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The Real Estate Institute of Victoria (REIV) has said it is seeing certain tenants rorting the system put in place to protect vulnerable individuals through COVID-19.
Acknowledging that “while the majority of tenants do the right thing”, it has flagged “growing evidence that some tenants are using the government’s moratorium to set their own rules and take undue advantage of the measures”.
It has reported that even when a dispute has been taken to VCAT, “there is often no outcome for the landlord, with the tenant effectively living rent-free until the end of the moratorium”.
“The longer the moratorium continues, the more tenants will take advantage of the biased system and the harder it will be for property owners to protect their asset,” a statement from the advocacy group read.
“Any extension of the moratorium must be accompanied by changes to the currently biased system.”
To illustrate its point, the REIV has flagged a number of case studies, highlighting one instance where a tenant that has not been impacted by COVID-19 “simply embarked on a ‘rent strike’” and now owes more than $22,000 in rent arrears.
VCAT issued a warrant in March and then withdrew it because of the moratorium. The case has been back to VCAT three times and keeps getting adjourned because the tenant makes promises that are not kept, with the matter still unresolved.
Another example concerns a commercial tenant who has not paid any rent for the small shop since March and is now $30,000 in arrears. The property owner is being chased for council rates and body corporate fees of more than $15,000.
According to the REIV, it does not dispute that “many tenants are doing it hard”.
“What concerns the REIV is the lack of due process, oversight and enforcement to ensure that no one takes undue advantage of the situation,” it said.
Weighing in on the issue, REIV CEO Gil King said many property owners who have worked hard to save and invest to provide for their families into the future are not being protected by the moratorium.
“The moratorium was necessary, but it should never have resulted in tenants being able to not pay rent just because they know they can’t be evicted,” he said.
“The longer this continues, the worse it will be.”
REIV president Leah Calnan has also expressed her concern, saying: “The moratorium was supposed to support those in financial hardship as a result of COVID-19, not create greater than necessary financial hardship for property owners.
“Clear bias in the system of dispute resolution and the negotiation of rent relief makes the system unfair towards people who are watching their life savings deteriorate as they bear the burden of the government’s support for tenants.”
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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