We’ve teamed up with McInnes Wilson Lawyers to bring you professional advice to help navigate the legalities of paying for accommodation amid COVID-19. If you’ve been searching for rental reduction negotiation tips or have been seeking rental advice, keep reading because we’ve got the answers to your FAQs.
If you need to break lease due to financial hardship as a result of the Coronavirus, the best thing you can do is speak to your landlord and try to come to an agreement. If you’re unable to do that, then there’s other options available to you, such as going through the Residential Tenancies Authority’s free dispute resolution process. If that is unsuccessful, you can go further and take your claim to QCAT for determination.
Negotiating rental reductions
When negotiating rental reductions, you must first consider how much rent will you be able to pay, and how much income you have lost due to COVID-19. The second thing to keep in mind is that quite often the landlord will have their own financial obligations relating to the lease. With that being the case, there may not be much the landlord can do in relation to reducing rent or making other changes to the lease.
Furthermore, you need to make sure that you have sufficient evidence to back up your claim. The Queensland government has introduced guidelines for rental reductions. These guidelines require tenants to show that either they have had a greater than 25% reduction in their income or that the rent they’re required to pay exceeds 30% of their total income. This is calculated based on the pooled income of all tenants. In any event, the key is to be proactive and start speaking to your landlord as soon as possible, before you’ve fallen into arrears of rent. Finally, you should ensure that any agreement you reach is in writing in the required form.
Consider speaking with industry bodies who are set up for the sole purpose of assisting landlords and tenants in times like these. These include the Residential Tenancies Authority or Tenants Queensland. McInnes Wilson Lawyers also offer a free consultation service over the phone for tenants who are suffering hardship during this time.
The Queensland government has introduced a moratorium on evictions due to nonpayment of rent. This means that if you are suffering excessive hardship as a result of COVID-19, you cannot be evicted from your property until the end of the COVID-19 pandemic. However, it’s important to understand that this moratorium only applies where, as a tenant, you are suffering from excessive financial hardship.
Rights as a landlord
Whilst there is a moratorium in place for evictions due to nonpayment of rent, landlords still have the right to evict for other reasons, particularly where the tenant has breached the lease other than in relation to nonpayment of rent. For example, if they require tenants to leave if they are looking to sell the property or to move back into it themselves, landlords can do so. However, they will need to provide at least two months’ notice to the tenant.
For a lot of landlords, payment of their mortgage can be one of their biggest stresses. It’s important to understand that as a landlord, any rental reduction you pass on to a tenant is not automatically coming off your mortgage. As part of negotiations with your tenant, it’s important that you speak to your mortgagee so that you can understand what relief they are willing to provide to you and factor this into your negotiations with the tenant. And this is obviously something which should be done prior to agreeing to any reduction in rent.
Paying back reduced rent
The type of agreement that you made with your landlord will decide whether you need to pay back reduced rent. You may have agreed to waiver the rent, which basically means that you will not have to pay back the amount of rent that has been waived. Or you may have agreed to a reduction in rent, which means that you’ll pay a lower rent for a certain period of time. And the third most common agreement is a deferral of rent, which reduces the rent by a certain amount to be paid back at a later time. This is another issue which should be carefully considered when you’re looking to negotiate with your landlord.
Need further advice? McInnes Wilson Lawyers offers a free consultation service over the phone for tenants who are suffering hardship during this time. Click the button below to learn more and access the Student Guild’s legal service.