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4 gaps in the COVID-19 support for renters

By Bianca Dabu
20 July 2021 | 1 minute read
4 gaps in the COVID-19 support for renters

The Tenants’ Union of NSW has called for “better and permanent hardship protections” for renters across the state, following the New South Wales government’s announcement of a comprehensive COVID-19 economic support package.

The state government last week announced the $5 billion COVID-19 support package covering renters, landlords, businesses and households.

For renters, in particular, a 60-day moratorium on evictions was put in place for impacted tenants, or those who have suffered loss of income of 25 per cent and have fallen into arrears due to the pandemic.

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Landlords were also encouraged to provide rent relief or negotiate to reduce rents through a commitment to provide a grant of up to $1,500 or land tax reductions to eligible landlords who decrease rent for impacted tenants.

But while these are welcome support from the government amid a difficult time, the Tenants’ Union has expressed concerns about potential gaps in the protections.

The union laid out four significant “loopholes” to the government’s latest COVID-19 support package:

1. No ban on ‘no grounds’ evictions

Unlike the eviction moratorium protections in place from March 2020 to March 2021, where the NSW government introduced provisions to ensure that impacted tenants couldn’t be evicted for “no grounds” unless the tribunal felt it was “fair and reasonable”, the current eviction moratorium leaves tenants vulnerable to being evicted for “no grounds”, according to the union’s policy and advocacy co-ordinator, Jemima Mowbray.

“As we feared, we saw landlords during the moratorium period who simply turned around and issued ‘no grounds’ notices instead when they couldn’t evict for ‘arrears’,” Ms Mowbray said.

The union also brought up the absence of the extension of notice periods for other types of evictions, which used to be “one of the original moratorium’s most useful elements, as it gave tenants a little more time to find a new place to live following eviction”.

2. No clear obligation to negotiate a reduced rent

While the introduction of relief payment for landlords who provide rent reductions was a “very welcome addition to the relief package”, Ms Mowbray said the lack of obligation may encourage some landlords to refuse their claim and thus not provide any sort of rent relief.

“We know from experience that if they think it’s going to be too much hassle to apply for the payment, some landlords won’t apply and just won’t reduce rent at all — especially if they don’t think they’ll face any financial hit for not doing so.

“We believe a landlord who doesn’t claim the $1,500 relief should lose the right to evict, or they should at least reduce the amount of arrears they can claim at eviction by that much… Otherwise, there’s nothing a tenant can do to compel the landlord to provide a reduction and claim back that money from the government.”

According to Ms Mowbray, a much more effective way of delivering the support would be to “provide [payment] directly to the tenant, or at least allow tenants to initiate the application process for the payment”.

3. No support for renters with significant arrears once protections end

The union’s policy and campaign officer, Riley Brooke, also flagged the lack of clarity on what will happen to renters who accrue significant rental arrears after the 60-day moratorium period.

According to her, even if a renting household pays 25 per cent of rent over the said period, they are still left with the remaining 75 per cent potentially accruing as a debt — that is, up to six weeks’ worth of unpaid rent.

“Even considering a potential waiver their landlord may offer, the accrued debt will likely still remain significant. Those who don’t get their work hours back, and many low-income renting households, will seriously struggle to manage this debt,” she said.

Ms Brooke warned that “without long-term planning and additional support beyond the coming two months, this moratorium simply delays future evictions, and the associated financial and emotional hardship they will bring”.

4. No stop on landlords and agents accessing renters’ homes

Without Public Health Orders addressing access issues, many renters continue to have to deal with agents and landlords who still book routine inspections or make appointments for viewings for prospective buyers or tenants — even amid a COVID-19 outbreak.

“The Public Health Orders don’t yet allow renters to refuse access, even though the non-essential nature of many of these requests seems to clearly go against the intent of the strong messaging being sent out from NSW Health and daily from the Premier and Chief Health Officer,” according to Ms Brooke.

Permanent protections

Ultimately, the union believes that the government needs to craft better and more permanent solutions in order to provide sufficient protections to tenants across the state and build a “crisis-ready” system.

“Each wave of COVID-19 and subsequent — necessary — restrictions and lockdowns has resulted in a wave of households all simultaneously experiencing unexpected financial hardship. The government has then scrambled to bring in some temporary protections, which tend to have been created under very high-pressure circumstances, and inevitably are flawed,” Ms Mowbray said.

“Wouldn’t it be better if our tenancy laws included well-thought-out, appropriately designed supports that could be immediately relied on by renters during emergency situations...?” She highlighted that in the midst of a crisis “may be the worst time to be trying to create an appropriate protection framework”.

According to Ms Brooke, long-term solutions would allow the government to address tenant concerns with compassion and support — even outside of a large-scale crisis situation.

“Hardship should — and could — be met with as much compassion and support when it is experienced by just one household, as when the compounding impact of many households experiencing hardship threatens the economy as a whole,” she said.

“If a home owner experiences unexpected financial hardship — loss of a job, death in the family, illness or injury, and more — and cannot pay their mortgage over a period of time, they are generally able to access their bank’s hardship framework and request a ‘hardship variation’... Why shouldn’t renters have access to a similar kind of hardship framework or support? Not just during a global pandemic, but available as a well-designed safety net whenever an unexpected crisis hits — whether that be for a household, a community, or the whole of NSW.”

Looking ahead, the union hopes to see further changes into tenancy laws in order to provide an adequate safety net to support renters through unexpected crises, whether on a small or a larger scale.

“We think it’s time to look at how a hardship framework for renters can be made a permanent feature of our renting system,” Ms Mowbray concluded.

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