In a time of severe uncertainty, there is one thing that is certain – Australia’s younger generation is bearing the economic brunt of COVID-19.
Synonymous with casual work, lower financial-security, and transient housing arrangements, the younger generation make up 45% of the workforce in the 3 hardest hit industries for unemployment.
On top of that, a whopping 60% of those under 35 years old are privately renting.
Couple those statistics with a global pandemic, and you have a recipe for disaster.
Grappling to make ends meet, there is some good news – the younger generation might’ve lost their jobs, but they haven’t lost their rights.
Procedures and policies are being implemented rapidly by the Australian Government to assist those in need, particularly students.
In partnership with Griffith University, we sat with Brendan McGrath, Special Counsel, to unpack these policies and answer some of their students’ most pressing questions.
You can check out the highlights from the session on GUGC Instagram 'Support' Highlights Reel.
QUESTION 1: HOW CAN I BREAK A LEASE IF I CAN NO LONGER AFFORD TO LIVE THERE DUE TO COVID-19?
The singular best thing you can do if you’re looking to get out of your lease due to hardship from COVID-19 is to speak to your landlord. Try to come to an agreement with them as a starting point.
If you’re unable to reach an agreement, there are other options available to you.
These can include going through a dispute resolution process, which is offered by the Residential Tenancies Authority free of charge, or if that's not successful, you can go further and take your claim to QCAT for determination.
QUESTION 2: HOW SHOULD I NEGOTIATE RENT WITH MY LANDLORD?
When negotiating rent with your landlord, there are two main things that you should consider:
- What is your financial position? How much rent will you be able to pay, and how much income have you lost as a result of COVID-19?
- The second thing to keep in mind is that quite often the landlord will have its own financial obligations relating to the lease. With that being the case, there may only be so much the landlord can do in relation to reducing rent or making other changes to the lease.
When looking to start negotiations, you first thing you need to do is collate the evidence to back up your claim.
The Queensland Government has introduced guidelines which require landlords and tenants to negotiate a reduction of rent in certain circumstances. In short, these 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.
It’s important to keep in mind that this is calculated on the basis of the pooled income of all tenants.
The second thing is to be proactive and start speaking to your landlord sooner rather than later, and definitely before you've fallen into arrears of rent.
The final step, and arguably most important thing to do, is to ensure any agreement you reach is in writing and in the required form.
QUESTION 3: WHO CAN I CONTACT FOR FREE LEGAL ADVICE?
When it comes to getting the right advice, we strongly suggest that you consider speaking with industry bodies who are set up for the sole purpose of assisting landlords and tenants in times like these.
McInnes Wilson Lawyers also offers a free consultation service over the phone for any tenants who are suffering hardship at this time. If you're a student of Griffith University (Gold Coast or Nathan), you can also fill out our online questionnaire for free legal advice by clicking on the appropriate campus.
QUESTION 4: IF I STOP PAYING RENT, WILL ANYTHING HAPPEN TO ME?
The changes which have been brought in by the Queensland Government introduce a moratorium on evictions due to non-payment of rent.
What this means, in short, is 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, which is in line with the criteria mentioned earlier: -
- you've either had a 25% reduction in your income; or
- that the rent you're required to pay exceeds 30% of your income.
QUESTION 5: I AM BOTH A STUDENT AND A LANDLORD. WHAT RIGHTS DO I HAVE?
As a landlord, you still have a number of rights, notwithstanding the COVID-19 pandemic.
Whilst there was a moratorium in place for evictions due to non-payment of rent, landlords will still have rights to evict for other reasons, particularly where the tenant has breached the lease other than in relation to non-payment of rent.
Landlords will still have the right, for example, to require tenants to leave in the event that they are looking to sell the property or to move back into it themselves. In those circumstances, they will need to provide at least two months' notice to the tenant.
QUESTION 6: IF I AM A LANDLORD AND I AGREE TO LOWER MY RENT FOR MY TENANTS, HOW CAN I PAY MY MORTGAGE?
For a lot of landlords, payment of their mortgage can be one of their biggest stresses in a time like this. It's important to understand that, as a landlord, any rental reduction you pass on to a tenant isn't automatically coming off your mortgage.
This means it is vital to speak to your mortgagee when engaging in any negotiations of rent with your tenant. Have a talk to them and understand what relief they are willing to provide to you, which you can in turn factor into your negotiations with the tenant.
QUESTION 7: IF I PAY LESS RENT NOW, WILL I HAVE TO PAY THAT BACK ONCE THE PANDEMIC HAS PASSED?
One of the questions we're often asked by tenants is, "If I have to pay less rent now, am I going to have to pay it back once this whole pandemic is over?" And the answer to that is, it all depends on the agreement you've reached with your landlord.
One of the things which the Queensland Government has made clear is that they want landlords and tenants to discuss options which are available and come to their own agreement.
Rental reductions can be made in many different forms, including:
- a waiver of the rent, which basically means that you will not have to pay back the amount of the rent which is waived;
- a reduction in rent, which means that you'll pay a lower rent for a certain period of time; and
- a deferral of rent. Put simply, what this means is that where an agreement is reached to reduce the rent by a certain amount, the landlord and the tenant can agree that some or all of that reduction is not waived but is deferred to be paid back at a later time.
These are all considerations to make when negotiating rent with your landlord, or with your tenant if you so happen to be a landlord.