Residential tenants given three months to repay accrued debt: ACT government

Residential tenants have been provided a three-month grace period until January 31 to repay any rental arrears accrued because of the pandemic before they face eviction, according to changes to the Residential Tenancies (COVID-19 Emergency Response) Declaration 2020.

ACT Attorney-General Gordon Ramsay amended the declaration this week after the territory government extended the moratorium period for rental evictions to October 22. The changes were in place to support tenants during the pandemic.

From October 23, any tenants who are unable to meet their rent repayments will have until January 31 to repay any rental debt that they accumulated before or during the moratorium period. During the three-month grace period, tenants cannot be evicted from the property.

However, this will only be applicable to residential tenants who were impacted by the COVID-19 crisis and pay their rent after October 23 when it’s due.

“This will provide tenants with more time to recover financially and allow them to enter into a payment plan with their landlords,” an ACT government spokesperson said.

If tenants are unable to make payments after January 31, the ACT Civil Administrative Tribunal would be required to consider a payment order for impacted tenants, rather than ordering an eviction.

From September 13, all tenants on fixed-term and periodic tenancies will also be able to pay just two weeks’ rent in advance to assist to manage cost of living pressures.

The ACT government has also extended its landlord tax rebate scheme by a further three months. The scheme offers land tax rebates to landlords who reduce their tenants’ rent by at least 25 per cent.

The Real Estate Institute of the ACT welcomed the transitional period to enable tenants to repay arrears but raised concerns for those tenants who did not have the ability to repay the debt because of the pandemic.

REIACT submitted a rent assistance proposal in August in response to the draft measures presented to them by the territory government.

Under the proposal, rental assistance would be provided to “those most vulnerable tenancies in arrears, whilst also ensuring landlords would have a mitigated loss of 25 per cent of the total arrears owing”.

“The transition process now implemented by the government will require impacted tenants who are unable to maintain rent and arrears payment plans after October 22 to appear before ACAT on two occasions, with eviction the only certainty under the amendments,” REIACT chief executive Michelle Tynan said.

Ms Tynan also acknowledged that many landlords “simply cannot afford to continue to offer reduced or deferred rent indefinitely”. 

“For the past six months their costs have not reduced, yet the ACT government expects the goodwill of landlords to continue to be a viable option,” she said.

REIACT called on the government to take into consideration landlords and tenants when the federal government’s stimulus package decreases at the end of this month.

“We are concerned that this will further exacerbate the need for rental assistance for some tenants as the current stimulus has enabled them to meet their commitments thus far,” Ms Tynan said.

Mr Ramsay’s made comments last year, after he announced a number of changes to the Residential Tenancies Act, stating: “As more and more people choose to rent it’s important that they have the appropriate safeguards to feel established and comfortable in their home”.

“The amendment announced by the Attorney General yesterday has certainly removed any such safeguards for those tenants now impacted COVID-19,” Ms Tynan added.

REIACT also raised concerns on the number of landlords listing properties for sale, noting that there’s been a sharp increase in the number of investors leaving the ACT market.

“With an already critically low vacancy rate and the ACT being the only jurisdiction nationally to experience a decline in the affordability of rent in the June quarter, affordable rental properties in Canberra will continue to decrease,” Ms Tynan said.

“The combination of this and yesterday’s amendment announcement by ACT government will most certainly add further pressure to the already struggling community housing and welfare providers.”