Covid-19 Residential Rent Laws Extended – What does it mean for you?
No doubt by now you would have heard that the West Australian Government has extended the Covid-19 state of emergency period for a further 6 months to expire on the 28th March 2021. This has a number of implications for Landlords and Tenants alike. The property industry is unsure why it was necessary for a blanket extension and are sure the government could have put measures in place to protect those impacted by Covid-19. In any event it is important to understand what it means for you.
The key areas of impact are around protecting the Tenant from eviction and rent increases, even if agreed by both Tenant and Landlord ahead of the extension. No rent increases over a 12 month period, at a time when rents are rising and there is a chronic shortage of rental properties, is simply kicking the problem down the road and making those properties that do come to market quite unaffordable for many.
The Tenant is not required to move out of the home at the end of the fixed term tenancy unless you have sold the property with vacant possession and even then you have to provide the 30 day notice period once the fixed term has ended and not during the fixed term. If you have moved back to Perth or are looking to move back into your investment property at the end of a fixed term, you need to apply to the court to terminate the tenancy.
During the emergency period, Landlords are not required to do ordinary repairs if they can’t afford to due to Covid-19 financial hardship or access is restricted due to Covid-19. Urgent repairs still need to be attended too.
Landlords can also apply to the court to terminate an agreement and evict a tenant in certain circumstances, including when a tenant is seriously damaging the premises or causing injury to the Landlord or neighbours.
The Residential Rent Relief Scheme will continue through the extended emergency period with tenants who have had a reduction of 75% or more in their after tax income.
Of course parties can determine a lease by mutual agreement and it is pleasing to note that most tenants are continuing to do the right thing.
Whilst the government may be acting with the best intentions, can you imagine what is looming come April 2021? Unless you have been working in residential property management or sales you would have probably been surprised by the population growth numbers announced by ABS last week, 1.51% equating to an extra 39,628 people. With FIFO workers and expats pouring into WA further exacerbating the housing shortage. Some will argue that when the hard border reopens the interstate FIFO workers will return home, however I can’t see those that have been living in places like Bali rushing back there and all major resources companies have openly stated a preference to employing residents of Western Australia. So our view is the situation will get worse before it starts to get better as a result of the housing stimulus bringing new product to market.
All the very best,