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Tenant advocates have been pushing to cancel all rental debts, but the Real Estate Institute of Victoria (REIV) believes this could send the wrong message and encourage tenants to stop paying their contracted rent in the expectation that the taxpayer will pick up the tab.
By law, a tenant’s willful non-payment of rent is grounds for landlords to apply to the Victorian Civil and Administrative Tribunal for an order to evict the tenant.
However, any suggestion that landlords will simply “kick tenants out for COVID-related rental debt” is both incorrect and inflammatory, according to the REIV.
In fact, the REIV pointed out that 57,000 rent reduction agreements have been registered with the Consumer Affairs Victoria at the beginning of November 2020.
REIV president Leah Calnan said: “The pandemic hasn’t been selective; it has hit everyone: tenants, landlords and property managers. It is irresponsible to suggest that all rental debt should be wiped as it may be another person’s only source of income.”
Further, the roadmap out of the rental moratorium remains unclear, the REIV said.
It said that a clear plan from the government must be announced well ahead of the planned end to the moratorium.
The Victorian government is proposing to introduce over 120 changes to the Residential Tenancies Act the day after the moratorium ends. The REIV believes that this could put substantial pressure on tenants, landlords and property managers to manage the cessation of the moratorium as well as the transition to a raft of new rules and procedures, all within a 24-hour period.
According to REIV CEO Gil King: “I am concerned that the government is taking a one-dimensional view of this and may simply wipe the slate clean on debts and rental disputes come the end of the moratorium.
“This would simply force many mum and dad investors from the market and cause mayhem at a time we should be working towards an economic recovery.”
The REIV has strongly recommended that the commencement of changes to the Residential Tenancies Act be delayed until 1 July 2021 to provide sufficient time for the investment and rental market to get back to a level of normality post-moratorium.
“It is vitally important that property managers and landlords are given sufficient advance notice of the detail behind the changes to the Residential Tenancies Act. The landlord investors are critical to keep the Victorian property market stable,” Ms Calnan concluded.
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