RENTERS in the ACT have been given three months to make amends on lapses in rent payments before facing eviction, but the REIACT says the extension of the moratorium has “signed the eviction order” for a number of tenancies.
ACT Attorney-General Gordon Ramsay amended the RTA Emergency Declaration ahead of a six month moratorium on evictions expiring next month. The amendment comes into effect on 23rd October and will give tenants until the end of January to pay any rental arrears accrued during the six month period.
This will only apply if tenants pay their rent on time after 23rd October. The ACT Civil Administrative Tribunal will then step in to weight up a repayment plan, instead of ordering an eviction immediately.
Industry body, the REIACT said that while it is in full support of a transitional period to enable tenants to repay arrears accrued during the emergency declaration period, “serious concern remains” for those tenants who do not have the ability to repay arrears and the requirement, and the amendments would “have a grave impact on both tenants and landlords currently experiencing financial difficulties due to COVID-19”.
“The Attorney General has quite simply signed the eviction order for these tenancies.” REIACT chief executive officer, Michelle Tynan said.
She said the transition process would require impacted tenants who cannot maintain payments to appear before ACAT on two occasions, “with eviction the only certainty under the amendments”.
“The government has failed to acknowledge 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 government expects the goodwill of landlords to continue to be a viable option.”
The ACT government had previously announced that landlords who agreed to a rent reduction of more than 25% for tenants would be eligible for tax rebates. The ACT was the only jurisdiction nationally to experience a decline in the affordability of rent in the June quarter, according to the REIA, while SQM Research data shows Canberra’s vacancy rate is at a very tight 1.1%.
In August, the REIACT submitted a proposal would provide rental assistance to the most vulnerable tenancies in arrears, whilst also ensuring landlords would have a mitigated loss of 25% of the total arrears owing. Any landlord accepting this rent assistance payment would agree that the tenant would stay in their home. Repayment by the tenant would then become an arrangement between the tenant and government over a longer period.
Funding would come from the already established commitment of $39 million set aside for the Land Tax Credit Scheme, which has only resulted in a maximum take up of approximately $2 million to date.
Ramsay’s amendment followed five organisations – ACT Council of Social Service, ACT Shelter, Canberra Community Law, Tenants’ Union ACT and Better Renting – co-signing a letter calling for the extension.
REIACT also implored government to take into consideration the possibility of more tenants and landlords facing further hardship when federal stimulus packages decrease from the end of September.
“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.”
REIACT also claimed its members have “seen a sharp increase in the number of investors now leaving the ACT market”.
“The uncertainty as to the end to the pandemic, coupled with increased outgoings, (including land tax and rate increases) and legislated rent increases now limited to a stringent CPI calculation, has compelled many investors to list their properties for sale.”
