COVID-19: Victoria’s Rent Relief Package

The news everyone in Victoria’s rental industry has been waiting for – the announcement of a Rent Relief Package.

 

Victoria's Premier Daniel Andrews

 

On Wednesday 15th April 2020, Victorian Premier Daniel Andrews announced his plans to pass a legislation on a Rent Relief Package.

 

On Thursday 23rd April 2020, the Rent Relief Package was passed by Victoria’s Parliament as a part of the COVID-19 Omnibus Bill.

 

This $500 million package comprises of a Land Tax Relief for landlords, and a Rental Stress Relief for tenants.

 

On top of this package, he also clarified some points in regards to residential tenancies and commercial tenancies for small to medium businesses. These two points will be effective as of 29th March 2020 for the next six months:

  • Frozen rent – no rent increase within the next 6 months
  • Moratorium on evictions – landlords cannot evict tenants who cannot pay rent due to being impacted from COVID-19

 

 

Rent Relief Package – Land Tax Relief

$420 million of the package will be going towards Land Tax Relief.

 

Landlords who have provided rent relief towards their tenants affected by COVID-19 will be entitled a 25% discount on their land tax.

 

Any remaining land tax will also be deferred until March 2021.

 

 

Rent Relief Package – Rental Stress Relief

$80 million of the package will be going towards Rental Stress Relief.

 

The one-off rental grant of up to $2000 will be paid directly to a tenant’s agent/lessor/landlord to contribute towards a tenant’s rental payment. The grant will be used as credit for rental payments at the reduced rent.

 

To be eligible for this grant, tenants who have been facing hardship due to COVID-19 must have:

  • Registered their revised rental agreement to Consumer Affairs Victoria, gone through a meditation process with their landlord/agent, or is subject to a Victorian Civil and Administrative Tribunal decision
  • A bond registered, or soon to be registered, with Victorian Residential Tenancies Bond Authority
  • Less than $5000 in savings
  • An annual household income of less than $100,000 (equal to less than $1903 per week)
  • At least 30% of their income being paid towards rent

 

This grant is not limited to just Australian citizens or permanent residencies. Applicants that may be eligible include: casual workers on holiday and working visas, skilled visas, seasonal workers, New Zealand citizens and all refugee and temporary protection visa holders.

 

Tenants living in a multi-occupancy house and share a lease will also be eligible. If eligible, the grant will cover the tenant’s portion of the rent.

 

Once a revised rental agreement has been lodged to Consumer Affairs Victoria, an email will be sent if additional information is required. The additional information must be provided within 14 days of the email sent. If the application is successful, the rental relief payment will be processed within 2 weeks.

 

 

Agreement/Mediation between Tenant and Landlord for Rent Relief Package

 

For Tenants:

All tenants should still be paying for rent. It is a breach of their tenancy agreement if they do not pay rent as per their tenancy agreement. Should any tenant become unable to pay for rent, they should:

 

1. Calculate their current reduced income and determine how much rent they can afford

Tenants should first calculate their current reduced income and determine if they can still afford rent after a rent reduction. In some instances, a tenant may need to request a deferral instead.

 

Tenants should take into consideration their savings, their level of expenses, and if they are eligible for Government funding or Victoria’s Rent Relief Grant.

 

As a guide, if a tenant is paying more than 30% of their gross income for rent, they are in rental hardship.

 

2. Contact their agent/landlord with a request for rent relief

Tenants should then contact their agent/landlord to request for a rent reduction or a deferral based on their current situation.

 

The written request should clearly outline a tenant’s changed circumstances.

 

Any supporting documents proving a tenant’s current situation will also aide a tenant’s agent/landlord to assess the tenant’s request.

 

These documents may include a bank statement, a Centrelink Income Statement, a Centrelink application or a letter from the tenant’s employer to define the tenant’s current work status.

 

3. Negotiate with their agent/landlord

Negotiation should be discussed in good faith. This includes trying to understand the other party’s situation, being flexible, not making any assumptions, considering all information sources and actively listening and engaging in negotiations.

 

Negotiations in this manner should soon reach an agreement which will work for both parties.

 

Tenants should make sure that the agreement for rent reduction or deferral is agreeable with their financial situation.

 

The agreement should be put in writing so both parties are clear. The written agreement should outline the names of the tenant and landlord, the property address, the rent prior and after the agreement, the time period of the agreement.

 

Note: Tenants are still legally required to pay rent as per normal until an agreement has been agreed upon.

 

4. Lodge their agreement with Consumer Affairs Victoria

Once a tenant has reached an agreement with their agent/landlord, they should lodge the agreement with Consumer Affairs Victoria here. Only one party needs to lodge the agreement – landlord, property manager, or tenant.

 

Consumer Affairs Victoria will determine if the tenant is applicable for Victoria’s Rent Relief Grant (paid to the landlord), or if a landlord is applicable for Victoria’s Land Tax Relief.

 

In cases where an agreement cannot be reached between a tenant and a landlord, Consumer Affairs Victoria will help reach an agreement. A complaint relating to COVID-19 agreements can be lodged here.

 

 

For Landlords:

When landlords are in a situation where their tenants have not paid rent or have advised them of financial changes due to COVID-19, they should:

 

1. Be clear on their financial situation

Before negotiating with their tenants, landlords should be clear of their financial situation and determine how much they can allow for rent reduction.

 

Landlords should also determine if they are eligible for any support from their insurance, their mortgage holder or lender, or the Victorian Government (i.e. land tax rebate and rent relief grant).

 

Landlords can also ask for supporting documents from their tenants to prove their financial situation.

 

These documents may include a bank statement, a Centrelink Income Statement, a Centrelink application or a letter from the tenant’s employer to define the tenant’s current work status.

 

The reduced rent amount must be reasonable.

 

As a guide, if a tenant is paying more than 30% of their gross income for rent, they are in rental hardship.

 

2. Negotiate with their tenants

Negotiation should be discussed in good faith. This includes trying to understand the other party’s situation, being flexible, not making any assumptions, considering all information sources and actively listening and engaging in negotiations.

 

If an agent is negotiating on your behalf, they should act in the same manner as above. It is crucial that the agent is transparent to both parties.

 

Negotiations in this manner should soon reach an agreement which will work for both parties.

 

Should a tenant find themselves in a debt situation after the reduced rent agreement due to deferred payments, they are not obliged to accept the agreement.

 

The agreement should be put in writing so both parties are clear. The written agreement should outline the details of the tenant and landlord, the property address, the rent prior and after the agreement, the time period of the agreement.

 

3. Lodge their agreement with Consumer Affairs Victoria

Once an agreement has been reached, they should lodge the agreement with Consumer Affairs Victoria here. Only one party needs to lodge the agreement – landlord, property manager, or tenant.

 

Consumer Affairs Victoria will determine if the tenant is applicable for Victoria’s Rent Relief Grant (paid to the landlord), or if a landlord is applicable for Victoria’s Land Tax Relief.

 

In cases where an agreement cannot be reached between a tenant and a landlord, Consumer Affairs Victoria will help reach an agreement. A complaint relating to COVID-19 agreements can be lodged here.

 

 

 

Useful Links

Victorian Premier Media Release (15th April 2020) – Supporting Tenants and Landlords Through Coronavirus

Victorian Housing – Rent Relief

Consumer Affairs Victoria – Coronavirus (COVID-19) and Your Rights

Consumer Affairs Victoria – Process for Negotiation a Reduced Rental Agreement for Tenants  

Consumer Affairs Victoria – Process for Negotiation a Reduced Rental Agreement for Landlords

 

 

 

Back | Next

Enquiry Form