its landlord a notice to remedy a breach which relates to an obligation from which the landlord is released, the period of time which the notice gives (“allowed remedy period”) is extended until the earlier of the day when –

  • a public health direction or social distancing stops applying to what needs to be done to comply with the notice;
  • the COVID-19 emergency period ends.

If the breach relates to an obligation to undertake repairs or maintenance and the tradesperson or necessary supplies are not available, the allowed remedy period is extended until the earlier of the day when –

  • the tradesperson or supplies become available;
  • the COVID-19 emergency period ends.

Termination by landlords wanting to sell

If a landlord –

  • is preparing to sell the premises with vacant possession; or
  • has entered into a contract to sell the premises with vacant possession

the landlord may give notice to leave the premises to the tenant.

That notice to leave must be in a form which is approved under the RTRA Act.  The notice must be accompanied by the evidence which the form requires and must otherwise be given in accordance with section 326 of the Act.

The notice must state the date upon which the tenant must vacate the premises (“handover day”) and the handover day –

  • must not be earlier than 2 months after the notice is given to the tenant; and
  • may be earlier than the end of the term, in the case of a fixed term agreement.

Termination by landlords for a State government program

If premises are required for use of a program administered under a Queensland legislation, the landlord may give the existing tenant notice to leave. Section 326 of the RTRA Act will apply and the handover date must not be earlier than 2 months after the notice is given to the tenant.

Termination for occupation by landlords

 If a landlord or a member of his or her immediate family needs to occupy premises, the landlord may give notice to leave to the tenant. The expression “immediate family” means a landlords’ spouse, child, parent or another person who normally lives with and is financially dependent upon the landlord.

Section 326 of the RTRA Act will apply and the handover date must not be earlier than 2 months after the notice is given to the tenant.

Termination without grounds

Under section 291 of the RTRA Act, a landlord may give notice to leave to a tenant without stating a ground for the notice.

Under the Regulation, a landlord must not give a notice of that kind if the tenant is or has been suffering excessive hardship because of the COVID-19 emergency.

But if a notice to leave without grounds is given in contravention of the Regulation, it may take effect at the end of the COVID-19 emergency.

Failure to leave

 A landlord may apply to QCAT for a termination order if the tenant has –

  • been given notice to leave under the Regulation; and
  • failed to handover possession in accordance with the notice.

The application must be made within 2 weeks after the handover date which is stated in the notice and the provisions of the RTRA Act which relate to an urgent application will apply.

Misuse of notice to leave

If a residential tenancy comes to an end as a consequence of a notice to leave being given because of an intended or actual sale or because of the need for owner occupation, the landlord will commit an offence under the Regulation if, without reasonable excuse –

  • the landlord includes information in the notice that is false or misleading in a material particular; or
  • the landlord lets the premises to someone other than the existing tenant.

The maximum penalty for the type of offence is 50 penalty points (see above).

Reasonable excuse would include the cancellation of a sale contract or a job transfer.

Notices of intention to leave

This topic will be discussed in a later article which will examine the Regulation from a tenant’s perspective.

Termination for excessive hardship

The Regulation deals with applications for termination of tenancy agreements by tenants suffering excessive hardship because of the COVID-19 emergency.

That topic will be discussed in a later article which will examine the Regulation from a tenant’s perspective.

Reletting costs

The RTRA Act permits landlords to recover reletting costs from tenants in certain circumstances. But, the regulation overrides those provisions to some extent and puts a limit on any amount which would otherwise be payable under the Act.

That topic will be discussed in an article which will examine the Regulation from a tenant’s perspective.

Tenancy databases

Under the RTRA Act there is provision about the recording of personal information about tenants in tenancy databases.

Personal information means information or an opinion, whether or not true about a person whose identity is apparent or can be ascertained from the information or opinion.

The regulation makes it an offence for any person (for example, a letting agent) to list personal information in a tenancy database, if –

  • the information relates to the failure to pay rent under a tenancy agreement or the termination of the tenancy agreement during the COVID-19 emergency; and
  • the failure or termination was because the personal information related to a person (for example, a tenant) suffering excessive hardship because of the COVID-19 emergency or such person complying with a public health direction.

The maximum penalty for that type of offence is 20 penalty units ($2,669.00).

A landlord or a landlord’s agent which lists personal information in tenancy databases will not commit an offence if the person who owns information does not inform them of those circumstances.

Summary offences

A proceeding for an offence against the Regulation may be taken within 2 years after the commission of the offence.

Ministerial guidelines

The relevant Minister may make guidelines to provide guidance to persons about the application of the Regulation to the rights and obligations of landlords and tenants under the RTRA Act as modified by the Regulation

Those guidelines must be consistent with the Act and the Regulation.

If any landlords with require assistance in negotiating commercial leasing relief, then please contact Bill Purcell, Jacob Duane or Daniel Ronan in our Property and Real Estate team.

 

 


Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).

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