Breaking a Lease for a COVID-19 Reason (Vic)
On 24 April 2020 Victoria passed legislation temporarily amending the Residential Tenancies Act 1997 in response to the COVID-19 pandemic. The COVID-19 Omnibus (Emergency Measures) Act 2020 will be in force for six months. Among other things, it seeks to protect tenants and landlords who are unable to perform their obligations due to a COVID-19 reason. The act applies to parties to residential tenancy agreements, boarding houses, caravan parks and rooming houses.
What is a COVID-19 reason?
Under Section 537 of the act, a person is unable to comply with a term or provision of a residential tenancy agreement for a COVID-19 reasons if the person:
- is ill (whether or not the illness is COVID-19);
- is unable to comply because of their compliance with public health directions in relation to the pandemic;
- cannot comply without suffering severe hardship;
- cannot comply because of exceptional circumstances relating to the COVID-19 pandemic.
The definition of COVID-19 reason is quite broad. It differs from the approach taken by other states, which have put in place very specific criteria to assess whether a tenant has been financially impacted by the pandemic to the extent that they require relief.
A landlord or agent who is dealing with a tenant who is affected by a COVID-19 reason must not increase the tenant’s rent. Landlords and agents must allow payment of rent by Centrepay where they are eligible to use Centrepay. A tenant must not be taken to have breached their tenancy agreement where the breach is the result of a COVID-19 reason.
A tenant may apply to the tribunal for a reduction of rent payable under the lease for a specified period. The Tribunal may make an order reducing the rent payable under the lease and may also order that the tenant enter into a payment plan for payment of the rent or outstanding arrears.
Under Section 543, a landlord or tenant who is a party to a fixed term residential tenancy agreement may apply to the Tribunal for an order reducing the length of the tenancy and making any changes to the terms of the tenancy needed because of the reduction in its term.
An order must only be made under this provision if the Tribunal is satisfied that the party would suffer severe hardship if the term of the tenancy were not reduced.
A landlord or agent must not give a tenant a Notice to Vacate where the tenant has breached the tenancy agreement for a COVID-19 reason. A landlord or agent may still give a tenant a Notice to Vacate where the tenant has breached the lease agreement in a way that is not for a COVID-19 reason, such as using the property for illegal purposes.
Under the changes, tenants are permitted to vacate premises with shorter notice periods than are usually required under the Residential Tenancies Act in certain circumstances. This includes when a tenant:
- is excluded from the property under a family violence intervention order;
- is protected by a family violence intervention order and is seeking to protect their safety;
- is suffering severe hardship.
Owners and agents are prohibited from ‘blacklisting’ tenants on databases like TICA based on their failure to perform their obligations due to a COVID-19 reason.
Chief Dispute Resolution Officer
The act establishes the office of Chief Dispute Resolution Officer (CDRO). The CDRO administers the Residential Tenancies Dispute Resolution Scheme and may be empowered by regulations to:
- change, limit or prevent the exercise of rights by a tenant or a landlord under the Residential Tenancy Act or under Alease agreement;
- exempt specified persons from compliance with residential tenancy law;
- modify the operation of tenancy agreements;
- modify the operation of the Residential Tenancies Act or the VCAT Act in relation to a tenancy agreement.
If you require legal advice or representation in a residential tenancies matter or in any other legal matter, please contact Go To Court Lawyers.