While Australia has had its own share of COVID-19 cases, the pandemic appears to have been handled very well and most states and territories are already starting to relax the lockdown restrictions, and this is particularly the case for Western Australia. As of the 18th May, we will see many restaurants, bars and fitness centres re-open with limitations on the number of patrons that are allowed inside at any one time. We remain optimistic that this will not lead to further cases across Western Australia and we can all return to some degree of normality sooner rather than later.
This week we’re exploring the property restrictions that have been put in place in Western Australia and how this impacts both property investors and tenants. We’ve broken this down across key categories for the real estate industry in Western Australia.
Residential Rent Relief Grant Scheme
The Western Australian State Government has announced the rental assistance scheme for those tenants who have lost their jobs on or after 20th March 2020. This will enable those impacted to access up to $2,000 each if they are facing financial hardship. In total, $30 million has been allocated for this scheme.
Moratorium on Evictions
As directed by the National Cabinet, the Western Australian Government has also imposed the six-month moratorium on evictions. It is important to note that this is only available to those actually affected by COVID-19 so tenants can still be evicted if they cause damage to the property, pose a threat to the landlord or neighbours of the property, or if they fail to pay their rent when they haven’t been impacted by COVID-19.
Ban on Rental Increases
Rents are not allowed to be increased in Western Australia for the period of the moratorium either, which is designed to provide some certainty for tenants with regard to their regular budgeting.
Non-Urgent Repairs Not Enforced
Landlords are now able to avoid carrying out non-urgent repairs on their property if they’ve been impacted by COVID-19 themselves. This could mean that they have suffered a loss financially due to COVID-19, or that they can not access the property due to restrictions on movement during this period.
Break Lease Fees Avoided
Any tenants who break their fixed lease prior to the specified conclusion date will not be faced with fees for breaking the lease. They will however still be liable for any damage to the property as well as any rent arrears due. Both landlords and tenants are able to apply to the Magistrates Court or State Administrative Tribunal to have a lease terminated if they wish to move into the property (in the case of landlords) due to COVID-19 or if the tenant can no longer afford to pay the rent.
Decreases in Rent Amounts
Tenants can request that the rent be reduced to their landlord or property manager, which could be a deferral of rent, rent-free period or simply a reduction in the regular amount. If the tenant states that they can not pay and have genuinely been impacted by COVID-19, the landlord can request proof of this, which could be in the form of a letter from their employer or otherwise. For privacy reasons, landlords are not allowed to request a copy of their tenants bank statement or financials for proof of financial hardship.
It’s important that if you are a landlord with property in Western Australia that you check your landlord’s insurance terms and conditions to explore how a reduction in rent could impact your insurance policy.
If you own property in Western Australia that is currently rented out, or if you’re a tenant and aren’t quite clear about how the rules apply to your own situation, feel free to reach out to our team.
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