Business Daily Media

What if I can't pay my rent? These are the options for rent relief in Australia

  • Written by Mark Giancaspro, Lecturer in Law, University of Adelaide

You’ve lost income because of the coronavirus crisis and finding it hard to pay the bills. What if you can’t pay your rent?

The short answer, if you live in Australia, is that rules changes give you more time – at least six months – before you face eviction.

But that’s all. Nothing else has changed. As Prime Minister Scott Morrison has said[1], the moratorium on evictions “doesn’t mean there’s a moratorium on rents”.

Read more: The insecurity of private renters – how do they manage it?[2]

Whatever rent you don’t pay you will still owe, with consequences eventually.

There’s unlikely to be any other national assistance for residential tenants along the lines the commercial tenancy market might get[3].

But there may be other assistance on offer according to your state and territory. In Queensland, for example, you may be eligible for a one-off rental payment.

So this is how your options stand.

Eviction moratorium

The National Cabinet – incorporating the federal cabinet and state and territory leaders – announced the eviction moratorium on March 29[4]. Rental law is a state and territory matter, so legal enforcement depends on these governments enacting legislation.

Tasmania was the first to do so[5], pre-empting the National Cabinet decision with a four-month ban on evictions. It’s likely a good indication of what other states and territories will do.

The Tasmanian legislation prohibits commercial and residential landlords from serving notice to vacate for rent arrears for the duration of the “emergency period”, unless:

  • the lease is non-fixed term and property is being sold (with notice being served before April 3)
  • the Residential Tenancy Commissioner orders termination because of “severe hardship” to either party.

Severe hardship is an established part of tenancy law. It allows parties to apply for a fixed-term lease to be terminated without penalty. It is possible a landlord could argue financial hardship based on needing rent to cover their own debts, but commissioners (or tribunals in other jurisdictions) are likely to scrutinise such applications closely.

(Severe hardship is discussed further below, under “What if I want to break the lease?”).

What if I don’t pay my rent?

If you don’t pay your rent, your debt will keep accruing. Once the moratorium ends, you face eviction.

Your landlord will have the right to keep your bond to cover the rent. If you owe more, they can chase it up through debt collectors or file court proceedings. If this happens, your personal credit rating[6] could take a hit, and costs may be added to any judgment against you.

So take the Prime Minister’s advice[7]: negotiate with your landlord or agent.

Try to work out an arrangement both sides can live with. Remember, many private landlords rely on rent to pay the mortgage. Even with the major banks offering mortgage relief[8] during coronavirus crisis, the interest on that debt will keep accruing.

Can I get any rent assistance?

There are generally no special provisions for rent assistance during the coronavirus crisis.

So far only Queensland[9] is offering any form of special rental assistance – a one-off payment of up to $2,000, paid directly to your lessor. To be eligible, you must have lost your job due to the pandemic and have applied to Centrelink for income support.

In other states the usual rules for rent assistance[10] apply. You need to first qualify for Centrelink income support, such as the JobSeeker payment, Youth Allowance or the Parenting Payment. Centrelink provides up to A$139 a fortnight if you’re single, and A$164 for a couple with two children.

What about a rent reduction?

As mentioned, there’s no sign there’ll be direct subsidies for residential tenants, though there may be a national package to reduce commercial rents.

link text[11]

The closest thing so far announced is the Australian Capital Territory’s[12] encouragement to residential landlords to lower rents by at least 25% through direct tax relief equal to half the discount (up about $100 a week). The scheme is voluntary, so it remains to be seen how effective it will be.

What if I want to break the lease?

If you’re not on a fixed-term lease, but a monthly or weekly tenancy, you simply have to give the required notice to the landlord (usually 21 days).

If you’re on fixed-term lease, state and territory laws allow both tenants and owners to apply to break the lease without penalty if its continuation causes “severe hardship”.

But this option “should be seen as a last resort,” advises[13] the Tasmanian government. “It is best to maintain a positive relationship between owners and tenants. The best way to do this is for owners and tenants to discuss their concerns.”

It is possible your lease may contain a force majeure clause providing for suspension or termination when unforeseeable events (for which neither party is responsible) occur. Unfortunately, such clauses are extremely rare in leases, and unlikely to cover pandemics.

Is there anything else to consider?

Any time you miss a rent payment, you risk going on a “black list” – a privately owned tenancy database[14] that real estate agents use to screen tenants. Any bad payment history can mean a black mark on a future rental application.

So the bottom line: talk with your landlord.

