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A six-month moratorium on rental evictions, but still no support for agents

Prime Minister Scott Morrison has formally announced a six-month moratorium on evictions for commercial and residential tenants.

The announcement came late Sunday as cabinet continues to work on the release of a full rent relief package.

Mr Morrison said the issue of commercial and residential tenants in distress had been further discussed at today’s national cabinet meeting, but there was still work to be done.

“State and territories will be moving to put a moratorium on the evictions of persons as a result of financial distress if they are unable to meet their commitments,” Mr Morrison said.

“And so there would be a moratorium on evictions for the next six months under those rental arrangements.”

Mr Morrison said more would be revealed over the coming days as the government, businesses, landlords and banks worked through tenancy issues.

“My message to tenants, particularly commercial tenants, and commercial landlords, is a very straightforward one – we need you to sit down, talk to each other and work this out.

“We need landlords and tenants to sit down and come up with arrangements that enable them to get through this crisis so on the other side the landlord has a tenant which is a business that can pay rent, and the business is a business that can re-emerge on the other side of this and be able to go on and employ people on the other side of these arrangements.”

Mr Morrison noted he also wanted banks to play their part.

“We want people to sit down and work this out. We will be working on measures that encourage you to do just that and to support you to do just that, but also to ensure that if you aren’t going to engage in that sort of co-operative activity – between banks, between tenants, and between landlords – then the sort of support that you might otherwise expect to receive you will not receive.

“This is part of the hibernation approach…There’s no rule book for this, but the goals should be shared,” Mr Morrison stated.

REIWA President Damian Collins said it is important that all tenants understand that they must continue to pay rent where their businesses or jobs have not been significantly affected.

“We are all in these challenging times together. Just as landlords and the government will come together to help support tenants in trouble, it is vital that those who are still in a solid position continue to do their part and pay their rent,” Mr Collins said.

“This temporary moratorium on eviction for non-payment of rent, will be applied to both commercial and residential tenancies. However, those who have a job at normal pay, or a business still trading well and are not significantly affected, are still expected to pay rent.

But he also said that it cannot be left up to landlords to bankroll the non-payment of rent on their own.

“In addition to this short-term solution, we also strongly encourage the State and Federal Governments to consider rental assistance to help ensure more tenants can continue to afford their rent.

“Many landlords are mum and dad investors who themselves may be impacted from coronavirus and it’s vital that the government follow through on tonight’s announcement and provide rental assistance directly to landlords where a tenant is legitimately unable to pay.”

The Prime Minister has asked tenants, landlords and banks to come together to find a solution, however, there are many in the industry who are already stepping up.

“Most banks are already indicating they are offering customers the option to defer home loan repayments for six months, however that is still additional debt to the landlord. We need government rent assistance to be a vital part of the solution to this challenging situation.”

President of the REIA, Adrian Kelly said he is very supportive of the Government and its efforts but is disappointed with the simplistic approach of the Prime Minister’s message which ignores the tenancy arrangement and thus raises more questions than it answers.

“Real estate agents are the middle persons who facilitate the agreement between landlords and tenants and manage it as well as the property.

“There are some 70,000 property managers, principals, real estate agents and representatives across Australia.

“Tenants don’t negotiate with landlords.

“Banks have already indicated that they are offering customers the option to defer home loan repayments for up to six months.

“We need to address the support of agents so that what the Prime Minister wants, in terms of landlords and tenants – finding a solution to get through the crisis, can be achieved.

“Estate agents will work very hard to facilitate the role between landlord and tenant, and to do this they need income.”

“I note that National Cabinet is still to consider details. Hopefully, these will come so that the Prime Minister’s objectives can be met,” concluded Mr Kelly.

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