Real Estate Alert: Tenants given the right to terminate under new COVID-19 Emergency Response Declaration
On 22 July 2020, the Residential Tenancies (COVID-19 Emergency Response) Declaration 2020 (No 2) became effective. Wasn’t there already a Declaration you may ask? Well yes, but that has been revoked and replaced (see “(No 2)”) … with little notice. Though in substance the new Declaration substantially reflects the old, the ACT Government has tactfully incorporated a new provision, which we expect landlords in the ACT will take issue with.
The new Residential Tenancies Declaration extends the moratorium period to 22 October 2020 (and rightly so) and reserves the right for the Minister to extend the moratorium period for a further three (3) months.
What is surprising is that the Declaration now allows a tenant living in an impacted household, pursuant to a fixed term residential tenancy agreement, to terminate the agreement upon giving the lessor written notice. That notice must:
- Be for a period of at least three (3) weeks; and
- Contain evidence that the tenant is a member of an impacted household.
Where a tenant terminates a residential tenancy agreement in accordance with the new Declaration, the lessor is not entitled to any compensation or break fee payable under the agreement or the Residential Tenancies Act 1997 (ACT). This is the case even where the residential tenancy agreement was signed by the tenant after the commencement of the moratorium period (22 April 2020).
So what should landlords and/or their managing agent do? Well, fortunately the Declaration does not limit the ‘evidence’ that must be provided by a tenant and it would be prudent for landlords and/or their managing agent to require more than one (1) of the following (also listed as examples in the new Declaration):
- A statutory declaration attesting to the status of the premises being an ‘impacted household’;
- Evidence of a household member’s eligibility for the JobKeeper or JobSeeper payment from the Commonwealth;
- Letter from an employer attesting to a change in a tenant’s employment status; or
- Evidence of a reduction in household income.
For further information, please contact the Real Estate Team at BAL Lawyers.