Residential Tenancy Amendment (COVID-19) Bill (No. 37) of 2020
Second reading speech
Ms ARMITAGE (Launceston) - Mr President, this bill is the product of a very unusual set of circumstances throughout the COVID-19 pandemic during 2020.
From the Government's second reading speech, I understand the bill has three main purposes - establishing the system for rent arrears and payment orders; providing for circumstances in which a subsequent emergency period can be declared; and performing inspections and general repairs. I will address each of these purposes in turn.
The rent arrears payment order provisions contained in this bill have the twofold effect of protecting landlords by ensuring that rent in arrears is formally repayable and protecting renters by prohibiting eviction during the period in which the order is in place, as long as the tenant is complying with it.
In assessing whether to issue a rent arrears payment order, the commissioner must be satisfied that rent arrears exist; that the tenant has experienced financial hardship by way of a reduction of hours, interruption to work and loss of employment; and, finally, that the commissioner considers the tenant's capacity to repay.
These are all fair and reasonable factors to take into account, particularly in the very lean rental market which is becoming increasingly common throughout the entire state. It makes sense to prioritise stability in the rental market by preventing eviction of tenants when a rent arrears payment order is in place to avoid flooding the demand side of the rental market with an unknown quantity of newly evicted and distressed renters.
Of course, I completely understand the concern and frustration of landlords and property managers during the time of COVID-19, and I know of the lengths to which many have gone to accommodate fairly the needs of renters in distress.
Many of us understand that landlords have experienced similar distress, with the added worries of being unable to inspect or repair the premises they rent out, which I will address further in a moment.
The creation of the rent arrears payment order system will generate some much-needed confidence, provide stability, set expectations and allocate risk fairly between landlord and tenant. The closer we get to more steady and typical circumstances, the quicker our property market and overall economy can start to recover.
I have a constituent who is under 35 years old, a part-time student who worked hard to own a rental property, but was owed several thousand dollars with the tenant leaving mid-lease and, I am told, is ineligible for any federal or state Government assistance. Unfortunately, some people play the system and in this case the previous renter came out unscathed financially and many thousands of dollars better off with the property owner using their landlord insurance to cover the unpaid rent.
Another constituent has had no rent since March. In this case, updating the period that tenants cannot be evicted is a nightmare for them. To use their words, these are 'government-supported squatters'.
The ability for a subsequent COVID‑19 emergency period to be declared is a further protection for our housing market and those who participate in it. Clauses 4 and 5 of the bill which set out the circumstances in which such a period can be declared, state that the purpose is to reasonably mitigate any significant widespread hardship that is caused or likely to be caused to a significant number of tenants by taking into account the presence of the state of the disease and the risk of its spread.
I wonder what interplay there will be between the Director of Health, understanding how significant the powers granted to the director are during medical emergency periods, and the minister in making a declaration of the sort. What kind of threshold would need to be met regarding the presence of COVID-19 and the risk of its spread?
I ask these questions because I am sure it will help landlords and tenants alike to get a sense of the likelihood of the quite stringent conditions that an emergency declaration has on renting, remembering that confidence and stability in the housing market are integral to its proper functioning and to the economy recovering. If we can get a further understanding of the circumstances under which a minister might make a declaration of this sort, that might be helpful.
Finally, provisions contained in the bill regarding performance of inspections and general repairs are vitally integral and I am pleased to see their inclusion. As I mentioned earlier, I can understand the distress that being unable to undertake inspections and non-urgent repairs in the previous months caused landlords. For many mum-and-dad landlords whose precious asset is a rental home, being able to properly take care of it and ensure that the tenant to whom it is entrusted is properly looked after, enabling section 32 of the Residential Tenancy Act to upgrade as usual, even during emergency periods, will do much to allay the worries landlords have experienced recently regarding the integrity of their assets.
It should go without saying that the protections for tenants in this section mean that the proper notice should be given to them before such entry to the property takes place.
Mr President, the bill provides fair and reasonable protections for landlords and tenants as far as the circumstances surrounding COVID‑19 and its effect on rental properties are concerned. A number of issues, both foreseen and unforeseen, have arisen for tenants and landlords since the emergency periods were declared earlier this year.
With enough worry caused by the virus itself, having a clear way to allocate risks and responsibilities between tenants and landlords, and provide protections in terms of rent payments in arrears and from tenant eviction will bring stability and confidence to the market which is going to be integral as we move forward.