References

  1. ^ Prime Minister Scott Morrison has said (www.theguardian.com)
  2. ^ The insecurity of private renters – how do they manage it? (theconversation.com)
  3. ^ might get (www.pm.gov.au)
  4. ^ on March 29 (www.abc.net.au)
  5. ^ to do so (www.cbos.tas.gov.au)
  6. ^ credit rating (www.canstar.com.au)
  7. ^ advice (www.afr.com)
  8. ^ major banks offering mortgage relief (www.ausbanking.org.au)
  9. ^ Queensland (www.qld.gov.au)
  10. ^ rent assistance (www.servicesaustralia.gov.au)
  11. ^ link text (theconversation.com)
  12. ^ Australian Capital Territory’s (www.abc.net.au)
  13. ^ advises (www.cbos.tas.gov.au)
  14. ^ privately owned tenancy database (www.choice.com.au)

Authors: Mark Giancaspro, Lecturer in Law, University of Adelaide

Read more https://theconversation.com/what-if-i-cant-pay-my-rent-these-are-the-options-for-rent-relief-in-australia-135312

Business Today

Hunt and Brew launches Australia-first cold brew coffee

Australian boutique coffee maker Hunt and Brew has announced it will be sourcing the beans for its new “Australia” cold brew coffee from far north Queensland in a move that will make the company one of the largest buyers of ...

What you need to know about the Defense Production Act – the 1950s law Biden invoked to try to end the baby formula shortage

Biden invoked the Defense Production Act to help end the shortage of baby formula. AP Photo/David J. PhillipU.S. President Joe Biden on May 18, 2022, announced he is invoking the Defense Production Act to help end the shortage of ...

Baby formula industry was primed for disaster long before key factory closed down

Cities are trying to address the baby formula shortage with community drives.AP Photo/David J. PhillipThe conditions that led to a shortage of baby formula were set in motion long before the February 2022 closure of the Similac fa...

Utilising communication tech to alleviate employee burn out

Hybrid work solidified into the business model in 2021 – plain and simple. Jabra research revealed 42 per cent of employees last year requested leadership to help make their virtual workspace more comfortable. Employees are ...

Space Machines readies for liftoff securing launch services deal with SpaceX

SpaceX to carry Space Machines' Optimus Orbital Transfer Vehicle as part of its April 2023 mission. Optimus is one of the largest spacecraft built in Australia and furthers Australia’s sovereign capabilities toward in-space...

Deliver business benefits through operational excellence

As Australian businesses emerge from the pandemic lockdowns and draw up plans for growth, increasing numbers are adopting a strategy of operational excellence. Operational excellence involves everyone in an organisation and f...

Business Daily Media Business Development

Hunt and Brew launches Australia-first cold brew coffee

Australian boutique coffee maker Hunt and Brew has announced it will be sourcing the beans for its new “Australia” cold brew coffee from far north Queensland in a move that will make t...

NewsServices.com - avatar NewsServices.com

Utilising communication tech to alleviate employee burn out

Hybrid work solidified into the business model in 2021 – plain and simple. Jabra research revealed 42 per cent of employees last year requested leadership to help make their virtual wo...

David Piggott, Managing Director ANZ at Jabra - avatar David Piggott, Managing Director ANZ at Jabra

Space Machines readies for liftoff securing launch services deal with SpaceX

SpaceX to carry Space Machines' Optimus Orbital Transfer Vehicle as part of its April 2023 mission. Optimus is one of the largest spacecraft built in Australia and furthers Australia’...

Business Daily Media - avatar Business Daily Media

India's employee hostels are often like prisons – but young women garment workers don't always see it that way

Kavitha, 18, earns a living at a clothing factory in the southern Indian state of Tamil Nadu. Like many of her colleagues, she lives in accommodation provided by the factory, where she share...

Andrew Crane, Professor of Business and Society, University of Bath - avatar Andrew Crane, Professor of Business and Society, University of Bath

Shortage of workers threatens UK recovery – here’s why and what to do about it

For the first time since records began, there are more job vacancies in the UK than unemployed people, according to the latest monthly labour market figures. This has been driven mainly by a...

Donald Houston, Professor of Economic Geography, University of Portsmouth - avatar Donald Houston, Professor of Economic Geography, University of Portsmouth

A central bank digital euro could save the eurozone – here's how

Blockchain bailout?4K_HeavenThe European Central Bank and its counterparts in the UK, US, China and India are exploring a new form of state-backed money built on similar online ledger techno...

Guido Cozzi, Professor of Macroeconomics, University of St.Gallen - avatar Guido Cozzi, Professor of Macroeconomics, University of St.Gallen



NewsServices.com

Content & Technology Connecting Global Audiences

More Information - Less Opinion